250514.mbx

250514.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 Wednesday, May 14, 2025, Vol. 26, No. 96 Headlines C Z E C H R E P U B L I C AI SIRONA: Moody's Affirms B2 CFR, Rates New EUR575MM Term Loan B2 F R A N C E COLISEE GROUP: S&P Cuts ICR to 'SD' on Deferred Interest Payment RAMSAY GENERALE: Moody's Affirms 'B1' CFR, Alters Outlook to Neg. I R E L A N D DRYDEN 66 2018: Moody's Ups Rating on EUR23.5MM Cl. E Notes to Ba2 NEUBERGER BERMAN 1: Moody's Ups Rating on EUR16.9MM E Notes to Ba2 PENTA CLO 5: Moody's Affirms B3 Rating on EUR10.15M Class F-R Notes I T A L Y QUARZO SRL 2025: Moody's Assigns Ba1 Rating to EUR25.2MM D Notes SESTANTE FINANCE 2004: Moody's Ups EUR15.6MM C1 Notes Rating to Ba3 L U X E M B O U R G CULLINAN HOLDCO: S&P Lowers ICR to 'B-', Outlook Negative N E T H E R L A N D S ASM INTERNATIONAL: S&P Alters Outlook to Pos., Affirms 'BB+' ICR CENTRIENT HOLDING: S&P Upgrades ICR to 'B' on Proposed Refinancing TRIVIUM PACKAGING: S&P Assigns 'B' Rating to New EUR500MM Term Loan VEON LTD: S&P Affirms 'BB-' Ratings After Issuer Substitution S P A I N [] Moody's Upgrades Ratings on 6 Notes in 2 Spanish RMBS Deals S W E D E N VOLVO CAR: Moody's Affirms 'Ba1' CFR & Alters Outlook to Negative U N I T E D K I N G D O M ASPERS (MILTON KEYNES): FTI Named as Joint Administrators ASPERS FINANCE: FTI Consulting Named as Joint Administrators ASPERS GROUP: FTI Consulting Named as Joint Administrators ASPERS UK: FTI Consulting Named as Joint Administrators SEKURA MOBILE: RG Insolvency Named as Joint Administrators SWANGLEN METAL: Rushtons Insolvency Named as Administrator WAKELET LIMITED: Leonard Curtis Named as Joint Administrators YOUR STAFF: Exigen Group Named as Administrators - - - - - =========================== C Z E C H R E P U B L I C =========================== AI SIRONA: Moody's Affirms B2 CFR, Rates New EUR575MM Term Loan B2 ------------------------------------------------------------------ Moody's Ratings has affirmed the B2 corporate family rating and the B2-PD probability of default rating of AI Sirona (Luxembourg) Acquisition S.a.r.l. (Zentiva or the company). Concurrently, Moody's have assigned a B2 rating to the proposed EUR575 million senior secured first-lien term loan B5 and affirmed the B2 ratings of the EUR145 million senior secured first-lien revolving credit facility (RCF) and of the existing EUR1,925 million senior secured first-lien term loan B. The outlook remains stable. The proceeds from the proposed EUR575 million term loan B5, along with EUR64 million of cash on balance sheet, will fund a EUR625 million dividend distribution to shareholders and transaction-related fees. RATINGS RATIONALE The affirmation of the ratings reflects Moody's expectations that over the next 12-18 months, Zentiva's credit metrics will return to levels commensurate with a B2 rating, following the significant re-leveraging from the proposed debt-funded dividend distribution. It also considers Zentiva's track record of good organic revenue growth since its carve-out in 2018, and improving efficiencies and coverage of drugs losing exclusivity, which has enabled the company to deleverage significantly to date. This transaction will nevertheless leave Zentiva weakly positioned at B2, with an estimated 2024 Moody's adjusted debt/EBITDA (leverage) of about 7x pro forma for the transaction. Over the next 12-18 months, Moody's forecasts organic revenue growth in the mid- to high-single-digits in percentage terms, driven by new product launches, continued organic growth of existing drug portfolio, and the contribution of recent acquisitions, including that of Apontis in late 2024. Moody's forecasts that Moody's-adjusted leverage will decline to 6x or below in the next 12-18 months, and that interest coverage, defined as Moody's-adjusted EBITA to interest expense, will remain adequate at above 2x in 2025-26. The company's Moody's-adjusted free cash flow (FCF) generation is expected to remain solid at around EUR90 million per year. Zentiva's B2 rating continues to reflect its solid market position in the countries where it operates; its diverse product portfolio and good coverage of small molecules that lose exclusivity until the end of the decade; and its solid profit margin, driven by its cost competitive business model. The B2 rating also takes into account Zentiva's overall moderate scale, compared with that of rated global peers, and limited geographical presence outside of Europe; the commoditised nature of its generics portfolio, although its over-the-counter (OTC) and specialty product exposure has increased; and its highly leveraged capital structure and appetite for acquisitions, which could delay leverage reduction. RATING OUTLOOK The stable outlook reflects Moody's expectations that Zentiva will continue to have a strong operating performance over the next 12-18 months, which will drive credit metrics improvements and notably drive leverage down to 6x or below. The outlook also considers that any potential M&A will be funded with internal cash and support deleveraging. LIQUIDITY Zentiva has a good liquidity supported by a cash balance of EUR251 million as of March 31, 2025 (EUR187 million pro forma for the transaction), a EUR145 million RCF which is undrawn, and Moody's-adjusted FCF generation of around EUR90 million annually over the next 12-18 months. The next debt maturity is the company's senior secured RCF due March 2028. The RCF is subject to a senior secured net leverage covenant of 10x, tested quarterly if more than 40% of the facility is drawn. Moody's expects the company to continue to have significant capacity under this covenant. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure could arise if Zentiva continues to deliver a solid operating performance and maintains conservative and predictable financial policies, including visibility on M&A strategy and potential shareholder distributions. Numerically, an upgrade would require Moody's-adjusted gross debt/EBITDA reducing below 5x, Moody's-adjusted cash flow from operations (CFO) to debt improving towards the mid-teens in percentage terms, and a Moody's-adjusted EBITA to interest expense moving towards 3x. Conversely, downward pressure could develop if Zentiva fails to demonstrate a steady improvement in credit metrics and deleveraging over the next 12-18 months, as per the current plan, if its operating performance deteriorates or if it undertakes additional leveraging transactions, such as debt-funded acquisitions or shareholder distributions. Quantitatively, a downgrade could occur if its Moody's-adjusted gross debt/EBITDA does not decline below 6x by 2026, or if its Moody's-adjusted EBITA to interest expense reduces below 2x or its Moody's-adjusted FCF materially deteriorates. Downward pressure could also develop if liquidity deteriorates. STRUCTURAL CONSIDERATIONS The B2-PD PDR is in line with the CFR and reflects a 50% family recovery rate. Zentiva's capital structure mainly comprises senior secured first-lien term loans and a senior secured first-lien RCF, all rated B2, which share a security package consisting of shares from operating subsidiaries accounting for at least 80% of the group's EBITDA. COVENANTS Notable terms of the TLB documentation include the below. The following are proposed terms, and the final terms may be materially different. Guarantor coverage will be at least 80% of consolidated EBITDA (determined in accordance with the agreement) and will include wholly-owned subsidiaries representing 5% or more of cons. EBITDA. Companies in Argentina, Chile, China, Colombia, India, Mexico, Pakistan, Russia, Taiwan, Turkey, Venezuela, UAE and Ukraine are not required to provide guarantees or security. The security package includes key shares, structural intercompany receivables and material bank accounts. Lenders participating in new term loan B5 will also consent to certain amendments to the TLB documentation terms. Prior to the date on which the requisite lender consent threshold for such amendments is achieved (the Amendment Consent Date), the debt "freebie" basket capacity is set at the greater of EUR182.5 million and 50% of EBITDA. From the Amendment Consent Date, such debt "freebie" basket capacity shall be set at the greater of EUR210 million and 50% of EBITDA. Unlimited pari passu debt is permitted subject to a cons. senior secured net leverage ratio of 5.00x (5.75x from the Amendment Consent Date), plus, in each case, other customary available basket capacity under the limitation on indebtedness covenant. Any restricted payment is permitted up to a cons. total net leverage ratio (TNLR) of 4.75x (or 5.75x if funded from Available Amount); and junior debt repayments are permitted if the TNLR is 5.25x (or 6.00x if funded from Available Amount). Asset sale proceeds, which are not otherwise applied in accordance with asset sales covenant, are only required to be offered to repay debt in full where the TNLR is 5.75x or greater (and, otherwise, only 50% of such asset sale proceeds need to be offered). Adjustments to consolidated EBITDA include certain forward looking adjustments for cost savings and synergies, where, to the extent capped, which are subject to an aggregate cap of 25% of EBITDA and must be expected to be realised within 24 months. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Pharmaceuticals published in November 2021. COMPANY PROFILE Zentiva is a leading European generics company headquartered in the Czech Republic. It holds leading market positions in the Czech Republic, Slovakia and Romania, and strong positions in Germany, France, Italy and other Central and Eastern Europe (CEE) markets, with an increasing share of consumer healthcare and specialty products. Zentiva benefits from a vertically integrated model through the value chain. It generated net sales of EUR1.6 billion and company-adjusted EBITDA of EUR407 million in 2024. Zentiva was acquired by Advent International in October 2018. =========== F R A N C E =========== COLISEE GROUP: S&P Cuts ICR to 'SD' on Deferred Interest Payment ---------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on France-based nursing homes operator Colisee Group to 'SD' (selective default) from 'CCC-', and its issue-level rating on its EUR1.2 billion term loan B (TLB) to 'D' (default) from 'CCC-'. The company opted to miss and defer its interest payment by a number of weeks subject to the lenders' approval on its TLB. S&P said, "The rating action reflects Colisee's nonpayment of interest due April 11, 2025, within our 30-calendar-day period (as defined by our criteria). We do not think the company will make the payment within the time remaining in the grace period mentioned in the documentation (30 business days) given its ongoing liquidity issues. The deferred interest payment resulted from a consensual arrangement with the term loan lenders to support the company's liquidity position as it continues to execute its turnaround plan. In 2024, Colisee reported company-adjusted EBITDAR of EUR333 million, down from EUR394 million the previous year, undermined by exacerbated pressures on its cost structure." S&P said, "We view the missed interest payment as a default, since creditors will not receive what they were initially promised, regardless of the subsequent agreement to defer the payment. We estimate Colisee's S&P Global Ratings-adjusted debt to EBITDA was about 11x in 2024, with the EUR217 million RCF maturing in May 2027 and the EUR1.2 billion TLB in November 2027. The issuer credit rating on Colisee Group is 'SD' because we understand the company remains current on its other obligations. "We expect to reassess our ratings on the company in the following days outlining the next steps in our analysis and the ratings once we have more information on Colisee's plans to address the default and its liquidity position." RAMSAY GENERALE: Moody's Affirms 'B1' CFR, Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Ratings has affirmed the B1 corporate family rating and B1-PD probability of default rating of Ramsay Generale de Sante S.A.'s (Ramsay Sante or the company). Moody's have affirmed the B1 instrument rating on the EUR1.45 billion senior secured term loan B5, the EUR100 million senior secured capital spending and acquisition facility, and the EUR100 million senior