250516.mbx

250516.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, May 16, 2025, Vol. 26, No. 98 Headlines F R A N C E EXPLEO GROUP: Fitch Affirms 'B-' LT IDR, Alters Outlook to Neg. I R E L A N D ACCUNIA EUROPEAN I: Fitch Lowers Rating on Class F Notes to 'Bsf' BNPP IP 2015-1: Fitch Affirms 'BB-sf' Rating on Class F-R Notes HARVEST CLO XV: Fitch Affirms 'B+sf' Rating on Class F-R Notes NEWHAVEN II: Fitch Lowers Rating on Class F-R Notes to 'B-sf' PHOENIX PARK: Moody's Hikes Rating on EUR11.8MM E Notes to B1 ST. PAUL'S VI: Moody's Hikes Rating on EUR12MM F-R Notes to B2 I T A L Y ESSELUNGA SPA: Moody's Affirms Ba1 CFR, Alters Outlook to Negative N E T H E R L A N D S VODAFONEZIGGO GROUP: Moody's Alters Outlook on B1 CFR to Negative T U R K E Y CIMKO CIMENTO: Fitch Assigns 'B+(EXP)' LongTerm IDR, Outlook Stable U N I T E D K I N G D O M AGGREKO HOLDINGS: Moody's Rates New Senior Secured Notes 'B1' BAR 2064: Carter Clark Named as Administrators BEWLEY STREET: Mercer & Hole Named as Administrators DEUCE MIDCO: Fitch Affirms 'B' LT IDR, Alters Outlook to Positive KANDOR CLOTHING: Harrisons Business Named as Administrators NEW PERSPECTIVE: MHA Named as Administrators QUICK REACH: Alvarez & Marsal Named as Administrators X X X X X X X X [] BOOK REVIEW: The Titans of Takeover - - - - - =========== F R A N C E =========== EXPLEO GROUP: Fitch Affirms 'B-' LT IDR, Alters Outlook to Neg. --------------------------------------------------------------- Fitch Ratings has revised the Outlook on Expleo Group's Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'B-'. Fitch has also downgraded Expleo's EUR610 million senior secured term loan B to 'B-' from 'B' with a Recovery Rating of 'RR4' from 'RR3' on a lower going concern assessment. The Negative Outlook reflects its expectation of EBITDA decline in 2025 on weaker performance in Expleo's core markets, including the automotive sector in Germany and France, and key credit metrics (EBITDA margin, free cash flow (FCF) and leverage) consequently being weak for the rating. The IDR affirmation reflects its updated rating case with restructuring and macro-driven recovery in 2026 and 2027 bringing key ratios to within the rating sensitivities. Fitch may revises the Outlook to Stable on higher visibility of recovery or downgrade the rating if the weakness proves to be structural and leads to deteriorating liquidity. Key Rating Drivers Regional Weakness Affects Revenues: Fitch expects Expleo's revenue deterioration in 2025 to be followed by modest recovery from 2026. The company continues to suffer from lower volumes, amid a challenging macroeconomic environment in its core markets of France and Germany, along with its recently implemented strategy to tender for higher margin contracts to protect profitability. Its revised rating case for Expleo also considers its material exposure to the automotive sector's deteriorating outlook. Management is addressing the underperformance with some savings already delivered or secured, but Fitch expects that revenue and margin recovery will take longer. Weaker Profitability to Recover: Fitch forecasts Expleo's EBITDA margin to reduce to 7.0% in 2025 (2024: 8.3%) on lower revenue and its limited ability for cost absorption due to material exposure to high indirect costs. Fitch expects the margin to recover to above the 8% negative rating sensitivity in 2026 when high non-recurring costs on restructuring will have their full impact. Negative to Neutral FCF: Fitch expects FCF to remain negative in the medium term on lower profitability and interest paid on high debt drawdown. This is mitigated by Expleo's stricter working capital management, lower capex and a delay in its acquisitive strategy to support inorganic growth. Fitch expects EBITDA recovery to turn FCF neutral to positive in 2027. Modest Deleveraging in Medium Term: Fitch expects leverage to spike at end-2025 and to remain outside the negative rating sensitivity at end-2026, albeit gradually declining on EBITDA recovery. The expected EBITDA leverage of 8.2x at end-2025 (6.8x at end-2024) reflects both an increase in total outstanding debt (on factoring use and the revolving credit facility (RCF) drawdown), as well as a drop in EBITDA. Diversification to Improve: Fitch views Expleo's shift towards use of artificial intelligence, along with its strategic redirection of its business portfolio to the aerospace and defence and energy and utilities sectors with reducing concentration in one region as potentially credit positive. These sectors have higher profitability margins and are one of the core objectives of management's new strategic restructuring programme. Fitch anticipates that the benefits will be reflected in Expleo's financial performance in the medium to long term, supported by improved economic conditions. Peer Analysis Expleo is a niche engineering, consulting and technological company, which differentiates it from several general IT services companies. Fitch therefore focuses on the characteristics of the broader business services market portfolio rather than of niche-specific peers. These include moderate recurring revenue streams with a stable customer base, increased geographic concentration within its local market, defensible market positions and reputational value, growth strategy predominantly dependent on bolt-on acquisitions and high but sustainable leverage. Expleo's business size is comparable with that of peers such as property management service provider Emeria SASU (B-/Stable), global network service provider Irel Bidco S.a.r.l. (B+/Stable) and Polygon Group AB (B/Negative), but smaller than provider of telecom infrastructure services, Circet Europe SAS (B+/Stable). Across a broad universe of business services companies rated by Fitch, Expleo's average EBITDA margins of 8.5% are modest relative to Circet's 10%-11%, Emeria's 15%-19% and Irel's 21%, but stronger than Polygon's 6%-7%. This reflects Expleo's refocus on higher margin orders, ongoing restructuring efforts and the asset-light business model. Expleo's FCF cash generation remains weaker than Circet's through the cycle, as underlined by the two-notch rating difference. Expleo's EBITDA gross leverage between 6.9x-8.2x during 2025-2026 is weaker than Irel's 4.8x-5.2x, but better than Emeria's at 11.2x-15.5x. Key Assumptions - Revenue to decline by 2.5% in 2025 and later to grow by 3.5% on average until 2028 - EBITDA margin at 7.0% in 2025 reflecting currently weaker trading, followed by an improvement to above 8% on business refocus and restructuring - Cash interest paid to stabilise at EUR51 million in 2025 from EUR64 million in 2023 on lower variable interest rates. Euribor interest rate to follow Fitch's latest Global Economic Outlook - Working capital outflow between -0.4% and -0.9% of revenue - Capex to remain modest at around 1.7% of revenue until 2028 - Modest M&A to restart in 2026 - Convertible bonds to continue capitalising interest at 9% to 2028, which is treated as equity under its criteria Recovery Analysis - The recovery analysis assumes that Expleo would be reorganised as a going concern (GC) in a bankruptcy, rather than liquidated in a default. - A 10% administrative claim. - GC EBITDA is estimated at EUR105 million, revised down from EUR110 million in its prior analysis, given the change in tax regulations causing structurally lower EBITDA for Expleo. This reflects Fitch's view of a sustainable, post-reorganisation EBITDA level, on which Fitch bases the enterprise valuation (EV) and follows a conservative approach to Expleo's newly introduced restructuring programme strategy. - An EV multiple of 5.0x EBITDA is applied to GC EBITDA to calculate a post-reorganisation EV. - The multiple of 5.0x reflects Expleo's business model as a multi-specialist provider of engineering, technology and consulting services relative to other business services companies that are mainly focused on general IT services. It is further supported by a strong niche market position and well-known investment-grade customer base. - The waterfall analysis is based on the capital structure as of March 2025 and consists of super senior factoring, with