secured revolving credit facility (RCF). The outlook has been changed to negative from stable. RATINGS RATIONALE The rating action is prompted by a sustained decline in profitability, reflecting the difficult operating environment with inflationary and regulatory pressures, particularly in Government of France (France, Aa3 stable). This has resulted in a slower-than-expected improvement in credit metrics relative to the rating agency's earlier projections. Since the full-year ended June 2022, Moody's-adjusted EBITDA margin decreased from 15.1% to 11.8% for the half-year ended December 2024. The EBITDA margin declined is due to a significantly lower level of subsidies and to inflationary pressures, including rising salaries and procurement costs, which were not fully offset by revenue price increases across all jurisdictions, despite ongoing cost control and efficiency measures. Additionally, in 2024, the EBITDA margin was affected by the prudential coefficient withholding on French tariffs and reduced subsidies from the French government. In December 2024, Moody's downgraded France's rating to Aa3 reflecting Moody's views that the country's public finances will be substantially weakened over the coming years. Moody's expects real GDP growth to slow to 0.5% in 2025, down from 1.1% in 2024. Overall, Moody's adjusted credit metrics are weaker than previously projected. For the full year ending June 2025, Moody's now forecasts an adjusted EBITA to interest expense ratio of 1.0x, down from the earlier forecast of 1.4x. Moody's recognizes that Ramsay Santé's higher depreciation expenses compared to peers like Schoen Klinik SE (B1 stable) impact its adjusted EBITA to interest expense ratio. This stems from its leasing strategy, leading to substantial right of use depreciation, influenced notably by high-cost property locations. For the full year ending June 2025, Moody's projects adjusted gross debt to EBITDA at 6.4x and Moody's adjusted free cash flow to debt to remain low at 0.8% for the same period. At the same time, Moody's understands that Ramsay Santé is reinforcing cost base restructuring efforts to improve profitability. Going forward, despite execution risks, Moody's anticipates that these measures and lower inflation will increase adjusted EBITDA margin to over 12% over the next 12 to 18 months. Moody's forecasts France's inflation rate will be at 1.4% in 2025 compared with 2.3% in 2024. Ramsay Santé experienced positive market dynamics for the half-year ended December 2024. Patient admissions increased in its French hospitals driven by post-Covid-19 demand: MSO (medicine, surgery and obstetrics) admissions rose by 2.8%, chemotherapy by 6.0%, and dialysis by 0.5% compared to last year. In the Nordics, stable overall admissions were supported by increased inpatient volumes in Government of Sweden (Sweden, Aaa stable), particularly due to the new maternity unit at St Goran Hospital (the group's flagship hospital in Sweden), and steady demand in elderly care and specialist clinics. Positively, Ramsay Santé has recently been awarded the renewal of its contract to provide care at St Göran Hospital in Stockholm, starting in 2026 for a minimum of eight years, through its subsidiary Capio, the current operator at St Göran. More generally, Ramsay Santé's B1 ratings reflect (1) its large scale, strong reputation and leading position in the private hospital market, namely in France and the Nordic countries, in particular Sweden; (2) the historical supportive regulatory framework of the French healthcare system; (3) and favorable secular trends for private hospitals, driven by an ageing population with a higher life expectancy resulting in an increased demand for medical care. LIQUIDITY Ramsay Santé has an adequate liquidity. As of December 31, 2024, it had cash balance of EUR158 million, a committed revolving credit facility of EUR100 million (of which EUR30 million was drawn) and a capital spending and acquisition facility of EUR100 million fully undrawn. Moody's forecasts positive free cash flow generation of about EUR30 million for the financial year ending in June 2025. Ramsay Santé has high capital expenditure which constrain its free cash flow generation. These investments in medical equipment, real estate and renovation, digitalization, and reinforcement of cybersecurity are essential. They should support organic revenue growth and reinforce Ramsay Santé's position as a leading clinic operator in France and the Nordic countries. In February 2025, Ramsay Santé has repriced its EUR1,025 million term loan B4 and its EUR425 million term loan B3, both merged in a new single term loan B5, maturing in August 2031. RATING OUTLOOK The negative outlook stems from declining profitability in recent quarters and weak credit metrics for a B1 rating. A stable outlook would require sustained revenue growth and profitability improvements to restore stronger credit metrics, such as interest coverage, on a sustainable basis. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward rating pressure could arise if the adjusted gross debt to EBITDA falls below 5.5x; the adjusted EBITA to interest expense exceeds 2x; and the adjusted free cash flow to debt improves above 5% - all on a sustainable basis. In addition, an upgrade would assume the absence of detrimental regulatory shifts or negative changes in financial policy. Downward rating pressure could develop if the company fails to deleverage below adjusted gross debt to EBITDA of 6.5x; if the adjusted EBITA to interest expense does not move towards 1.5x; or adjusted free cash flow turns negative - all on a sustained basis. Negative rating pressure could also occur in the event of large debt-financed acquisitions, distributions to shareholders or if liquidity materially deteriorates. COMPANY PROFILE Headquartered in France, Ramsay Sante is one of the leading private hospitals in Europe, with strong market positions in France and the Nordics. Ramsay Santé offers a broad range of medical, surgical and mental healthcare services. Ramsay Santé is majority owned by Ramsay Health Care Limited (52.8%), a subsidiary of Ramsay Healthcare Limited, an Australian multinational healthcare provider and hospital network. Other shareholders comprise Predica (39.8%), a subsidiary of Crédit Agricole S.A. (Aa3 stable) specialising in insurance, and Groupe du Docteur Attia (6.6%). Ramsay Santé is listed on the Euronext Paris. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. ============= I R E L A N D ============= DRYDEN 66 2018: Moody's Ups Rating on EUR23.5MM Cl. E Notes to Ba2 ------------------------------------------------------------------ Moody's Ratings has upgraded the ratings on the following notes issued by Dryden 66 Euro CLO 2018 Designated Activity Company: EUR12,400,000 Class B-1 Senior Secured Floating Rate Notes due 2032, Upgraded to Aaa (sf); previously on Dec 30, 2021 Affirmed Aa2 (sf) EUR31,600,000 Class B-2-R Senior Secured Floating Rate Notes due 2032, Upgraded to Aaa (sf); previously on Dec 30, 2021 Definitive Rating Assigned Aa2 (sf) EUR27,000,000 Class C Mezzanine Secured Deferrable Floating Rate Notes due 2032, Upgraded to Aa3 (sf); previously on Dec 30, 2021 Affirmed A2 (sf) EUR25,000,000 Class D-R Mezzanine Secured Deferrable Floating Rate Notes due 2032, Upgraded to Baa1 (sf); previously on Dec 30, 2021 Definitive Rating Assigned Baa3 (sf) EUR23,500,000 Class E Mezzanine Secured Deferrable Floating Rate Notes due 2032, Upgraded to Ba2 (sf); previously on Dec 30, 2021 Affirmed Ba3 (sf) Moody's have also affirmed the ratings on the following notes: EUR238,000,000 (Current outstanding balance EUR181,708,545) Class A-R Senior Secured Floating Rate Notes due 2032, Affirmed Aaa (sf); previously on Dec 30, 2021 Definitive Rating Assigned Aaa (sf) EUR10,500,000 Class F Mezzanine Secured Deferrable Floating Rate Notes due 2032, Affirmed B2 (sf); previously on Dec 30, 2021 Affirmed B2 (sf) Dryden 66 Euro CLO 2018 Designated Activity Company, issued in December 2018 and refinanced in December 2021 is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by PGIM Limited. The transaction's reinvestment period ended in July 2023. RATINGS RATIONALE The rating upgrades on the Classes B-1, B-2-R, C, D-R and E notes are primarily a result of the deleveraging of the senior notes following amortisation of the underlying portfolio since the payment date in April 2024. The affirmations on the ratings on the Classes A-R and F notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. The Class A-R notes have paid down by approximately EUR50.6 million (21.3%) in the last 12 months and EUR56.3 million (23.7%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated March 2025 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 149.1%, 133.3%, 121.4%, 112.0% and 108.3% compared to March 2024 [2] levels of 140.5%, 128.2%, 118.6%, 110.8% and 107.6% respectively. Moody's notes that the April 2025 principal payments are not reflected in the reported OC ratios. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR338.1 million Defaulted Securities: None Diversity Score: 46 Weighted Average Rating Factor (WARF): 2936 Weighted Average Life (WAL): 3.4 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.9% Weighted Average Coupon (WAC): 3.9% Weighted Average Recovery Rate (WARR): 41.9% Par haircut in OC tests and interest diversion test: None The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank and swap providers, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in October 2024. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. NEUBERGER BERMAN 1: Moody's Ups Rating on EUR16.9MM E Notes to Ba2 ------------------------------------------------------------------ Moody's Ratings has upgraded the ratings on the following notes issued by Neuberger Berman Loan Advisers Euro CLO 1 DAC: EUR21,300,000 Class B-1 Senior Secured Floating Rate Notes due 2034, Upgraded to Aaa (sf); previously on Mar 29, 2021 Assigned Aa2 (sf) EUR9,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2034, Upgraded to Aaa (sf); previously on Mar 29, 2021 Assigned Aa2 (sf) EUR17,900,000 Class C Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to Aa3 (sf); previously on Mar 29, 2021 Assigned A2 (sf) EUR18,900,000 Class D Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to Baa2 (sf); previously on Mar 29, 2021 Assigned Baa3 (sf) EUR16,900,000 Class E Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to Ba2 (sf); previously on Mar 29, 2021 Assigned Ba3 (sf) Moody's have also affirmed the ratings on the following notes: EUR186,000,000 Class A Senior Secured Floating Rate Notes due 2034, Affirmed Aaa (sf); previously on Mar 29, 2021 Assigned Aaa (sf) EUR8,300,000 Class F Senior Secured Deferrable Floating Rate Notes due 2034, Affirmed B3 (sf); previously on Mar 29, 2021 Assigned B3 (sf) Neuberger Berman Loan Advisers Euro CLO 1 DAC, issued in March 2021, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Neuberger Berman Europe Limited. The transaction's reinvestment period ended in April 2025. RATINGS RATIONALE The rating upgrades on the Classes B-1, B-2, C, D and E notes are primarily a result of the transaction having reached the end of the reinvestment period in April 2025. The affirmations on the ratings on the Class A and F notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. In light of reinvestment restrictions during the amortisation period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analysed the deal assuming a higher likelihood that the collateral pool characteristics would maintain an adequate buffer relative to certain covenant requirements. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR298.7m Defaulted Securities: EUR2.25m Diversity Score: 60 Weighted Average Rating Factor (WARF): 2879 Weighted Average Life (WAL): 4.62 years Weighted Average Spread (WAS): 3.75% Weighted Average Coupon (WAC): 3.62% Weighted Average Recovery Rate (WARR): 44.18% The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as the account bank, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in October 2024. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. -- Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analysed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. PENTA CLO 5: Moody's Affirms B3 Rating on EUR10.15M Class F-R Notes ------------------------------------------------------------------- Moody's Ratings has upgraded the ratings on the following notes issued by Penta CLO 5 Designated Activity Company: EUR33,400,000 Class B-1-R Senior Secured Floating Rate Notes due 2035, Upgraded to Aa1 (sf); previously on Feb 25, 2021 Definitive Rating Assigned Aa2 (sf) EUR10,000,000 Class B-2-R Senior Secured Fixed Rate Notes due 2035, Upgraded to Aa1 (sf); previously on Feb 25, 2021 Definitive Rating Assigned Aa2 (sf) EUR22,300,000 Class C-R Senior Secured Deferrable Floating Rate Notes due 2035, Upgraded to A1 (sf); previously on Feb 25, 2021 Definitive Rating Assigned A2 (sf) EUR26,250,000 Class D-R Senior Secured Deferrable Floating Rate Notes due 2035, Upgraded to Baa2 (sf); previously on Feb 25, 2021 Definitive Rating Assigned Baa3 (sf) Moody's have also affirmed the ratings on the following notes: EUR245,450,000 Class A-R Senior Secured Floating Rate Notes due 2035, Affirmed Aaa (sf); previously on Feb 25, 2021 Definitive Rating Assigned Aaa (sf) EUR24,000,000 Class E-R Senior Secured Deferrable Floating Rate Notes due 2035, Affirmed Ba3 (sf); previously on Feb 25, 2021 Definitive Rating Assigned Ba3 (sf) EUR10,150,000 Class F-R Senior Secured Deferrable Floating Rate Notes due 2035, Affirmed B3 (sf); previously on Feb 25, 2021 Definitive Rating Assigned B3 (sf) Penta CLO 5 Designated Activity Company, issued in December 2018 and refinanced in February 2021 is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Partners Group (UK) Management Ltd. The transaction's reinvestment period ended in April 2025. RATINGS RATIONALE The rating upgrades on the Class B-1-R, B-2-R, C-R and D-R notes are primarily a result of the transaction having reached the end of the reinvestment period in April 2025. The affirmations on the ratings on the Class A-R, E-R and F-R notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. In light of reinvestment restrictions during the amortisation period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analysed the deal assuming a higher likelihood that the collateral pool characteristics would maintain an adequate buffer relative to certain covenant requirements. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR393.6m Defaulted Securities: none Diversity Score: 55 Weighted Average Rating Factor (WARF): 2869 Weighted Average Life (WAL): 4.19 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.67% Weighted Average Coupon (WAC): 4.40% Weighted Average Recovery Rate (WARR): 44.04% The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in October 2024. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. ========= I T A L Y ========= QUARZO SRL 2025: Moody's Assigns Ba1 Rating to EUR25.2MM D Notes ---------------------------------------------------------------- Moody's Ratings has assigned the following definitive ratings to Notes issued by Quarzo S.r.l., Series 2025: EUR774M Series A Asset Backed Floating Rate Notes due March 2042, Definitive Rating Assigned Aa3 (sf) EUR45M Series B Asset Backed Floating Rate Notes due March 2042, Definitive Rating Assigned Baa1 (sf) EUR31.5M Series C Asset Backed Floating Rate Notes due March 2042, Definitive Rating Assigned Baa3 (sf) EUR25.2M Series D Asset Backed Floating Rate Notes due March 2042, Definitive Rating Assigned Ba1 (sf) Moody's have not assigned ratings to the subordinated EUR24.3M Series J Asset Backed Fixed Rate Notes due March 2042 and EUR0.1M Series R Asset Backed Variable Return Note due March 2042. RATINGS RATIONALE The Notes are backed by a 6-month revolving pool of unsecured consumer loans extended to obligors located in Italy by Compass Banca S.p.A. ("Compass", unrated), a company fully owned by Mediobanca S.p.A. (Baa1/P-2 Bank Deposits; Baa2(cr)/P-2(cr)). Compass is acting as originator and servicer of the loans. This represents the fifteenth issuance out of the Quarzo program. The portfolio consists of approximately EUR899.99 million of consumer loans as of March 12, 2025 pool cut-off date. The reserve fund will be funded to 1.3% of the Series A, B, C and D Notes' balance at closing and the total credit enhancement for the Series A Notes will be 15.26%. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. The transaction benefits from various credit strengths such as: (i) a granular portfolio with good geographic diversification, (ii) the fact that all loans are fully amortising without any balloon payments, and (iii) extensive historical performance data with regards to defaults and recoveries provided by the originator. In addition, the transaction contains structural features such as: (i) an amortising liquidity reserve sized at 1.3% of Series A, B, C and D Notes' balance, (ii) principal to pay interest mechanism for the Notes, (iii) a daily sweep of collections to the issuer account that partially mitigates the risk of commingling, and (iv) a significant excess spread at closing. Moody's notes that the transaction features some credit weaknesses such as: (i) the fact that the pool is revolving for 6 months, which could lead to an asset quality drift, although this is mitigated to some extent by the portfolio concentration limits, (ii) pro-rata payments on Series A - J Notes from the first payment date, (iii) the weighted-average asset yield can decrease to 10.5% during the revolving period, which has been considered in the cash flow modelling of the transaction, (iv) 63% of the pool are personal loans, which historically exhibited higher default rates than other consumer loan products, (v) an unrated servicer, and (vi) an interest rate mismatch, as all the loans are fixed-rate, whereas the Notes are floating-rate (except for Series J and R Notes). Various mitigants have been included in the transaction structure such as a back-up servicer facilitator, which is obliged to appoint a back-up servicer if certain triggers are breached, as well as performance triggers to stop the revolving period if breached. The interest rate mismatch is mitigated by a fixed-to-floating balance guaranteed interest rate swap hedging coupon payments for Series A to D Notes. Pro-rata payment scheme will cease after the sequential redemption events are triggered. Moody's determined the portfolio lifetime expected defaults of 5.20%, expected recoveries of 15% and portfolio credit enhancement ("PCE") of 16% related to borrower receivables. The expected defaults and recoveries capture Moody's expectations of performance considering the current economic outlook, while the PCE captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. Expected defaults and PCE are parameters used by us to calibrate Moody's lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model to rate Consumer ABS. Portfolio expected defaults of 5.20% are lower than the EMEA Consumer Loan ABS average and are based on Moody's assessments of the lifetime expectation for the pool taking into account: (i) historical performance of the loan book of the originator, split by new and used vehicles, personal loans and other special purpose loans, (ii) benchmarking with other similar transactions, and (iii) other qualitative considerations, such as the 6-month revolving period and the related portfolio concentration limits. Portfolio expected recoveries of 15% are in line with the EMEA Consumer Loan ABS average and are based on Moody's assessments of the lifetime expectation for the pool taking into account: (i) historical performance of the loan book of the originator, split by new and used vehicles, personal loans and other special purpose loans, (ii) the unsecured nature of the consumer loans in Italy, and (iii) benchmarking with other similar transactions. PCE of 16% is lower than the EMEA Consumer Loan ABS average and is based on Moody's assessments of the pool which is mainly driven by: (i) evaluation of the underlying portfolio, complemented by the historical performance information as provided by the originator, and (ii) the relative ranking to originator peers in the EMEA Consumer loan market. The PCE level of 16% results in an implied coefficient of variation ("CoV") of 54.4%. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in July 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors that could lead to an upgrade of the ratings include: (i) improvement of Italy´s local currency country ceiling (LCC), or (ii) significantly better pool performance than expected. Factors that could lead to a downgrade of the ratings include: (i) an increase in Italian's sovereign risk, (ii) increased counterparty risk leading to potential operational risk of (a) servicing or cash management interruptions and (b) the risk of increased swap linkage due to a downgrade of a swap counterparty ratings, or (iii) performance of the pool being worse than Moody's expectations. SESTANTE FINANCE 2004: Moody's Ups EUR15.6MM C1 Notes Rating to Ba3 ------------------------------------------------------------------- Moody's Ratings has upgraded the ratings of the Class C Notes in Sestante Finance S.r.l., the Classes B and C1 Notes in Sestante Finance S.r.l. – Series 2004, the Class B Notes in Sestante Finance S.r.l. – Series 2005, and the Class A2 Notes in Sestante Finance S.r.l. – Series 2006. This rating action reflects the increased levels of credit enhancement for the affected notes as well as better than expected collateral performance for Classes B and C1 Notes in Sestante Finance S.r.l. – Series 2004. Moody's affirmed the ratings of the notes that had sufficient credit enhancement to maintain their current ratings. Issuer: Sestante Finance S.r.l. EUR351.22M Class A1 Notes, Affirmed Aa3 (sf); previously on Jul 12, 2023 Affirmed Aa3 (sf) EUR17.17M Class B Notes, Affirmed Aa3 (sf); previously on Jul 12, 2023 Affirmed Aa3 (sf) EUR13.36M Class C Notes, Upgraded to Aa3 (sf); previously on Jul 12, 2023 Upgraded to A2 (sf) Issuer: Sestante Finance S.r.l. - Series 2004 EUR575.3M Class A Notes, Affirmed Aa3 (sf); previously on Oct 26, 2023 Affirmed Aa3 (sf) EUR34.4M Class B Notes, Upgraded to A1 (sf); previously on Oct 26, 2023 Upgraded to Baa2 (sf) EUR15.6M Class C1 Notes, Upgraded to Ba3 (sf); previously on Oct 26, 2023 Affirmed Caa2 (sf) Issuer: Sestante Finance S.r.l. - Series 2005 EUR791.9M Class A Notes, Affirmed Aa3 (sf); previously on Jul 12, 2023 Affirmed Aa3 (sf) EUR47.35M Class B Notes, Upgraded to Ba1 (sf); previously on Jul 12, 2023 Upgraded to B3 (sf) EUR21.5M Class C1 Notes, Affirmed Ca (sf); previously on Apr 27, 2012 Downgraded to Ca (sf) EUR30.15M Class C2 Notes, Affirmed Ca (sf); previously on Dec 18, 2009 Downgraded to Ca (sf) Issuer: Sestante Finance S.r.l. - Series 2006 EUR228.17M Class A2 Notes, Upgraded to Baa1 (sf); previously on Jul 26, 2016 Affirmed Baa3 (sf) EUR34.1M Class B Notes, Affirmed Ca (sf); previously on Apr 27, 2012 Downgraded to Ca (sf) EUR21.7M Class C2 Notes, Affirmed C (sf); previously on Dec 18, 2009 Downgraded to C (sf) EUR15.5M Class C1 Notes, Affirmed C (sf); previously on Apr 27, 2012 Downgraded to C (sf) Maximum achievable rating is Aa3 (sf) for structured finance transactions in Italy, driven by the corresponding local currency country ceiling of the country. RATINGS RATIONALE The rating action is prompted by the increased levels of credit enhancement for the affected notes. For Classes B and C1 Notes in Sestante Finance S.r.l. – Series 2004, it also reflects better than expected collateral performance. Increase in Available Credit Enhancement Sequential amortization and reserve funds build up for Sestante Finance S.r.l and Sestante Finance S.r.l. – Series 2004 led to the increase in the credit enhancement available to certain notes in these transactions. For the Class C Notes of Sestante Finance S.r.l. upgraded in action, the credit enhancement increased to 32.3% from 19.9% since the last rating action in July 2023. For the Classes B and C1 Notes of Sestante Finance S.r.l. – Series 2004 upgraded in action, the credit enhancement increased to 39.1% from 25.4% and to 9.5% from 2.8%, respectively since the last rating action in October 2023. There are no interest deferral trigger that allows interest on the Class B and C1 notes to be subordinated. Interest payments on Class B and C1 Notes have been always paid timely. Sequential amortization and reduction in unpaid PDL