its highest outstanding amount of EUR127 million at end-2024. Its senior secured EUR115 million RCF is fully drawn post restructuring, alongside a senior secured term loan B of EUR610 million and overdraft facility drawn by EUR7 million. - These assumptions result in a recovery rate for the senior secured instrument within the 'RR4' range, resulting in the instrument rating being equalised with the IDR at 'B-'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 6.5x - EBITDA margin below 8% - Negative FCF - EBITDA interest coverage below 1.5x, all on a sustained basis - A deterioration in liquidity Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA margin trending towards 10% - EBITDA gross leverage below 5x - FCF margin above 2% - EBITDA interest coverage above 2x, all on a sustained basis Liquidity and Debt Structure At end-March 2025, Expleo reported EUR67.1 million of cash, which Fitch adjusts to EUR58.7 million, assuming intra-year working-capital changes at 2.5% of sales, and a fully drawn RCF of EUR115 million. The low cash balance reflects lower revenues, business seasonality, with the strongest cash-generative months at year-end, restructuring costs and working-capital swings. Fitch forecasts liquidity to weaken with negative FCF of EUR15 million for 2025, before it improves to neutral in 2026, and continued reliance on its factoring facility (EUR127 million at end-2024). Issuer Profile Expleo is a leading integrated engineering, consulting and technology servicing provider for mostly automotive and aerospace companies. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Expleo Group LT IDR B- Affirmed B- senior secured LT B- Downgrade RR4 B EUR 610 mln Floating Term Loan B 28-Sep-2027 LT B- Downgrade RR4 B ============= I R E L A N D ============= ACCUNIA EUROPEAN I: Fitch Lowers Rating on Class F Notes to 'Bsf' ----------------------------------------------------------------- Fitch Ratings has upgraded Accunia European CLO I DAC's class C notes, downgraded the class E and F notes and affirmed the others. Entity/Debt Rating Prior ----------- ------ ----- Accunia European CLO I DAC A XS1966591452 LT AAAsf Affirmed AAAsf B-1 XS1966593151 LT AAAsf Affirmed AAAsf B-2 XS1966595016 LT AAAsf Affirmed AAAsf C XS1966596683 LT AAsf Upgrade A+sf D XS1966598382 LT BBB+sf Affirmed BBB+sf E XS1966599430 LT BB-sf Downgrade BB+sf F XS1966599869 LT Bsf Downgrade B+sf Transaction Summary Accunia European CLO I DAC is a cash flow CLO comprising mostly senior secured obligations. The transaction is actively managed by Accunia Fondsmaeglerselskab A/S and exited its reinvestment period in May 2021. KEY RATING DRIVERS Amortisation Benefits Senior Notes: Since Fitch's last rating action in June 2024, the class A notes have deleveraged by another EUR48 million as of 15 April 2025. The amortisation has increased credit enhancement for the senior notes, outweighing further par losses. This has resulted in the upgrade of the class C notes and affirmation of the class A, B and D notes. Junior Notes Sensitive to Deterioration: The transaction has experienced further par losses since the last review and is currently 5.6% below par. The reported defaults accounted for EUR8.1 million while the class F notes are marginally failing the class F coverage test. Together with further deterioration of the portfolio's weighted average rating factor (WARF), this has resulted in the downgrades of the class E and F notes. The Negative Outlooks reflect the small cushion at the notes' ratings and increased macro-economic risk due to the trade war escalation. Fitch does not expect to downgrade the class F notes to the 'CCC' category as Fitch believes credit enhancement will provide a margin of safety for the notes. Average Asset Quality: The weighted average rating of the portfolio is at 'B'/'B-'. The Fitch weighted average rating factor is at 29.2 and 30.0 after the one notch down adjustment to assets with a Fitch equivalent rating on Negative Outlook. High Recovery Expectations: Senior secured obligations comprise 99% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio was 61.0%. Diversified Portfolio: The portfolio is still reasonably diversified across obligors, countries and industries although the top 10 obligor concentration limit is failing. The top 10 obligors and the largest obligor represented 28.0% and 3.3% of the portfolio balance, respectively, as of the report dated 3 April 2025. The exposure to the three largest Fitch-defined industries is 34.4% while fixed-rate assets are at 3.4% of the portfolio balance, which is below the maximum of 7.5%. The portfolio has exposure of about EUR3.5 million (or 1.8% of the balance of the performing assets excluding cash) beyond the legal final maturity of the notes. Fitch has assumed this is subjected to fire sale at Fitch's recovery rate. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in May 2021, and the most senior notes are deleveraging. The manager can reinvest unscheduled principal proceeds and sale proceeds from credit improved/impaired obligations after the reinvestment period, subject to compliance with the reinvestment criteria. However, the transaction cannot reinvest due to the failure of another rating agency's WARF and Caa limits and Fitch's 'CCC' limit. Given the manager's inability to reinvest, Fitch's analysis is based on using the current portfolio for the downgrade analysis and for upgrade analysis, notching the Negative Outlook assets while flooring the weighted average life of the portfolio at four years. Deviation from MIR: The class C notes are rated one notch below their model-implied rating (MIR). The deviation reflects the insufficient cushion at the MIR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if loss expectations are larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Accunia European CLO I DAC Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for this transaction. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose in the key rating drivers any ESG factor which has a significant impact on the rating on an individual basis. BNPP IP 2015-1: Fitch Affirms 'BB-sf' Rating on Class F-R Notes --------------------------------------------------------------- Fitch Ratings has upgraded BNPP IP Euro CLO 2015-1 DAC's class B-1-RR, B-2-RR and C-RR notes and affirmed the others. Entity/Debt Rating Prior ----------- ------ ----- BNPP IP Euro CLO 2015-1 DAC A-R XS1802328267 LT AAAsf Affirmed AAAsf B-1-RR XS1802328424 LT AAAsf Upgrade AA+sf B-2-RR XS1802328770 LT AAAsf Upgrade AA+sf C-RR XS1802329075 LT AAsf Upgrade A+sf D-RR XS1802330677 LT BBB+sf Affirmed BBB+sf E-R XS1802331139 LT BB+sf Affirmed BB+sf F-R XS1802332533 LT BB-sf Affirmed BB-sf Transaction Summary BNPP IP Euro CLO 2015-1 DAC is a cash flow CLO backed by a portfolio of mainly European leveraged loans. The transaction is actively managed by BNP Paribas Asset Management Europe and exited its reinvestment period in July 2022. KEY RATING DRIVERS Amortisation Benefits Senior Notes: The transaction continues to deleverage, with the class A notes having paid down by about EUR33 million since July 2024. The amortisation has resulted in an increase in credit enhancement for the senior notes, which has driven the upgrades of the class B-1RR, B-2RR and C notes. The Positive Outlooks on the C-RR and D-RR notes reflect the ongoing deleveraging of the transaction and potential for upgrade if transaction performance remains stable. The Stable Outlooks on the class A-R, B-1-RR and B-2-RR and E-R notes reflect the comfortable default rate cushion at their respective ratings. Junior Notes Sensitive to Deterioration: The portfolio's par erosion at 2.2% is largely unchanged from July 2024, but the exposure to assets with a Fitch-derived rating of 'CCC+' and below has risen to 12.4%, well above the limit of 7.5%. The portfolio had no reported defaults as of the 3 April 2025 trustee report. However, the limited break-even default rating cushion at the class F-R notes' current rating could deteriorate if the negative impact is not offset by amortisation. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in July 2022, and the most senior notes are deleveraging. The transaction is failing Fitch's 'CCC' test and other credit rating agency's tests, constraining reinvestment. Given the manager's inability to reinvest and the short weighted average life (WAL), its analysis is based on a Fitch-stressed portfolio, where assets with Negative Outlook are notched down by one level, with a 'CCC-' floor when testing for downgrades. Fitch also applies a floor to the portfolio's WAL at four years when testing for upgrades. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the transaction's underlying obligors at 'B'/'B-'. The weighted-average rating factor, as calculated by Fitch under its latest criteria, is 29.4. High Recovery Expectations: The portfolio comprises 98.3% of senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The weighted average recovery rate, as calculated by Fitch, is 61.2%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 20.3%, and the largest obligor represents 2.5% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 31.1%, as calculated by the trustee. Cash Flow Analysis: Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par-value and interest-coverage tests. Deviation from MIR: The classes C-RR and D-RR notes are one and two notches below their respective model-implied ratings (MIR). The deviation reflects the insufficient default-rate cushion at the MIR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for BNPP IP Euro CLO 2015-1 DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. HARVEST CLO XV: Fitch Affirms 'B+sf' Rating on Class F-R Notes -------------------------------------------------------------- Fitch Ratings has upgraded Harvest CLO XV DAC's class C-R, D-R and E-R notes and affirmed the others. The Outlook on the class F-R notes has been revised to Stable from Negative. Entity/Debt Rating Prior ----------- ------ ----- Harvest CLO XV DAC A-2-R XS1820808456 LT AAAsf Affirmed AAAsf B-1-R XS1817777961 LT AAAsf Affirmed AAAsf B-2-R XS1817778696 LT AAAsf Affirmed AAAsf C-R XS1817779231 LT AAAsf Upgrade A+sf D-R XS1817779827 LT AA-sf Upgrade BBB+sf E-R XS1817780320 LT BBB-sf Upgrade BB+sf F-R XS1817780676 LT B+sf Affirmed B+sf Transaction Summary Harvest CLO XV DAC is a cash flow CLO mostly comprising senior secured obligations. The transaction is actively managed by Investcorp Credit Management EU Limited and exited its reinvestment period in May 2022. KEY RATING DRIVERS Amortisation Benefits Senior Notes: The class A-1-R notes have been paid in full. The transaction continues to deleverage, with the class A-2-R notes having been paid down by about EUR2.2 million since the last review in July 2024. The amortisation has resulted in increased credit enhancement for all notes and therefore the upgrade of the class C-R, D-R and E-R notes. Large Cushion Supports Stable Outlooks: All notes have large default-rate buffers to support their ratings and should be capable of absorbing further defaults in the portfolio. The ratings also reflect sufficient credit protection to withstand potential deterioration in the credit quality of the portfolio in their associated stress scenarios. Portfolio Deterioration; Limited Losses: The transaction is currently about 3.5% below target par versus 2.4% below target par in the last review following further par erosion. The par erosion is due partly to EUR5.6 million reported defaults in the portfolio. Exposure to assets with a Fitch-derived rating of 'CCC+' and below is 9.6%, according to the 31 March 2025 trustee report, versus a limit of 7.5%. However, losses are smaller than its rating case assumptions. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The weighted average rating factor (WARF) of the current portfolio is 28.1, as calculated by Fitch under its latest criteria. High Recovery Expectations: Senior secured obligations comprise 96.2% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio was 60.4%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by the trustee, is 23.1%, and no obligor represents more than 3.7% of the portfolio balance. The exposure to the three largest Fitch-defined industries is 31% as reported by the trustee. Fixed-rate assets currently are reported by the trustee at 7.5% of the portfolio balance, above the current maximum of 5%. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in May 2022, and the most senior notes are deleveraging. The transaction is failing another rating agency's WARF test, therefore reinvestment is restricted as it must be satisfied post-reinvestment period. Given the manager's inability to reinvest and the short weighted average life, Fitch's analysis is based on the current portfolio and notching the assets with Negative Outlook down by one notch. Cash Flow Analysis: Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par-value and interest-coverage tests. Deviation from Model-implied Ratings: The class D-R notes are rated two notches below the model-implied rating (MIR), and the class E-R notes are two notches below the MIR. The deviation reflects limited default-rate cushion at their MIRs under the Fitch-stressed portfolio and uncertain macro-economic conditions. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed, due to unexpectedly high levels of defaults and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Harvest CLO XV DAC Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Harvest CLO XV DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. NEWHAVEN II: Fitch Lowers Rating on Class F-R Notes to 'B-sf' ------------------------------------------------------------- Fitch Ratings has upgraded Newhaven II CLO DAC's class C-R to 'AA+' from 'AA' with a Positive Outlook and D-R Notes to 'A+' from 'A-', downgraded the class F-R note to 'B-' from 'B+' with a Stable Outlook and affirmed the rest. Entity/Debt Rating Prior ----------- ------ ----- Newhaven II CLO DAC A-1-R XS1767787333 LT AAAsf Affirmed AAAsf A-2-R XS1769793990 LT AAAsf Affirmed AAAsf B-1-R XS1767788067 LT AAAsf Affirmed AAAsf B-2-R XS1767788810 LT AAAsf Affirmed AAAsf C-R XS1767789461 LT AA+sf Upgrade AAsf D-R XS1767790394 LT A+sf Upgrade A-sf E-R XS1767789974 LT BB+sf Affirmed BB+sf F-R XS1767790121 LT B-sf Downgrade B+sf Transaction Summary Newhaven II CLO DAC is a cash flow CLO mostly comprised of senior secured obligations and is managed by Bain Capital Credit, Ltd. The transaction closed in January 2016 and exited its reinvestment period in February 2022. KEY RATING DRIVERS Amortisation Benefits Senior Notes: The class A-1-R and A-2-R notes have been 66% paid down since the transaction closed, and EUR70 million and EUR12.5 million of these two notes, respectively, has been repaid since the last review. This amortisation has increased the credit enhancement of senior notes, outweighing further par losses that have occurred since the previous review. This has resulted in the upgrade of the class C-R and D-R notes, and affirmation of the class A-R, B-R and E-R notes. Junior Notes Sensitive to Deterioration: The transaction has experienced further par losses since the previous review and is 5.5% below par. The reported defaults totalled EUR15.5 million and the class F-R note is failing the class F-R coverage test. This, together with the deterioration of the portfolio's weighted average rating factor, has resulted in the downgrade of the class F-R notes. Average Asset Quality: The weighted average rating of the portfolio is 'B'/'B-'. The Fitch weighted average rating factors are 27.4 and 28.9 after the one-notch downward adjustment to assets with a Fitch-equivalent rating on Negative Outlook. High Recovery Expectations: Senior secured obligations comprise 96.3% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than second-lien, unsecured and mezzanine assets. The weighted average recovery rate (WARR) disclosed in the latest trustee report for the portfolio was 62.9%, in breach of the test limit of 63%. Diversified Portfolio: The portfolio is reasonably diversified across obligors, countries and industries, although the top 10 obligor concentration limit is failing, at 19.1% above a test limit of 18%, according to the latest trustee report. The largest obligor represents 2.2% of the portfolio balance. The exposure to the three largest Fitch-defined industries is 28.4% while fixed-rate assets constitute 4.3%, below the maximum of 10%. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in February 2022, and the most senior notes are deleveraging. However, the transaction cannot reinvest due to the failure of the Fitch 'CCC' limit and the class F-R par value test. The manager's inability to reinvest means Fitch's downgrade analysis is based on the current portfolio, and the upgrade analysis on notching the Negative Outlook assets while flooring the weighted average life of the portfolio at four and a half years, as the transaction has this flat weighted average life test covenant since February 2023. Model Implied Rating Deviation: The class C-R notes are rated one notch below their model-implied rating. The rating deviation reflects the insufficient default rate cushion at the model-implied rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than Fitch initially assumed, due to unexpectedly high defaults and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may occur on stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Most of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied on for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Newhaven II CLO DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. PHOENIX PARK: Moody's Hikes Rating on EUR11.8MM E Notes to B1 ------------------------------------------------------------- Moody's Ratings has upgraded the ratings on the following notes issued by Phoenix Park CLO Designated Activity Company: EUR9,000,000 Class B-1 Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Aaa (sf); previously on Oct 14, 2024 Upgraded to Aa2 (sf) EUR15,000,000 Class B-2 Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Aaa (sf); previously on Oct 14, 2024 Upgraded to Aa2 (sf) EUR26,800,000 Class C Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to A1 (sf); previously on Oct 14, 2024 Upgraded to Baa2 (sf) EUR20,200,000 Class D Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Ba1 (sf); previously on Oct 14, 2024 Upgraded to Ba2 (sf) EUR11,800,000 Class E Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to B1 (sf); previously on Oct 14, 2024 Affirmed B3 (sf) Moody's have also affirmed the ratings on the following notes: EUR240,000,000 Class A-1A (Current outstanding amount EUR55,052,139) Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 14, 2024 Affirmed Aaa (sf) EUR7,000,000 Class A-1B Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 14, 2024 Affirmed Aaa (sf) EUR22,000,000 Class A-2A1 Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 14, 2024 Upgraded to Aaa (sf) EUR10,000,000 Class A-2A2 Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 14, 2024 Upgraded to Aaa (sf) EUR10,000,000 Class A-2B Senior Secured Fixed Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 14, 2024 Upgraded to Aaa (sf) Phoenix Park CLO Designated Activity Company, issued in July 2014 and last refinanced in October 2018, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Blackstone Ireland Limited. The transaction's reinvestment period ended in May 2023. RATINGS RATIONALE The rating upgrades on the Class B-1, B-2, C, D and E notes are primarily a result of the significant deleveraging of the senior notes following amortisation of the underlying portfolio since the last rating action in October 2024. The affirmations on the ratings on the Class A-1A, A-1B, A-2A1, A-2A2 and A-2B 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-1A notes have paid down by approximately EUR86.0 million (35.8%) since the last rating action in October 2024 and EUR184.9 million (77.1%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated April 2025 [1] the Class A, Class B, Class C and Class D OC ratios are reported at 178.0%, 150.8%, 128.8%, and 116.1% compared to September 2024 [2] levels of 154.8%, 137.4%, 122.1% and 112.7%, respectively. Moody's notes that the April 2025 principal payments are not reflected in the reported OC ratios. The deleveraging and OC improvements primarily resulted from high prepayment rates of leveraged loans in the underlying portfolio. Most of the prepaid proceeds have been applied to amortise the liabilities. All else held equal, such deleveraging is generally a positive credit driver for the CLO's rated liabilities. 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: EUR207.2 million Defaulted Securities: EUR4.3 million Diversity Score: 41 Weighted Average Rating Factor (WARF): 3131 Weighted Average Life (WAL): 3.1 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.6% Weighted Average Coupon (WAC): 3.0% Weighted Average Recovery Rate (WARR): 43.8% 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 account bank, using the methodology "Structured Finance Counterparty Risks" published in May 2025. 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. ST. PAUL'S VI: Moody's Hikes Rating on EUR12MM F-R Notes to B2 -------------------------------------------------------------- Moody's Ratings has upgraded the ratings on the following notes issued by St. Paul's CLO VI DAC: EUR27,500,000 Class B-1-R Senior Secured Floating Rate Notes due 2034, Upgraded to Aa1 (sf); previously on Mar 30, 2021 Definitive Rating Assigned Aa2 (sf) EUR12,500,000 Class B-2-R Senior Secured Fixed Rate Notes due 2034, Upgraded to Aa1 (sf); previously on Mar 30, 2021 Definitive Rating Assigned Aa2 (sf) EUR24,000,000 Class C-R Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to A1 (sf); previously on Mar 30, 2021 Definitive Rating Assigned A2 (sf) EUR27,000,000 Class D-R Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to Baa2 (sf); previously on Mar 30, 2021 Definitive Rating Assigned Baa3 (sf) EUR21,000,000 Class E-R Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to Ba2 (sf); previously on Mar 30, 2021 Definitive Rating Assigned Ba3 (sf) EUR12,000,000 Class F-R Senior Secured Deferrable Floating Rate Notes due 2034, Upgraded to B2 (sf); previously on Mar 30, 2021 Definitive Rating Assigned B3 (sf) Moody's have also affirmed the rating on the following notes: EUR248,000,000 Class A-R Senior Secured Floating Rate Notes due 2034, Affirmed Aaa (sf); previously on Mar 30, 2021 Definitive Rating Assigned Aaa (sf) St. Paul's CLO VI DAC, issued in June 2016 and refinanced in August 2018 and 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 Intermediate Capital Managers Limited. The transaction's reinvestment period will end on May 20, 2025. RATINGS RATIONALE The rating upgrades on the Class B-1-R, B-2-R, C-R, D-R, E-R and F-R notes are primarily a result of the benefit of the shorter period of time remaining before the end of the reinvestment period on May 20, 2025. The affirmation on the rating on the Class A-R notes is 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: EUR389.5m Defaulted Securities: EUR15.7m Diversity Score: 50 Weighted Average Rating Factor (WARF): 3016 Weighted Average Life (WAL): 4.63 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 4.17% Weighted Average Coupon (WAC): 6.16% Weighted Average Recovery Rate (WARR): 44.26% 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 "Structured Finance Counterparty Risks " published in May 2025. 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. -- Weighted average life: The notes' ratings are sensitive to the weighted average life assumption of the portfolio, which could lengthen as a result of the manager's decision to reinvest in new issue loans or other loans with longer maturities, or participate in amend-to-extend offerings. The effect on the ratings of extending the portfolio's weighted average life can be positive or negative depending on the notes' seniority. -- 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. ========= I T A L Y ========= ESSELUNGA SPA: Moody's Affirms Ba1 CFR, Alters Outlook to Negative ------------------------------------------------------------------ Moody's Ratings has affirmed the Ba1 the long term corporate family rating and the Ba1-PD probability of default rating of Esselunga S.p.A. ("Esselunga" or "the company"). Concurrently Moody's affirmed the Ba1 instrument rating on the EUR500 million senior unsecured bonds. The outlook was changed to negative from stable. The negative outlook reflects the company's underperformance relative to 2023 and to Moody's expectations. It also acknowledges the risk that profitability and cash flows may not improve over the next 12-18 months, and the company may not achieve the anticipated margin improvements (Moody's Adjusted EBITDA margin reaching 7%) and leverage reduction (Moody's adjusted debt to EBITDA ratio decreasing comfortably below 4.0x). In 2024, Moody's Adjusted EBITDA margin fell to 6.2% from 7.4% in 2023 due higher operating costs and intense competition leading Esselunga to continue investing in lower prices and promotions to retain market share. These factors, combined with one-off costs related to changes in the logistics operations, capital expenditures above Moody's expectations, and working capital outflows, led to EUR292 million in negative Moody's Adjusted free cash flows (FCFs) for the year, weakening the company's liquidity position. Negative FCF is expected to continue in 2025, primarily due to working capital outflows related to increased cash discounts from the closure of the four-year loyalty discount program. Governance considerations were also a key factor in this rating action. The negative outlook reflects more aggressive financial policies than in the past, particularly the EUR50 million dividend payment and the acquisition of real estate for future development in 2024, which contributed to the company's negative FCF. These actions increased leverage and weakened liquidity, all ahead of the company's planned refinancing of its capital structure. The affirmation of Esselunga's ratings reflects Moody's expectations that Esselunga will enhance its EBITDA margin through operating efficiencies and continued, albeit limited, store openings. Moody's anticipates the company will reduce its leverage and improve its profitability in the next 12 to 18 months. The affirmation also assumes that the company will maintain an adequate liquidity returning to generate positive free cash flow by 2026 and will successfully refinance its capital structure this year, well before its debt matures. RATINGS RATIONALE Esselunga's Ba1 CFR continues to reflect the product offering primarily made of food products, characterized by low cyclicality and low seasonality; its well-established position as Italy's (Government of Italy, Baa3 stable) fifth-largest grocery retailer and its regional market leadership; its exposure to some of the wealthiest parts of Italy; and Moody's expectations that the company's free cash flow (FCF) will turn positive from 2026. At the same time the rating is constrained by Esselunga's elevated leverage; its lack of international diversification, which results in its exposure to economic conditions in Italy; its modest size and high geographical concentration; and the intense competition, which continues to strain its margins. LIQUIDITY Esselunga's liquidity has deteriorated but remains adequate. As of December 31, 2024, the company had EUR188 million in cash and access to six revolving credit facilities (RCFs) of EUR100 million each. EUR300 million lines were fully drawn and mature in August 2026, while the other EUR300 million was fully available and matures in June 2027. The decline in liquidity is due to lower EBITDA, increased capital expenditures, and a EUR50 million dividend payment, leading to the use of the RCFs and around EUR110 million bank overdrafts as of December 2024. Despite this, the available cash and RCF should cover Esselunga's needs for 2025, even with ongoing working capital outflows. Moody's expects Esselunga to refinance its capital structure in 2025, securing a new RCF to maintain an adequate liquidity profile. STRUCTURAL CONSIDERATIONS Esselunga's capital structure includes both bank debt and senior unsecured bonds, and as a result, Moody's assumed a 50% family recovery rate, resulting in a PDR of Ba1-PD. The EUR500 million senior unsecured bonds are rated Ba1, in line with the CFR, as the vast majority of debt and other obligations are sitting at Esselunga's opco level, and the senior unsecured bonds rank pari passu. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure is unlikely in the next 12 to 18 months, as it would require significant improvement in operating performance combined with a more prudent and transparent financial policy. Quantitatively, that would require Moody's adjusted gross debt/ EBITDA to reduce sustainably below 3.0x, a track record of positive free cash flow generation while continuing its expansion capital expenditure and maintaining Retained Cash Flow/ Net Debt above 25%. A stabilization of the outlook would be subject to the refinancing of the capital structure and a sustained improvement in operating performance, profitability and cash flow generation. Downward pressure would occur if the company's profitability does not improve towards 7%, Moody's adjusted gross debt/EBITDA doesn't reduce comfortably below 4.0x, FCF remains negative, or Moody's-adjusted EBIT/interest expense remains below 3x. The rating could also be downgraded if there the company fails to address the upcoming refinancing in a timely fashion, resulting in a further weakening of the company's liquidity. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Retail and Apparel published in November 2023. Esselunga S.p.A. (Esselunga) is a leading food retailer in Italy. In 2024, the company reported revenue of EUR9.5 billion and EBITDA of EUR587 million. ===================== N E T H E R L A N D S ===================== VODAFONEZIGGO GROUP: Moody's Alters Outlook on B1 CFR to Negative ----------------------------------------------------------------- Moody's Ratings has affirmed the B1 long term corporate family rating and the B1-PD probability of default rating of VodafoneZiggo Group B.V. (VodafoneZiggo or the company). Concurrently, Moody's have affirmed the B1 instrument ratings on the senior secured notes issued by VZ Secured Financing B.V., the backed senior secured notes, senior secured bank credit facility and backed senior secured bank credit facilities issued by Ziggo B.V. and the senior secured bank credit facility issued by Ziggo Financing Partnership. Moody's have also affirmed the B2 instrument ratings on the senior unsecured notes issued at VZ Vendor Financing II B.V. and the B3 instrument ratings on the backed senior unsecured notes issued at Ziggo Bond Company B.V. The outlook on all entities has been changed to negative from stable. "The outlook change to negative largely reflects the updated guidance from the company, indicating a significant deterioration in operating performance through 2026 due to its new pricing strategy aimed at reducing churn and stabilizing its customer base" says Luigi Bucci, a Moody's Ratings Vice President and lead analyst for VodafoneZiggo. "Moody's forecast credit metrics to remain very weak for the current rating category over the next 12-18 months, including Moody's-adjusting leverage increasing to over 6x and reducing FCF generation" adds Mr Bucci. RATINGS RATIONALE The rating action is driven by the company's accelerated decline in operating performance due to its new strategic initiatives aimed at re-aligning VodafoneZiggo's broadband pricing levels to stabilize its customer base. While Moody's were previously expecting a slowdown in EBITDA in the low single-digit percentages over 2025, the decline will accelerate over the year to the mid-to-high single digits before a further deterioration in 2026. The company's management expects a broad stabilization in operating performance from 2027 due to the implementation of its strategic initiatives, which also include a reduction in costs and investments in its key brands. However, visibility on the potential success of those initiatives is limited. While Moody's understands the strategic rationale for re-aligning back-book and front-book prices in the broadband segment, the ultimate outcome and timing of these actions are uncertain and will largely depend on customer reaction and the potential