for Sestante Finance S.r.l. – Series 2005 and Sestante Finance S.r.l. – Series 2006 led to the increase in the credit enhancement available to certain notes in these transactions. For the Class B Notes of Sestante Finance S.r.l. – Series 2005 upgraded in action, the credit enhancement increased to 11.0% from 2.5% since the last rating action in July 2023. The interest deferral trigger that allows interest on the Class B notes to be subordinated is not expected to be breached soon, given defaults are materializing at a slower pace than in the past, and interest payments on the Class B notes have always been paid timely. For the Class A2 Notes of Sestante Finance S.r.l. – Series 2006 upgraded in action, the credit enhancement increased to 15.0% from 8.7% since July 2023. Revision of Key Collateral Assumptions: As part of the rating action, Moody's reassessed Moody's lifetime loss expectation for the portfolios reflecting the collateral performance to date. Sestante Finance S.r.l.: The performance of Sestante Finance S.r.l. remained quite stable over the past year. 90 days plus arrears were almost flat in absolute terms and currently stand at 3.7% of current pool balance. At the same time cumulative defaults are broadly stable and currently stand at 10.6% of original pool balance up from 10.4% a year earlier. Moody's maintained the expected loss assumption at 6.0% as a percentage of current pool balance due to the stable performance. The revised expected loss assumption corresponds to 7.9% as a percentage of original pool balance from 7.8%. Moody's reassessed loan-by-loan information to estimate the loss Moody's expects the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 16.4%. Sestante Finance S.r.l. – Series 2004: The performance of Sestante Finance S.r.l. – Series 2004 improved over the past year. 90 days plus arrears currently stand at 3.0% of current pool balance, down from 4.2% a year earlier. At the same time cumulative defaults are broadly stable and currently stand at 12.7% of original pool balance up from 12.5% a year earlier. Moody's decreased the expected loss assumption to 7.6% as a percentage of current pool balance due to the improving performance down from 8.0%. The revised expected loss assumption corresponds to 9.5% as a percentage of original pool balance in line with the previous assumption. Moody's reassessed loan-by-loan information to estimate the loss Moody's expects the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 20.7%. Sestante Finance S.r.l. – Series 2005: The performance of Sestante Finance S.r.l. – Series 2005 remained quite stable over the past year. 90 days plus arrears decreased in absolute terms and currently stand at 4.7% of current pool balance. At the same time cumulative defaults are slightly increasing and currently stand at 14.7% of original pool balance up from 14.4% a year earlier. Moody's maintained the expected loss assumption at 8.0% as a percentage of current pool balance due to the stable performance. The revised expected loss assumption corresponds to 11.0% as a percentage of original pool balance from 10.95%. Moody's reassessed loan-by-loan information to estimate the loss Moody's expect the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 20.7%. Sestante Finance S.r.l. – Series 2006: The performance of Sestante Finance S.r.l. – Series 2006 remained quite stable over the past year. 90 days plus arrears decreased in absolute terms and currently stand at 4.7% of current pool balance. At the same time cumulative defaults are slightly increasing and currently stand at 20.4% of original pool balance up from 19.8% a year earlier. Moody's maintained the expected loss assumption at 9.4% as a percentage of current pool balance due to the stable performance. The revised expected loss assumption corresponds to 15.5% as a percentage of original pool balance from 15.3%. Moody's reassessed loan-by-loan information to estimate the loss Moody's expect the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 23.5%. The principal methodology used in these ratings was "Residential Mortgage-Backed Securitizations" published in October 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement and (3) improvements in the credit quality of the transaction counterparties and (4) a decrease in sovereign risk. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement, and (4) deterioration in the credit quality of the transaction counterparties. =================== L U X E M B O U R G =================== CULLINAN HOLDCO: S&P Lowers ICR to 'B-', Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its ratings on Luxembourg-based Cullinan Holdco SC Sp to 'B-' from 'B'. The negative outlook indicates that we could lower the rating by more than one notch if the group does not extend its debt maturity profile before the debt is due in 12 months or less. The contract structure of Cullinan, owner of wood pellet producer Graanul, will likely weaken after 2026, since its largest customer, representing about 40% of Cullinan's total annual wood pellet production (2.8 million tons), has not yet extended its contract. Furthermore, the new contracts for difference (CfD) subsidy in the U.K. could mean reduced demand for wood pellets in the country and lower volumes sold for Cullinan. The downgrade follows the risk of volume loss from 2027. S&P said, "We forecast Cullinan's EBITDA at EUR105 million-EUR110 million for both 2025 and 2026, since the company has contracted sales of 80%-85% of its average annual wood pellet production. This is broadly in line with the 2024 levels. We see a risk that EBITDA could be affected by a new U.K. subsidiary scheme that will be introduced in 2027; however the conditions of that scheme have not yet been determined. The vast majority of contracted volumes are only until the end of 2026, since they are tied to the maturity of the U.K. subsidy schemes for incineration of biomass. Although the subsidy with CfD support for biomass was extended to 2031, the overall monetary support will likely lead to less electricity production from biomass from 2027-2031. We think biomass will still be needed in the U.K.'s energy mix, but likely to be used more for peak load than for base load. In 2024, biomass represented about 8% of the U.K.'s energy mix. Therefore, although operating performance is supported by a good contract structure in 2025 and 2026, we see a clear risk that it will be affected from 2027, depending on whether contracts are renewed or replaced and ultimately on sales in the spot market. Cullinan's largest customer is in the U.K. and represents about 40% of its volumes. The contractual structure, with a high concentration risk in a few customers, weighs heavily on our business risk assessment." S&P said, "The downgrade also reflects our assumption of a weaker cash flow profile and interest coverage ratios after a potential refinancing. Cullinan's capital structure consists of two bonds, both maturing in the second half of 2026. We therefore expect the company will seek to refinance those bonds soon. In view of higher interest rates, we assume a potential refinancing would increase cash interest costs to well above the EUR40 million paid in 2024. It's difficult to precisely forecast the impact of refinancing but we expect this to dilute the group's cash flow profile and lead to lower interest coverage ratios. We assume EBITDA to interest coverage lower than 2x on average, and FFO to debt lower than 6%, which are more in line with a 'B-' rating in our view. The company has very limited capital expenditure (capex), less than EUR10 million annually, and pays no dividends, so after a successful refinancing we would expect cash flow to remain positive, albeit less so than in 2024. We also acknowledge the cash position of more than EUR100 million. "The negative outlook reflects continued refinancing risk. The concentrated debt maturity profile implies a strain on liquidity. Both of Cullinan's bonds, totaling EUR630 million, mature in October 2026. We think this concentration of maturities increases refinancing risk. Our negative outlook therefore reflects that a lack of refinancing activity over the coming months could result in a downgrade of more than one notch. The company has sufficient liquidity only in the near term. It can cover its limited capex and obligations for the coming 12 months with internal funds. We don't expect Cullinan will pay any dividends. However, the EUR630 million of debt due in October 2026 would quickly pressure liquidity, and it is not clear that the company has full access to capital markets, so we revised our liquidity assessment to weak from less than adequate. That said, we note that the RCF of EUR100 million that matures in April 2026 is undrawn." The negative outlook reflects the elevated refinance risk for Cullinan because its short and concentrated debt maturity profile. S&P said, "We note that, in October 2025, the senior secured notes will be due within 12 months. We could lower the ratings by multiple notches, if the company does not refinance in a timely manner, or the refinancing was conducted in a way that it constitutes a distressed exchange according to our criteria. "We could revise the outlook to stable if Cullinan refinances its EUR630 million of bonds and the RCF, and the resulting changes in the long-term capital structure are in line with our expectations for the 'B-' rating. We would also assess the contracted volumes beyond 2026." ===================== N E T H E R L A N D S ===================== ASM INTERNATIONAL: S&P Alters Outlook to Pos., Affirms 'BB+' ICR ---------------------------------------------------------------- S&P Global Ratings revised its rating outlook on ASM International N.V. (ASMI), to positive from stable and affirmed its 'BB+' rating. The positive outlook indicates that S&P may raise the rating by one notch within the next 12 to 24 months, provided the company maintains its dominant position in key segments while further expanding its scale and diversification, resulting in EBITDA margins staying at about 30% and annual FOCF of EUR800 million annually on average. Dutch supplier of deposition equipment for semiconductor manufacturers, ASMI, is well positioned to capitalize on growth opportunities stemming from its market leadership in deposition equipment for advanced technology nodes, particularly as demand rises due to companies' investments in AI-related semiconductor capacity. ASMI has continuously increased its scale and end-market diversification over the past decade, while improving EBITDA margins, resulting in annual free cash flow (FOCF) increasing beyond EUR500 million in 2024, which S&P believes could approach EUR1 billion in the coming years. Furthermore, S&P anticipates that ASMI will follow a conservative financial policy, with a robust net cash position, and sustain exceptional liquidity by maintaining a cash balance of at least EUR600 million. Since 2016, ASMI has expanded organically by a double-digit percentage, resulting in larger scale and improving diversification. During 2021-2024 ASMI's revenue grew by an average of 19.2% annually, outperforming major competitors such as Applied Materials (5.6%) and Lam Research (0.6%). This resulted from ASMI's leading market position and increasing adoption of atomic layer deposition (ALD), a semiconductor fabrication process, in which ASMI is the global leader in supplying equipment, with a market share exceeding 55%. Furthermore, the company has expanded into adjacent deposition technologies, such as silicon epitaxy, where it is expected to achieve a 30% global market share in 2025, up from 16% in 2022. This has expanded ASMI's addressable market into analog semiconductors, thereby opening up new end markets such as electrical vehicles, resulting in greater diversification than when it was focused on ALD only. S&P said, "In our view, ASMI is well positioned to capitalize on AI-related growth trends. We anticipate that ASMI will benefit from increased investments in AI-related semiconductor capacity, supported by its expanding advanced-node technological portfolio. This portfolio includes ALD technologies for high-k (high dielectric constant) metal gate solutions for high-bandwidth (HBM) offerings for memory semiconductors and gate-all-around (GAA) solutions, which we expect will be important for the processing of AI-related semiconductors. We expect the transition to GAA technology nodes, which offer high capacity and low energy consumption for next-generation high-performance semiconductors, to expand ASMI's addressable market further." The ALD addressable market is projected to increase to $4.2 billion-$5.0 billion in 2027 from $2.6 billion in 2022. The more advanced node solutions in silicon carbide epitaxy (SiC Epi) will also benefit from the GAA transition and the silicon epitaxy market is expected to increase to $2.3 billion-$2.9 billion in 2027 from $2.0 billion 2022. ASMI has demonstrated resilient EBITDA margins, which combined with a growing topline have led to steadily increasing FOCF, possibly approaching EUR1 billion over the forecast period to 2027. Despite the downturn in the overall wafer fab equipment (WFE) market since 2020, ASMI has maintained EBITDA margins of 28%-30%. S&P said, "We anticipate that the benefits of scale and cost-reduction programs will be offset by the need for ongoing investments in research and development (R&D) to stay competitive, resulting in a stable S&P Global Ratings-adjusted EBITDA margin of about 30%. Alongside a stable profitability profile, we expect strong demand, disciplined working capital management, and a well-invested manufacturing base to enhance the group's cash flow. Consequently, we project FOCF to exceed EUR600 million in 2025 and potentially reach EUR800 million by 2026, compared with EUR117 million in 2020. However, we believe ASMI may experience fluctuations in FOCF during certain periods, due to industry volatility and countercyclical investment needs." S&P said, "We forecast ASMI will continue to display a highly conservative balance sheet through the cycle. ASMI has no financial debt and has maintained a cash position of over EUR600 million since 2023, which we expect will rise to more than EUR1 billion as the group's cash flow generation improves. ASMI continues to pay dividends, complemented by occasional special distributions. Notably, ASMI has initiated a EUR150 million share buyback program in April 2025, following a EUR150 million program executed in July 2024. However, we expect free cash flow to significantly exceed shareholder returns, providing ample headroom for small acquisitions and R&D investments during downturns." End-market diversification is increasingly mitigating ASMI's niche product focus and concentrated customer base. ASMI is a relatively small player in the $27 billion semiconductor deposition market. However, ASMI has continuously diversified and expanded the addressable market for its deposition technologies to include cloud, data centers, and electric vehicles, alongside its traditional presence in communications and computing. However, the entry of new competitors and the emergence of substitute deposition technologies could hinder ASMI's growth in the long term. Additionally, there is a degree of concentration in ASMI's customer base, in 2024 the top five customers accounted for approximately 51% of its revenue. Consequently, the potential loss of larger individual customers represents a material risk. Nevertheless, S&P believes this concentration is largely attributable to the structure of the semiconductor market and it acknowledges ASMI's track record of maintaining and increasing its market share. S&P said, "An uncertain macroeconomic outlook, potential tariffs, and changing trade policies could affect our forecast. Although there are currently no new tariffs on ASMI's exports to the U.S., this may change in the future. Although ASMI generates about 20% of its total revenue from the U.S., we believe the risk that its revenue in the U.S. would be affected by higher import tariffs is mitigated by ASMI's ability to produce critical products in the U.S. if needed. This includes through the construction of a new facility in Scottsdale, Arizona, which is expected to be completed in the second half of 2026. The company is also enhancing its global supply chain flexibility by expanding manufacturing capacity in Singapore and South Korea. However, we view the indirect risk of targeted tariffs on key end markets or a general economic slowdown as a greater threat to ASMI's revenue growth trajectory. Furthermore, ASMI is already affected by U.S. export control measures announced in 2022, which restrict the export of advanced computing semiconductor chips and certain manufacturing items to China. ASMI has estimated these measures reduced its sales in China by 15%-25%. But we understand that remaining sales in China relate to more mature technology nodes that are unlikely to be affected by further restrictions. "The positive outlook indicates that we may raise the rating by one notch within the next 12 to 24 months, provided the company maintains its dominant position in key segments, while further expanding its scale and diversification, resulting in an EBITDA margin of about 30% and FOCF increasing to EUR800 million annually on average. In addition, we expect ASMI to maintain a conservative financial policy and a strong net cash position. "We could revise the outlook to stable if the company's growth slows or its profitability weakens, leading to an inability to increase FOCF to EUR800 million annually. In our view, this could occur due to a loss of market share stemming from competitive pressure, technological shifts, or intensified trade barriers. "We could raise the rating if ASMI continues to diversify its revenue base and achieves double-digit growth while maintaining an EBITDA margin of approximately 30%. In our view, this should support FOCF of about EUR800 million annually. Additionally, leverage would need to stay below 1.5x." CENTRIENT HOLDING: S&P Upgrades ICR to 'B' on Proposed Refinancing ------------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on Netherlands-based pharmaceutical company Centrient Holding B.V. to 'B' from 'B-' and assigned the proposed senior secured notes due 2030 an issue credit rating of 'B' and a recovery rating of '3' (rounded estimate: 50%). The stable outlook signifies that S&P forecasts a resilient operating performance for Centrient over the next 12 months, supported by its strong position in active pharmaceutical ingredients (APIs) and beta-lactam antibiotics in Western Europe. The proposed refinancing takes advantage of the overall improvement in credit market conditions, as well as Centrient's stronger operating performance during 2024, to opportunistically lower its cost of debt while further extending maturities. S&P Global Ratings estimates that Centrient's average cost of debt is likely to fall by about 50 basis points (bps) after the transaction closes, enabling it to save about EUR3 million a year in cash interest payments. The transaction also demonstrates that Centrient is continuing to proactively manage its debt maturities and should lower refinancing risks. Last year's successful amend-and-extend transaction extended debt that was then approaching maturity, but also increased Centrient's cost of debt. The company now seeks to cut interest costs by issuing EUR595 million in new five-year senior secured notes and a new EUR85 million super senior revolving credit facility (RCF) maturing in 4.5 years. Proceeds from the new debt, combined with EUR3 million of cash on balance sheet, would be used to repay the existing EUR515 million term loan B due 2027 and EUR83 million second-lien term loan due 2028 in full. S&P forecasts that adjusted debt to EBITDA after Centrient's proposed refinancing would be unchanged at 5.8x, making the transaction leverage neutral. S&P said, "The company achieved a sharp reduction in leverage during 2024; we estimate that adjusted debt to EBITDA fell to about 5.8x from 12.0x in 2023. This was mainly driven by lower exceptional costs, although the improving operating performance contributed. In 2023, drug quality concerns in the group's Astral operations prompted a product recall and cost Centrient about EUR30 million in customer claims and about EUR10 million in consultancy costs. Astral was declared insolvent and liquidators are still looking for a buyer. Astral is fully separated from Centrient, both operationally and legally. In our view, Centrient is protected from potential cross-default risks related to its financing agreements and, because there are no overlapping clients, reputational risk is also contained. Our base case assumes that adjusted leverage will continue to decline toward 5.5x in 2025 and 4.5x-5.0x by year-end 2026, as exceptional costs related to Astral normalize and performance further improves." After improving markedly during 2024, FOCF should remain healthy at EUR20 million-EUR40 million a year over 2025-2026. FOCF reached an estimated EUR21.1 million in 2024--after being negative by EUR6.9 million in 2023--supported by an increase in adjusted EBITDA and better working capital management. Centrient's shift toward contractually based business has facilitated procurement planning, enabling it to optimize intermediate stocks. It also maintained lower inventory levels because of decreasing input costs. S&P said, "The company's liquidity also benefited from increased use of factoring in 2024, although we exclude the impact of this from our cash-flow analysis. During 2025 and 2026, we anticipate that the company will significantly increase investment in expansion. It aims to expand manufacturing capacity to accommodate the growing demand for its core products. Despite these costs, we forecast that FOCF will remain positive at EUR20 million-EUR40 million a year--investments are likely to be absorbed by higher adjusted EBITDA, supported by disciplined working capital management." S&P said, "Our revised base case indicates that revenue growth of about 5% in 2025 and 2% in 2026 will mainly be supported by a rebound in statins and other APIs (in particular penicillin G), as well as a further expansion of the finished dosage forms (FDFs) business. Volumes of Atorvastatin are expected to rebound as pressures from Asian competitors ease and the statin industry continues to grow. The aging population, improved access to health care, growing penetration of unhealthy lifestyles, and increasing outsourcing of API production are all contributing to the expansion of the statins merchant market. We expect sales of FDFs to ramp up during 2025 and 2026, supported by increasing capacity at contract manufacturing organizations (CMOs), larger contracts with existing clients, and new clients. Other APIs should rebound in 2025 and stabilize in 2026 as the company recovers from the effect of a raw material shortage in 2024 that depressed sales of penicillin G. Supplies have now been fully secured. "Given that utilization rates in the company's antibiotics manufacturing sites are above 90%, we anticipate only marginal growth in this segment. Centrient's limited manufacturing capacity will temporarily prevent it from taking advantage of growing demand for antibiotics and a supply demand imbalance in the global industry. That said, GSK PLC will be closing antibiotic plants in the U.K. and Singapore in 2025 and has signed a new five-year contract with Centrient, which should enable Centrient to achieve marginal volume growth in semisynthetic penicillins (SSPs). We also predict that sales will rebound following delays in government tenders last year in México. Average selling prices for SSPs are predicted to remain flat as declining price points and the dilutive effect of the GSK contract and the expansion of the FDF business unit, which exhibits lower than the group average profitability, are offset by mix improvements elsewhere. For example, as Centrient continues to shift toward the U.S. and other highly regulated markets, we expect the product mix to show above-average growth in higher-priced grades, mainly extra dry and compacted, and to see improvements in the customer mix." Cost pressures have forced some competitors in semisynthetic cephalosporins (SSCs) out of business and Centrient has recently signed contracts to fill these gaps outside China. SSC volumes are also likely to benefit from increasing demand for first-generation SSCs outside China, fueled by increasing awareness of antimicrobial