competitive response. The strategic update provides, however, more clarity on VodafoneZiggo's future investment profile, as the company plans to gradually upgrade its cable network to DOCSIS 4.0 technology from 2025 while maintaining existing capital intensity. Moody's believes the upgrade will strengthen VodafoneZiggo's offering against full-fiber competition through increased broadband speeds. However, it remains uncertain to what extent it will support a stabilization in the customer base, as the market continues to largely focus on price and full fibre competition continues to expand its coverage. The company has not disclosed overall coverage targets and Moody's expects VodafoneZiggo to focus the upgrade on areas already covered by full fiber with higher churn risk. Moody's forecasts Moody's-adjusted leverage to increase to 6.1x in 2025 and 6.2x in 2026 from 5.9x in 2024 (or 5.6x pro forma for the debt repayment completed in January 2025). Moody's assumes leverage will peak in 2026 before a broad stabilization over 2027. Moody's also estimates Moody's-adjusted cash flow from operations (CFO)/debt to stand in the 10%-11% range over 2026-2027, down from 12.4% noted in 2024. Credit metrics will remain very weak for the B1 rating category, with an uncertain recovery trajectory. Moody's estimates do not factor in any impact from the contemplated sale of towers because of the overall uncertainty around the timing and terms of the transaction. As part of its new strategic initiatives, VodafoneZiggo aims to sell towers and other non-core assets to support deleveraging in the medium term. VodafoneZiggo's B1 CFR reflects the company's: (1) position as one of the leading telecom operators in the Netherlands; (2) reduced capex risk post announcement around DOCSIS 4.0 technology upgrade; (3) strong, although reducing, EBITDA margins; and (4) adequate liquidity profile, underpinned by a long-dated maturity profile and solid CFO. The rating remains constrained by: (1) the company's high Moody's-adjusted debt/EBITDA leverage of over 6x forecast for 2025/2026; (2) the continued pressure from full fibre competition as Koninklijke KPN N.V. and altnets continue to expand their coverage; (3) ongoing revenue and EBITDA weakness due to the new strategic initiatives as well as underlying competitive pressures; and (4) continued distributions to its shareholders Liberty Global Limited and Vodafone Group Plc (Vodafone, Baa2 stable) resulting in weak Moody's-adjusted free cash flow (FCF) generation post dividends. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS VodafoneZiggo's CIS-4 indicates that ESG considerations are material for the rating. This largely reflects the high governance risks stemming from the company's tolerance for leverage and shareholder distributions as well as its concentrated shareholding structure through the 50:50 joint venture between Liberty Global and Vodafone. Social risks mainly reflect the company's industrywide exposure to data privacy and security risk. LIQUIDITY VodafoneZiggo has an adequate liquidity profile, supported by EUR144 million of cash and cash equivalents as of March 31, 2025 and EUR800 million of undrawn revolving credit facilities available. While Moody's continues to assume that all the company's excess cash flow will be up-streamed to Liberty Global and Vodafone, Moody's also considers that positive FCF generation represents a buffer to support leverage reduction or liquidity. VodafoneZiggo's capital structure, excluding short-term vendor financing maturities, is long-dated with a broad concentration over 2028-2030. STRUCTURAL CONSIDERATIONS VodafoneZiggo's B1-PD probability of default rating (PDR) is at the same level as the CFR, reflecting the expected recovery rate of 50% that Moody's typically assumes for a capital structure that consists of a mix of bank debt and bonds. The B1 rating of the senior secured debt is in line with the company's B1 CFR. The senior secured debt benefits from the buffer provided by the vendor financing obligations and senior notes, which rank behind this debt. The B2 rating on the vendor financing notes reflects their junior position in the capital structure relative to the large amount of senior secured debt and the buffer provided by the senior notes, which are junior and rated B3, reflecting their deep structural subordination. Receivables under the vendor financing programme and the vendor financing facility are unsecured obligations of VZ Vendor Financing II B.V. and VodafoneZiggo Group B.V.. VZ Vendor Financing II B.V. is structurally subordinated to the obligors of the senior secured debt of VodafoneZiggo but is structurally senior to the obligors of the senior notes. RATIONALE FOR NEGATIVE OUTLOOK The negative outlook on VodafoneZiggo's ratings reflects Moody's expectations that the company's EBITDA will decline sharply over the next 12-18 months before an uncertain recovery trajectory. This is likely to lead to Moody's-adjusted leverage increasing to above 6x and Moody's-adjusted CFO/debt decreasing towards 10% over the same time frame. The outlook could be revised to stable following a stabilization in its key customer metrics that would lead us to expect a sustained improvement in leverage and FCF generation. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although unlikely over the next 12-18 months given the negative outlook, the ratings could be upgraded if VodafoneZiggo's: (1) operating performance improves significantly, leading to an acceleration in revenue and EBITDA growth; (2) Moody's-adjusted debt/EBITDA leverage falls below 5.0x on a sustained basis; and (3) cash flow generation improves, such that its Moody's-adjusted cash flow from operations (CFO)/debt increases to more than 15%. The ratings could be downgraded if VodafoneZiggo's: (1) customer base and customer attrition levels do not demonstrate signs of stabilization, leading to additional pressure on operating performance; (2) Moody's-adjusted debt/EBITDA fails to remain below 6.0x; and (3) Moody's-adjusted CFO/debt falls below 10% on a sustained basis. LIST OF AFFECTED RATINGS Issuer: VodafoneZiggo Group B.V. Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Probability of Default Rating, Affirmed B1-PD LT Corporate Family Rating, Affirmed B1 Issuer: VZ Secured Financing B.V. Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Senior Secured (Foreign Currency), Affirmed B1 Senior Secured (Local Currency), Affirmed B1 Issuer: VZ Vendor Financing II B.V. Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Senior Unsecured (Local Currency), Affirmed B2 Issuer: Ziggo B.V. Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 Backed Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 Backed Senior Secured (Foreign Currency), Affirmed B1 Backed Senior Secured (Local Currency), Affirmed B1 Issuer: Ziggo Bond Company B.V. Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Backed Senior Unsecured (Foreign Currency), Affirmed B3 Backed Senior Unsecured (Local Currency), Affirmed B3 Issuer: Ziggo Financing Partnership Outlook Actions: Outlook, Changed To Negative From Stable Affirmations: Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. COMPANY PROFILE VodafoneZiggo Group B.V. (VodafoneZiggo) is a Dutch telecommunications and network operator. The company generated revenue of EUR4,114 million and company-adjusted EBITDA of EUR1,880 million in 2024. VodafoneZiggo is a 50-50 joint venture owned by Liberty Global and Vodafone. =========== T U R K E Y =========== CIMKO CIMENTO: Fitch Assigns 'B+(EXP)' LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has assigned Cimko Cimento ve Beton San. ve Tic A.S. (Cimko) first-time expected Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDRs) of 'B+(EXP)'. The Outlook on both ratings is Stable. Fitch has also assigned its proposed USD400 million senior unsecured, five-year notes an expected 'B+(EXP)' rating, aligned with the LTFC IDR. The Recovery Rating on the senior unsecured debt is 'RR4'. Cimko is smaller and less geographically diversified than many Fitch-rated peers, and this constrains the ratings. It has healthy profitability margins and is well