resistance. That said, average selling price for SSCs are forecast to slightly decline due to lower sales of higher-priced, but lower-margin, second-generation SSCs in China, for which Centrient has not implemented backward integration. Profitability will gradually improve, underpinned by manufacturing efficiency, positive net pricing effects, and normalizing exceptional costs. S&P said, "This supports our base-case forecast that adjusted EBITDA will be about EUR120 million in 2025 and EUR140 million in 2026. We also predict that the adjusted EBITDA margin will improve to 19.0%-19.5% in 2025 and 21.0%-21.5% in 2026 (from an estimated, nonaudited figure for 2024 of 18.9%). Revenue growth, improved gross margins, and lower exceptional costs will more than offset higher selling, general, and administrative expenses (SG&A) and increased investment in research and development (R&D) mainly arising from the innovation hub Centrient commissioned in 2024 to help build in-house innovation capabilities and its new products pipeline. In forecasting gross margin, we assume that input costs (notably glucose, energy and electricity) will decline by more than selling prices and that the company's two ongoing efficiency programs will improve manufacturing efficiency." These comprise a yield improvement project at key manufacturing sites (that is, Yushu, Delft, and Toansa) and a molecule management program that looks for savings across the entire value chain. Centrient's ongoing stock-keeping unit (SKU) optimization process is expected to further support efficiency. Nonrecurring costs are expected to reduce to EUR10 million in 2025 and EUR5 million in 2026. Freed from the operational problems that the company had experienced in Asia, Centrient's revenue and EBITDA saw a strong recovery in 2024. Revenue increased by 6%, fueled by higher volumes, improved pricing, and a better product mix. Although the core SSP and SSC units contributed, growing by 4%, annual revenue at the FDF unit jumped by a remarkable 32% due to increased production at CMOs and an increased share of wallet from existing customers. Conversely, revenue from statins declined by 6%, which we attribute to lower volumes and rising competitive pressures from Asian rivals offering lower prices. The product mix benefited from a shift toward regulated markets and U.S. sales in SSP, as well as a more-favorable customer mix for statins. Notably, increased SSC sales outside of China helped gross margins to expand by about 400 bps, because these enjoy higher margins. Margins also benefited from reduced glucose and energy costs, coupled with stable or rising prices for SSP and SSC. S&P said, "In our view, this demonstrates Centrient's pricing power in its core division, which we consider is supported by high switching costs for pharmaceutical companies. Changing suppliers in this sector is associated with regulatory challenges and quality risks, and APIs have a relatively low average cost, given the overall cost structure of pharmaceutical companies. The group's strategy has been to transition toward a contract-based business model that promotes stability. That said, SG&A expenses and R&D costs have grown faster than sales, as Centrient reinvested savings from gross margins into enhancing its in-house innovation capabilities and developing the new product pipeline. This was more than offset by the decrease in exceptional costs, which fell to EUR17 million in 2024 from EUR50 million in 2023, as the company recovered from the impact of a product recall at Astral and flooding at a site in India. As a result, our estimated adjusted EBITDA margin was 18.9%, well above the 9.6% in 2023. As a result, adjusted EBITDA was EUR122 million in 2024, compared with EUR53.7 million in the previous year." Centrient aims to further diversify its operations while enhancing capacity in its core business to capitalize on favorable market trends. In our opinion, APIs, antibiotics, and statins will remain key to its strategy over the medium to long term. The company is well-positioned in Western Europe, a region with high barriers to entry, and can capitalize on the growing global demand for antibiotics and statins. To meet this demand, we expect Centrient to prioritize short-term investments in expanding manufacturing capacity at its SSP and SSC sites. S&P anticipates stronger growth in less-regulated regions, driven by population growth and increasing access to health care. At the same time, Western players benefit from trends like premiumization and nearshoring in highly regulated regions, as pharmaceutical companies seek to reduce supply risks and shift to higher-grade products that offer better utilization rates. Pharmaceutical companies continue to outsource operations and focus on their core competencies and managing costs, which supports companies like Centrient. On the supply side, relatively limited capacity for antibiotics API in Western Europe helps maintain price stability, even as commodity prices decline. FDFs now account for approximately 10% of Centrient's sales. Its diversification into this area is part of its strategy to diversify away from its primary antibiotics API division while harnessing the efficiencies of a vertically integrated business model that enhances scale, efficiency, and control over the supply chain. Geographically, the company remains focused on the U.S. and other highly regulated markets, which are generally more stable, less price-sensitive, and more profitable. However, by targeting less-regulated markets, Centrient can benefit from faster growth rates fueled by demographic trends and increasing access to health care. The company is developing two new business units to further diversify its portfolio and expand growth opportunities: -- Since 2023, Centrient has been investing in its product development division and has established an innovation hub and a dedicated development team to build a pipeline of new products. Specifically, Centrient plans to build on its enzymatic technology to reformulate existing drugs. This could become a key competitive advantage--most competitors rely on chemical synthesis for API production. Centrient's enzymatic process allows the company to command premium prices while taking a cost-effective approach that benefits from minimal waste and higher yields, and offers finished products with an extended shelf life. In addition the process helps Western pharmaceutical companies meet sustainability goals by significantly reducing the use of solvents and harsh chemicals. It also minimizing the discharge of antimicrobial active compounds into rivers through advanced wastewater treatment. -- The group is also launching a new distribution business--it intends to harness its go-to-market capabilities and extensive global customer network to act as an intermediary for API manufacturers. S&P said, "The stable outlook signifies that we expect Centrient's operating performance to remain resilient as the company maintains its leading position within the beta-lactam antibiotics API industry, thanks to its proprietary unique enzymatic process, close partnerships with clients in an industry that has high barriers to entry, and the backward integration of its supply chain. In addition, we expect the company to maintain a relatively disciplined financial policy and not to incur debt to fund large acquisitions or pay shareholder remuneration. "Our base case assumes that adjusted debt to EBITDA will gradually decrease toward 5.0x in 2026, fueled by top-line growth in FDFs and statins, improving manufacturing efficiency, and normalizing input costs as operational issues at its Asian operations are left behind, but constrained by the limited manufacturing capacity in its core antibiotics business. We also forecast that Centrient will maintain positive FOCF of over EUR20 million a year as higher adjusted EBITDA and stronger working capital management absorb the planned step-up in expansionary investment. "We could lower the ratings if Centrient's performance were to deviate from our base case, such that adjusted leverage rises to 7x and remains at that level or FOCF turns negative without signs of a rapid improvement. The most likely causes of such a deterioration would be operational issues at its manufacturing sites or stronger-than-expected pressures from Asian competitors, leading to a sharp decline in adjusted EBITDA margins. We could also lower the ratings if the company's financial policy became more aggressive than expected, involving large, debt-funded acquisitions or shareholder remuneration. "We could raise the rating if the company outperforms our base case, such that adjusted debt leverage decreases to below 5x and remains below that level, and the company and sponsor clearly commit to maintaining leverage at that level. An upgrade would also depend on positive FOCF generation at or above our base-case projections. Given our modest growth forecast for the group's core antibiotics business, this would require seamless execution of its expansion into FDFs and the ramp up of the new business units; efficiency programs leading to stronger improvements in profitability than we currently forecast; and that exceptional costs drop to and remain at normal levels." TRIVIUM PACKAGING: S&P Assigns 'B' Rating to New EUR500MM Term Loan ------------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue rating and '3' recovery rating to Trivium Packaging Finance B.V.'s (B/Stable/--) proposed five-year EUR500 million term loan B. Trivium Packaging, a Netherlands-based metal packaging group operating 49 plants in 18 countries across Europe, North America, and South America, intends to use the proceeds from the issuance to refinance existing debt facilities. Therefore, S&P considers the transaction leverage neutral, with no effect on its 'B' long-term issuer credit rating on the company. VEON LTD: S&P Affirms 'BB-' Ratings After Issuer Substitution ------------------------------------------------------------- S&P Global Ratings affirmed all its ratings on Veon Ltd. and Veon Holdings B.V. at 'BB-', assigned an issuer rating to Veon Midco at 'BB-', and affirmed its issue ratings on the debt at 'BB-'. S&P said, "Our stable outlook indicates that we expect Veon to maintain adjusted leverage of about 2.0x-3.0x and free operating cash flow (FOCF) to debt of well above 5% for the next two years, supported by steady revenue growth, stable profitability and prudent financial policy. "In our view, the 2027 noteholders are substantially in the same credit position even after the issuer substitution. As a part of the legal demerger in the Netherlands, all assets and liabilities excluding the Ukrainian operating subsidiary, Kyivstar, were transferred in April 2025 to new holding entities: Veon Midco B.V. (core assets) and Veon Intermediate Holdings B.V. (noncore assets), while Kyivstar remains under Veon Holdings. The notes due 2027 became unconditionally and irrevocably guaranteed by Veon Amsterdam B.V. (parent of all operating companies), therefore, in our view, it will have the same credit position as before the transfer." The demerger is aimed at facilitating the indirect listing of the Ukraine-based operating company, Kyivstar, on the Nasdaq. On Jan. 13, 2025, Veon and Cohen Circle Acquisition Corp., a U.S.-listed special purpose acquisition vehicle, announced the signing of a letter of intent to enter into a business combination with the aim of indirectly listing Kyivstar, on the Nasdaq. Veon aims to sell a minority stake of up to 20% and will continue to be the majority shareholder and retain control of Kyivstar. S&P expects the proceeds from the sale will be upstreamed to Veon Amsterdam and used for general corporate purposes, including an improvement in Veon's overall liquidity profile. The Ukrainian operations are resilient and cash flow generative. Despite the war in Ukraine, Kyivstar has experienced a strong local currency revenue growth of 11% in 2024, thanks to average revenue per user growth of 13.8% (compared with inflation of 12% in 2024), and a significant growth in direct digital revenues up 122%, led by Kyivstar TV, Kyivstar Cloud, and Helsi (a health care platform with 28 million patients, up 5% year on year), offsetting a loss in subscriber base. Although the digital services revenues currently represent a small portion of overall revenues, S&P expects their growth will continue as mobile data usage continues to increase sharply. Kyivstar is further diversifying its portfolio, entering the ride-hailing business through the $160 million acquisition of Uklon. In terms of profitability, we expect the reported adjusted EBITDA margin to improve and remain strong at about 44%-47%, as elevated network and operational costs begin to moderate. Overall, Ukraine is a cash generative business, close to $190 million annual FOCF, with no external debt outstanding. Veon's dominant market position, ongoing investments in the networks, and emphasis on digital play will support its market position in various markets, despite increased competition from new entrants. Veon ranks either No. 1 or No. 2 in four out of its five markets. It has an incumbent position in Ukraine with 48% subscriber market share, ahead of 32% held by the No. 2 ranking operator, VF Ukraine PrJSC, and third largest mobile operator Lifecell LLC (20% market share) that merged with the fixed and pay-TV provider Datagroup-Volya, now providing triple-play service (Veon remains the leader in the fragmented fixed market with 18% market share). Kyivstar dominant position, strong adoption of multiplay services as evidenced by customer growth of 50% year on year in the fourth quarter, a well-invested 4G network with a 96% coverage, newly acquired 5G spectrum in November 2024, and a partnership with Starlink to bring direct-to-cell satellite connectivity, should provide resilience to its competitive stance. Veon also has a strong and stable position in Pakistan (subscriber market share of 37%), Kazakhstan (subscriber market share of 44%), and Bangladesh (subscriber market share of 20%). In Kazakhstan in January 2025, the largest state-owned operator Kazakhtelecom JSC (55% market share) sold one of its two brands, MTS, to Qatar-based investor Power International Holding (PIH). MTS will start operations with a 30% mobile market share, under the Tele2 and Altel brands. As a result of this sale transaction, Veon's Beeline will emerge as a No. 1 player with a track record of market share gain. S&P said, "We continue to rate Veon above our sovereign ratings on Ukraine and Pakistan. Veon's stand-alone credit profile (SACP) is 'bb-', higher than our foreign currency ratings on Ukraine (foreign currency: SD (selective default)/--/SD) and Pakistan (foreign currency: CCC+/Stable/C). Veon passes our tests for rating above the sovereign. In our view, Veon's liquidity sources are likely to exceed its uses over the next 12 months, even under our stress test assumptions. These incorporate, among other factors, a 50% devaluation of the local currency against the U.S. dollar and a 10%-15% decline in EBITDA from the country." Veon also passes our transfer and convertibility test, which measures the likelihood that both the Ukrainian and Pakistani governments would restrict corporates' access to foreign exchange liquidity at the same time. Veon's good geographic diversity--no single country contributes more than 30% of EBITDA, and it has a sizable cash balance of about $0.8 billion held in hard currencies in the Netherlands--helped it to clear our stress test. S&P said, "In our view, the telecom sector is heavily tied to the domestic economies. There is a reliance on economic growth (especially for the corporate components), domestic spending, and a supportive regulatory environment. Considering our sovereign ratings on countries where there is material exposure, we currently assess the blended sovereign rating for Veon's operations at 'B'. We consider that Veon can be rated up to two notches above the blended sovereign ratings, and so cap our ratings on Veon at 'BB-'." S&P said, "Our stable outlook on Veon indicates that we expect it to maintain adjusted debt to EBITDA of around 2.0x-3.0x and FOCF to debt of well above 5%. This is supported by our expectation of steady EBITDA growth over the next few years and a slowdown in local currency devaluation. "We could downgrade the company if adjusted debt to EBITDA reached 3.0x or if FOCF remained at about 5% on a sustainable basis. This could occur if the company experienced a decline in EBITDA and cash flows linked to either macroeconomic challenges or intensifying competitive landscape in core geographies. We could also downgrade Veon if we were to lower our sovereign rating on one or more of the company's key markets, resulting in a lower blended sovereign rating of 'B-'." S&O could revise upward the SACP on Veon if: -- S&P's adjusted debt to EBITDA improves to below 2.0x and FOCF to debt exceeds 15% on a sustained basis. This would require the company to maintain its leverage at the lower end of its financial policy. -- S&P considers that country risk for Veon's key markets has reduced. An upgrade would require that Veon's SACP has been revised upward, as well as a higher blended sovereign rating of 'B+'. ========= S P A I N ========= [] Moody's Upgrades Ratings on 6 Notes in 2 Spanish RMBS Deals -------------------------------------------------------------- Moody's Ratings has upgraded the ratings of 6 notes in MADRID RMBS I, FTA and MADRID RMBS II, FTA. The rating action reflects the increased levels of credit enhancement for the affected notes and Moody's assessments of likelihood of prolonged interest shortfall. Moody's affirmed the ratings of the notes that had sufficient credit enhancement to maintain their current ratings. Issuer: MADRID RMBS I, FTA EUR1340M Class A2 Notes, Affirmed Aa1 (sf); previously on Oct 26, 2023 Affirmed Aa1 (sf) EUR70M Class B Notes, Affirmed Aa1 (sf); previously on Oct 26, 2023 Affirmed Aa1 (sf) EUR75M Class C Notes, Upgraded to Aa1 (sf); previously on Oct 26, 2023 Upgraded to A1 (sf) EUR34M Class D Notes, Upgraded to A3 (sf); previously on Oct 26, 2023 Upgraded to B3 (sf) EUR21M Class E Notes, Upgraded to Caa1 (sf); previously on Sep 11, 2009 Downgraded to C (sf) Issuer: MADRID RMBS II, FTA EUR270M Class A3 Notes, Affirmed Aa1 (sf); previously on Oct 26, 2023 Affirmed Aa1 (sf) EUR63M Class B Notes, Affirmed Aa1 (sf); previously on Oct 26, 2023 Affirmed Aa1 (sf) EUR67.5M Class C Notes, Upgraded to Aa1 (sf); previously on Oct 26, 2023 Upgraded to A1 (sf) EUR30.6M Class D Notes, Upgraded to Baa1 (sf); previously on Oct 26, 2023 Upgraded to B3 (sf) EUR18.9M Class E Notes, Upgraded to Caa2 (sf); previously on Sep 11, 2009 Downgraded to C (sf) Maximum achievable rating is Aa1 (sf) for structured finance transactions in Spain, driven by the corresponding local currency country ceiling of the country. RATINGS RATIONALE The rating action is prompted by an increase in credit enhancement for the affected tranches, driven by the sequentially amortizing structure as well as the continued replenishment of the reserve fund in both transactions. Increase in Available Credit Enhancement MADRID RMBS I, FTA Sequential amortization and the continuous replenishment of the reserve fund via trapping of excess spread led to the increase in the credit enhancement available in this transaction. For instance, the credit enhancement for the Class C notes, the most senior tranche affected by the upgrade action, increased to 24.94% up from 17.29% since the last rating action. MADRID RMBS II, FTA Sequential amortization and a the continuous replenishment of the reserve fund via trapping of excess spread led to the increase in the credit enhancement available in this transaction. For instance, the credit enhancement for the Class C notes, the most senior tranche affected by the upgrade action, increased to 24.84% up from 18.20% since the last rating action. Key Collateral Assumptions Maintained As part of the rating action, Moody's reassessed Moody's lifetimes loss expectation for the portfolio reflecting the collateral performance to date. MADRID RMBS I, FTA The performance of the transaction has remained stable since last rating action. 90 days plus arrears currently stand at 0.62% of current pool balance showing a decreasing trend over the past year. Cumulative defaults currently stand at 20.62% of original pool balance, up from 20.46% a year earlier. Moody's maintained the expected loss assumption at 10.85% as a percentage of original pool balance, this translates to an expected loss assumption of 4.88% as percentage of current pool balance. Moody's reassessed loan-by-loan information to estimate the loss Moody's expects the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 13.00%. MADRID RMBS II, FTA The performance of the transaction has remained stable since last rating action. 90 days plus arrears currently stand at 0.53% of current pool balance showing a decreasing trend over the past year. Cumulative defaults currently stand at 22.11% of original pool balance, up from 21.84% a year earlier. Moody's maintained the expected loss assumption at 11.59% as a percentage of original pool balance, this translates to an expected loss assumption of 5.10% as percentage of current pool balance. Moody's reassessed loan-by-loan information to estimate the loss Moody's expects the portfolio to incur in a severe economic stress. As a result, Moody's have maintained the MILAN Stressed Loss assumption at 14.30%. Moody's analysis also took into account the interest deferral triggers that allow interest on the Classes B, C, D and E notes to be subordinated in the notes' payments waterfall, but still remaining positioned above the reserve fund replenishment. None of the triggers are breached. Moody's considered the likelihood of prolonged interest shortfalls on these notes in future to be very low for both transactions for all tranches except for Class E notes. The principal methodology used in these ratings was "Residential Mortgage-Backed Securitizations" published in October 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement and (3) improvements in the credit quality of the transaction counterparties and (4) a decrease in sovereign risk. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. =========== S W E D E N =========== VOLVO CAR: Moody's Affirms 'Ba1' CFR & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Ratings has changed the outlook on the ratings of Volvo Car AB (Volvo Cars or the company) to negative from stable. Concurrently, Moody's have affirmed Volvo Cars' Ba1 corporate family rating, its Ba1-PD probability of default rating, its Ba1 guaranteed senior unsecured instrument ratings, and its (P)Ba1 backed senior unsecured MTN program rating. RATINGS RATIONALE The rating action is driven by the expectation that Volvo Cars' operating performance will remain subdue this year in a challenging market environment. Rising macroeconomic challenges combined with trade tensions affecting the US market increase the challenge to improve Volvo Cars' profitability as previously expected. The negative outlook suggests that Moody's might lower the rating to Ba2 if the company fails to demonstrate signs of operational recovery, such as improvements in margins and free cash flow, in the coming months. This potential downgrade could be driven by continued macroeconomic challenges in Volvo Cars' key markets and increasing trade tensions, including significant permanent tariffs. Volvo Cars' balance sheet remains strong including very good liquidity and relatively low leverage, supporting the affirmation of the rating at the Ba1 level. The rating incorporates a cautious outlook on the macroeconomic environment, including a slowdown of the G-20 GDP growth to 1.9% in 2025 (down from 2.9% in 2024), considering that unpredictable US trade policy could undermine consumer confidence and disrupt supply chains. Currently, there is a 25% tariff on imports of both finished vehicles and components from Europe, which poses a risk to Volvo Cars as it imports approximately 100,000 vehicles from Europe. However, due to the unpredictability of US trade policy, these tariffs have not been fully factored into Moody's forecasts. A permanent 25% tariff or a further escalation of trade tensions pose an additional downside risk to the rating. Mitigating actions for Volvo Cars include its ability to increase prices without hurting demand and boosting local production though the latter would incur extra costs and investments. During its Q1 earnings call, Volvo Cars management estimated its 2025 tariff bill on imported vehicles and components at 1% of annual revenue (with mitigation, mainly price increase) to 2% of annual revenue (without mitigation). This tariff bill for 2025 is calculated on a 9-month basis, from April when the tariffs were implemented to December. Volvo Cars has one factory in the US in Charleston South Carolina, which is currently underutilized (2024 production of around 20K units mainly S60 and EX90). The company currently imports around 100K vehicles from Europe to the US, mainly XC40, XC60 and XC90. The new management plans to increase the production capacity of its US plant, likely by adding a new model to serve the US market. Volvo Cars reported weak Q1 2025 figures, with revenue down 12% year-over-year and an EBIT margin of 2.3% (company definition), or 4.3% when adjusted for FX one-offs. The margin suffered due to negative volume mix and pricing challenges. Retail sales fell 8% in Europe and 12% in China, while the U.S. saw an 8% increase, likely due to pre-buying before import tariffs. For 2025, Moody's expects a revenue decline and a low 2.0% EBIT margin, along with a negative free cash flow of SEK 14 billion, excluding tariff costs as estimated by management. Operating performance and cash flow are forecasted to improve by 2026, driven by a new cost-saving program. Management priorities include SEK 18 billion in cost savings by 2026, increased regional decision-making, and expanding PHEV options as a pragmatic step toward electrification. Volvo Cars' Ba1 CFR is underpinned by (1) its well-known brand identity and established domestic market presence; (2) global reach including a significant presence in China through ties with main shareholder, the Zhejiang Geely Holding Group Company Limited (Geely Holding), (3) ongoing substantial investments in electrification and modular platforms provide the company with a more efficient base for its new model lineup and a high proportion of electrified vehicles; (4) prudent financial policies with moderate leverage, and (5) a very good liquidity profile. At the same time, the rating is constrained by (1) Volvo Cars' modest market position and smaller size compared to global premium competitors; (2) lower profitability than some other premium manufacturers; and (3) albeit improving - its reliance on a few models, with 60% of 2024 sales from the XC40, XC60, and XC90 SUVs, (4) exposure to stricter environmental standards that necessitate high capital and R&D expenses, impacting free cash flow and (5) the company's exposure to the cyclical and competitive global automotive industry. LIQUIDITY Volvo Cars' liquidity profile is very good, supported by unrestricted cash and cash equivalents of around SEK43.5 billion as of end-March 2025 and access to a new EUR1.5 billion (approximately SEK16.3 billion) multi-currency revolving credit facility maturing in 2029 (with two one-year extensions) and a new EUR0.5 billion (approximately SEK5.5 billion) facility maturing in 2027 (with two one-year extensions), both fully undrawn at March 2025. The company's liquidity sources include funds from operations which Moody's expects to reach SEK32 billion in 2025. Moody's expects liquidity sources to cover liquidity requirements over the next six quarters including working cash (estimated at SEK11 billion annually in line with Moody's standard assumptions of 3% of revenue), sustained high capex for 2025, working capital needs and upcoming debt maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Volvo Cars' rating could be downgraded if the company's credit metrics deteriorated as follows: -- Moody's adjusted EBIT margin remained below 4%; -- Free cash flows remained negative; -- Moody's-adjusted debt/EBITDA exceeded 3.0x. Additionally, a material shift in the company's conservative financial policy or sizable debt-funded acquisitions could lead to a downgrade. The company strong cash balance as illustrated by cash / debt of 110% in 2024 is an important mitigant to temporary weak operating performance. Given the negative outlook, an upgrade is unlikely in the near-term. Upward rating pressure could develop in the medium-term if the company was able to demonstrate that it can successfully transform its product portfolio towards low and zero emission vehicles whilst improving the product breadth and enhance its geographic diversity to a level comparable with that of its global peers. More specifically, Moody's could consider upgrading Volvo Cars' ratings to Baa3 in case of: -- Evidence that the previous model introductions (including BEV models) remain a sustained success and positively contribute to Volvo Cars' diversification of profit and cash flow generation; -- Visibility that Volvo's profitability based on an adjusted EBIT margin can improve towards 6.0%; -- A continued Moody's-adjusted debt/EBITDA below 2.0x; and -- Positive free cash flow generation despite the high investment spending as anticipated for the coming years. Moreover, the maintenance of a prudent financial policy that includes low debt leverage and a solid liquidity profile on a sustained basis are key requirements for an upgrade towards investment grade territory. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Automobile Manufacturers published in April 2025. =========================== U N I T E D K I N G D O M =========================== ASPERS (MILTON KEYNES): FTI Named as Joint Administrators --------------------------------------------------------- Aspers (Milton Keynes) Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) Court Number: CR-2025-002459, and Andrew James Johnson, Matthew Boyd Callaghan, Shamil Malde of FTI Consulting LLP, were appointed as joint administrators on April 8, 2025. Aspers (Milton Keynes) specialized in gambling and betting activities. Its registered office is at C/O Wb Company Services Limited 3 Dorset Rise, Blackfriars, London, England, EC4Y 8EN. Its principal trading address is at Xscape, 602 Marlborough Gate, Milton Keynes, MK9 3XS. The joint administrators can be reached at: Andrew James Johnson Matthew Boyd Callaghan Shamil Malde FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, Greater London United Kingdom Further details contact: FTI Consulting LLP Tel No: +44 20 3319 5697 Email: AspersAdministrators@FTIconsulting.com ASPERS FINANCE: FTI Consulting Named as Joint Administrators ------------------------------------------------------------ Aspers Finance Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) Court Number: CR-2025-002458, and Andrew James Johnson, Matthew Boyd Callaghan, Shamil Malde of FTI Consulting LLP, were appointed as joint administrators on April 8, 2025. Aspers Finance specialized in activities of head offices. Its registered office is at C/O Wb Company Services Limited 3 Dorset Rise, Blackfriars, London, England, EC4Y 8EN. The joint administrators can be reached at: Andrew James Johnson Matthew Boyd Callaghan Shamil Malde FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, Greater London United Kingdom Further details contact: FTI Consulting LLP Tel No: +44 20 3319 5697 Email: AspersAdministrators@FTIconsulting.com ASPERS GROUP: FTI Consulting Named as Joint Administrators ---------------------------------------------------------- Aspers Group Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) Court Number: CR-2025-002456, and Andrew James Johnson, Matthew Boyd Callaghan, Shamil Malde of FTI Consulting LLP, were appointed as joint administrators on April 8, 2025. Aspers Group specialized in activities of head offices. Its registered office is at C/O Wb Company Services Limited 3 Dorset Rise, Blackfriars, London, England, EC4Y 8EN. The joint administrators can be reached at: Andrew James Johnson Matthew Boyd Callaghan Shamil Malde FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, Greater London United Kingdom Further details contact: FTI Consulting LLP Tel No: +44 20 3319 5697 Email: AspersAdministrators@FTIconsulting.com ASPERS UK: FTI Consulting Named as Joint Administrators ------------------------------------------------------- Aspers UK Holdings Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) Court Number: CR-2025-002457, and and Andrew James Johnson, Matthew Boyd Callaghan, Shamil Malde of FTI Consulting LLP, were appointed as joint administrators on April 8, 2025. Aspers UK specialized in head offices activities. Its registered office is at C/O Wb Company Services Limited 3 Dorset Rise, Blackfriars, London, England, EC4Y 8EN. The joint administrators can be reached at: Andrew James Johnson Matthew Boyd Callaghan Shamil Malde FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, Greater London United Kingdom Further details contact: FTI Consulting LLP Tel No: +44 20 3319 5697 Email: AspersAdministrators@FTIconsulting.com SEKURA MOBILE: RG Insolvency Named as Joint Administrators ---------------------------------------------------------- Sekura Mobile Intelligence Ltd was placed into administration proceedings in the High Court of Justice, Business & Property Courts of England and Wales Court Number: CR-2025-001915, and Avner Radomsky and Charlotte Jobling of RG Insolvency, were appointed as joint administrators on April 1, 2025. Sekura Mobile specialized in business and domestic software development. Its registered office is at Bankside 300 Peachman Way, Broadland Business Park, Norwich, Norfolk, United Kingdom NR7 0LB. Its principal trading address is at Unit 4 Aylsham Business Park, Richard Oakes Road, Aylsham, Norfolk NR11 6FD. The joint administrators can be reached at: Avner Radomsky Charlotte Jobling RG Insolvency Devonshire House, Manor Way Borehamwood, Hertfordshire WD6 1QQ Further details, contact: The Joint Administrators Email: info@rginsolvency.co Alternative contact: Rebecca Pedersen SWANGLEN METAL: Rushtons Insolvency Named as Administrator ---------------------------------------------------------- Swanglen Metal Products Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in Leeds, Insolvency and Companies List (ChD) Court Number: CR-2025-000322, and Nicola Baker of Rushtons Insolvency Limited, was appointed as administrator on April 8, 2025. Swanglen Metal specialized in metal fabrication. Its registered office and principal trading address is at Riverside Castlefields Mill, Crossflatts, Bingley, BD16 2AB. The administrator can be reached at: Nicola Baker Rushtons Insolvency Limited 6 Festival Building, Ashley Lane Saltaire, BD17 7DQ Further details contact: The Administrators Tel No: 01274 598 585 Email: dwolski@rushtonsifs.co.uk Alternative contact: Dominic Wolski WAKELET LIMITED: Leonard Curtis Named as Joint Administrators ------------------------------------------------------------- Wakelet 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-000537, and Mike Dillon and Hilary Pascoe of Leonard Curtis, were appointed as joint administrators on April 10, 2025. Wakelet Limited specialized in business support service activities. Its registered office and principal trading address is at Bright Building Manchester Science, Pencroft Way, Manchester, M15 6GZ. The joint administrators can be reached at: Mike Dillon Hilary Pascoe Leonard Curtis Riverside House Irwell Street, Manchester M3 5EN Further details contact: The Joint Administrators Tel: 0161 831 9999 Email: recovery@leonardcurtis.co.uk Alternative contact: Avery Lewis YOUR STAFF: Exigen Group Named as Administrators ------------------------------------------------ Your Staff Solutions Limited was placed into administration proceedings in the High Court of Justice Business & Property Courts in Manchester Court Number: CR-2025-000467, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on April 9, 2025. Your Staff Solutions offered business support services. Its registered office is at Exigen Group Limited, Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD. Its principal trading address is at West Road, Harlow Enterprise Hub, 29 Harlow, CM20 2NQ. The administrators can be reached at: David Kemp Richard Hunt Exigen Group Limited Warehouse W, 3 Western Gateway Royal Victoria Docks, London E16 1BD Further details contact: David Kemp Tel No: 0207 538 2222 ********* 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. 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