able to pass on costs to customers, but its new capital structure relies heavily on a single fixed-income instrument, reducing funding diversification and increasing foreign-exchange risks. The group's strong market position in ready-mix concrete and cement production in Turkiye support the ratings, and previous robust operating performance at its well-established cement and ready-mix concrete factories support expected free cash flow (FCF) generation. The final ratings are subject to the final documentation conforming to drafts reviewed by Fitch. Key Rating Drivers Limited Geographic Diversification: A concentration of Cimko revenue in Turkiye limits its operating environment assessment. A high concentration of domestic market sales (about 90% as of 2024) constrains the business profile, and Fitch expects this situation to remain in the medium term due to strong local market demand. Cimko is primarily exposed to the highly cyclical new-build construction end-markets, with a heavy presence in Turkiye's regions, which were hit by the earthquake in February 2023. Scale Constrains Business Profile: Cimko's business profile is sustainable, albeit weaker than most rated EMEA peers. In the fragmented Turkish cement market, Cimko is in the top five companies. It has a strong cost position in its domestic market, but remains relatively small and less geographically diversified than other larger Fitch-rated peers, and with a weaker EMEA market position despite it producing some speciality products, such as cement for the exploration and production (E&P) industry. Limited Visibility of Parent Group: Cimko is directly and indirectly fully owned by Sanko Holding A.S. Fitch has limited visibility on Sanko, but Fitch assumes its credit profile is weaker than that of Cimko. Cimko's debt financing is separate from its parent, and under the proposed bond documentation there are no cross-guarantees or cross-default provisions and with restricted payment definitions limiting future related party transactions. Insulating Proposed Covenants: Under the draft bond indentures, Cimko's cash flow has ring-fencing mechanisms, whereby a fixed-charge coverage covenant and net leverage covenant limit its ability to increase leverage; these also limit dividends paid to the parent. Fitch considers that Cimko's legal ring-fencing is 'insulated' under its Parent and Subsidiary Rating Linkage (PSL) Criteria, supporting a 'standalone' rating approach. Strong Profitability: Cimko's Fitch-adjusted EBITDA margin is high compared to some of its peers, at 27% in 2024, supported by ample orders from the Turkish construction industry. Fitch expects its EBITDA margins to be stable over the forecast period, as Cimko sustains a strong ready-mix market share in the earthquake-affected Turkish regions, enabling it to maintain moderate pricing power. Fitch expects Fitch-adjusted EBITDA margins to improve marginally throughout the forecast period due to Cimko's integration of Adana port and the expansion of solar power plants, reaching 30% by 2028. Adana Port Acquisition: Cimko acquired Adana port from within the Sanko group in October 2024, enhancing its export and import operations and marginally diversifying its income streams. Its US dollar revenues provide some natural hedge against foreign-exchange movements and supports supply-chain control. Nonetheless, revenue and EBITDA contribution remain limited compared to total revenue and EBITDA, with an expected average contribution in its rating-case forecast of less than 10% until 2027. Refinancing Leverage Neutral: Fitch expects the proposed bond to have a minor impact on leverage since Cimko intends to utilise the bulk of the proceeds to repay existing debt. It will use the remainder to pre-fund expansionary capex plans and a dividends distribution in 2025. Fitch-calculated EBITDA leverage was 2.7x at end-2024, and post refinancing, Fitch expects EBITDA leverage to gradually decline to less than 2.5x by end-2028 driven by higher EBITDA. The new capital structure, however, will rely heavily on a single fixed-income instrument, which reduces funding diversification and features FX and long-term refinancing risks. Positive FCF: Fitch expects the FCF margin will turn positive after 2025, as the company's expansionary capex plans and dividends are largely discretionary. However, the Turkish market faces substantial risks, including hyperinflation. Future cash flow and working capital management will depend on the group's continued ability to pass on rising costs in a timely manner. Peer Analysis Cimko's business profile is constrained by its small scale, similar to 'B' category peers such as Limak Cimento Sanayi Ve Ticaret Anonim Sirketi (B+/Stable). Cimko's revenue base is significantly smaller than larger rated peers, such as Holcim Ltd (BBB+/Stable), CRH plc (BBB+/Stable), and CEMEX, S.A.B. de C.V. (BBB-/Stable), which have stronger market positions and broader production networks. Cimko's operations are concentrated in the domestic market, unlike peers, such as Titan Cement International S.A. (BB+/Stable), which have diversified revenue streams in multiple countries including the US, Greece, and Turkey. Cimko has robust profit margins despite its limited size, supported by a strong cost position. Post-transaction, Cimko's financial structure will be broadly similar to Limak's, but less robust than that of CRH and Holcim. Cimko has less financial flexibility due to tight liquidity with no access to committed credit facilities, and it has large foreign-exchange exposure. Key Assumptions Revenue is expected to increase by an average of 14% annually in Turkish lira from 2025-2028, reflecting higher sales volumes Improving EBITDA margin to 30% by end-2028, reflecting ramp-up of solar plants and port operations Capex broadly in line with the management forecasts at about 7% of revenue Fitch-assumed dividends, well within covenant levels leaving FCF moderately positive post-2025 No M&As Successful USD400 million bond issuance Repayment of senior secured debt with a remaining balance of just USD12 million Recovery Analysis The recovery analysis assumes that Cimko would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. - An administrative claim of 10% is used in line with the industry median and peer group. - The recovery analysis is translated into US dollars from Turkish lira (using its year-end exchange rate for 2024) since the majority of the capital structure is in US dollars. - Fitch assumes a GC EBITDA of USD140 million. This reflects a post-reorganisation EBITDA in Turkiye's challenging market environment and high inflation, leading to declining demand and lower-than-expected sold volumes. - An enterprise value (EV) multiple of 4.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganisation EV, given Cimko's strong market position in Turkiye and strong cost position. However, this multiple is constrained by lack of geographical diversification, as production and revenue are concentrated in Turkiye. - The waterfall analysis is based on the new pro forma capital structure, which consists of secured project loans at Cimko's solar plants, which are expected to be about USD12 million after refinancing, senior unsecured USD400 million Eurobond and other bank credit facilities of USD150 million. - These assumptions result in a recovery rate for the senior unsecured instrument within the 'RR3' range, but Turkiye's group D recovery cap constrains this to 'RR4', corresponding to the group's LTFC IDR at 'B+'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A deterioration in Turkiye's economic environment and general market conditions leading to EBITDA gross leverage above 3.5x on a sustained basis - Neutral FCF generation - Lack of ring-fencing (e.g. cash extraction leading to higher leverage) and tighter links with parent Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Improved geographical market diversification - EBITDA gross leverage below 2.5x on a sustained basis, supported by a consistent financial policy - Sustainable FCF margins of at least 5% Liquidity and Debt Structure Fitch views Cimko's liquidity post-refinancing as adequate. Fitch expects total debt to reach about USD500 million (equivalent) by end-2025, following the refinancing of USD295 million of existing debt balances and additional outstanding debt repayment. Following refinancing, Fitch expects the debt composition to be almost entirely US dollar-denominated (about 97%), with long-term debt comprising the majority of the debt structure, with an extended debt maturity profile. Issuer Profile Established in 1995, Cimko is one of the largest cement producers in Turkiye. The company's product portfolio includes clinker, various cement types such as grey, oil-well, and low-alkali cement, as well as ready-mix concrete. Cimko has three cement plants, two packaging plants, more than 40 ready-mix concrete plants, four aggregate plants, and one grinding plant. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- Cimko Cimento ve Beton San. ve Tic A.S. LT IDR B+(EXP) Expected Rating LC LT IDR B+(EXP) Expected Rating senior unsecured LT B+(EXP) Expected Rating RR4 =========================== U N I T E D K I N G D O M =========================== AGGREKO HOLDINGS: Moody's Rates New Senior Secured Notes 'B1' ------------------------------------------------------------- Moody's Ratings has assigned a B1 rating to the proposed backed senior secured notes due 2030 launched by Aggreko Holdings Inc. and Albion Financing 1 S.a.r.l. Concurrently, Moody's have affirmed the B1 long term corporate family rating and the B1-PD probability of default rating of Albion HoldCo Limited (Aggreko), as well as the B1 ratings of the senior secured bank credit facility due 2026 provided by Albion Midco Limited and the existing senior secured term loans due 2029 issued by Albion Financing 3 S.a.r.l. The outlook on all entities is stable. This rating action follows Aggreko's announcement of the refinancing of its equivalent $1,035 million of backed senior secured notes issued by Albion Financing 1 S.a.r.l. and $450 million of backed senior unsecured notes issued by Albion Financing 2 S.a.r.l. with the proceeds of the proposed backed senior secured notes issuance. RATINGS RATIONALE The rating action reflects Aggreko's sustained strong performance, and expectations of continued robust growth underpinned by rising global demand for power. The affirmation also incorporates the company's planned significant capital investment programme, which is needed to fuel its rapid growth trajectory, but will also result in negative free cash flow (FCF). In addition, the company's planned refinancing transaction, which will extend its debt maturities from 2026 to 2030, is a supportive factor in the rating action. Aggreko grew revenue by 13.9% and generated a 36.6% EBITDA margin (Moody's-adjusted) in 2024 as a result of the strong underlying demand trends and the company's focus around contract profitability and cost control. Positively, Aggreko experienced growth across all its operating regions except for Africa which the company has been strategically exiting. Aggreko benefits from favourable demand trends for mobile energy solutions. This demand stems from the anticipated rise in overall electricity consumption, driven by the decarbonisation of industries and the growing power needs of new sectors, such as data centres. Despite plans to expand capacity, a significant generation shortfall is expected in the coming years, exacerbated by the lengthy timelines required for new transmission deployments and grid connections. The increasing share of renewables in the grid introduces supply intermittency, and with long-term energy storage solutions not yet viable, there is a heightened need for temporary and semi-permanent power solutions. To support the expected rapid growth, Aggreko anticipates a very material capital investment programme that will turn its free cash flow negative. Still, Moody's notes that the majority of the planned capital expenditure is focused on growth, and maintenance comprises no more than $325 million per year. Also, Aggreko's capital investments are granular, which reduces investment risk, and can be paused if business conditions warrant, as was the case during the pandemic. Aggreko's planned refinancing transaction, which will extend its debt maturities to 2030 from 2026, will leave the firm with longer debt maturity runway with the nearest term loans coming due in 2029. The company has also indicated it will fund a dividend distribution of $323 million to ordinary shareholders and repay $177 million of preference shares. Although the company currently has cushion for this distribution and repayment in its rating, Moody's views this transaction as aggressive particularly in the absence of a publicly stated financial policy for Aggreko. Aggreko benefits from moderate leverage, which is projected to be 5.1x pro forma in 2024, decreasing to 4.4x in 2025 and further to 4.0x by 2026. This deleveraging trend reflects ample opportunities for profitable growth available to Aggreko. Additionally, the company's coverage ratios are also expected to improve over the same period,. From a weakly positioned coverage of 2.1x pro forma in 2024, Moody's anticipates an increase to 2.7x in 2025 and 3.3x by 2026. These improving metrics reflect Aggreko's ability to generate sufficient earnings to cover its interest obligations, thereby enhancing its financial resilience. Moody's expects Aggreko to consume over $1 billion of cash in 2025 and close to $0.5 billion in each of 2026 and 2027, as the company implements its ambitious investment programme. Aggreko's B1 corporate family rating (CFR) reflects its strong leadership in mobile modular power, temperature control, and energy services, with promising growth prospects. Aggreko benefits from a large fleet of power generators and temperature control equipment, often used in remote locations with no alternative energy sources. The company is well-diversified across sectors, customers, and geographies, although some markets, like oil and gas, are cyclical. Despite significant planned capital spending leading to negative Moody's-adjusted free cash flow, much of this expenditure is discretionary and aimed at maintaining and expanding the fleet, as well as reducing its carbon emissions. Aggreko also has some exposure to the commodity pricing cycles through its customers in sectors like petrochemicals and refining. The company's proposed shareholder distributions also point toward risks associated with its financial policy. ESG CONSIDERATIONS Moody's views governance as a key risk for Aggreko. Although the company's strong profitability helps it to maintain moderate leverage, the shareholders' decision to draw the dividend and repay preferred stock points to a measure of risk appetite. LIQUIDITY Aggreko's liquidity is adequate. The company had over $500 million of cash at year-end 2024 and an undrawn GBP300 million senior secured revolving credit facility, which Moody's understands the company is in the process of extending to Feb 2029 and increasing in size to $1.195bn. Its first debt maturity falls in 2029. However, Aggreko's material capital expenditure will make the company's cash flow negative. Moody's anticipates that Aggreko may need to raise additional funds to finance its capex requirements as the company has done on a number of occasions in recent years. STRUCTURAL CONSIDERATIONS Aggreko announced the issuance of backed senior secured notes due 2030 which will rank pari passu with its existing backed senior secured debt and share in the collateral. The company's existing backed senior secured notes and backed senior unsecured notes are expected to be repaid with the proceeds of the issuance. Following this refinancing transaction all of Aggreko's debt will be senior secured, pari passu and rated at the same level as its CFR. RATING OUTLOOK The stable outlook reflects Moody's expectations that Aggreko will maintain its profitable expansion, which Moody's expects to result in moderately lower leverage, despite capex-driven free cash flow burn. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating momentum would result from Aggreko's leverage measured as debt/EBITDA reducing closer to 3.5x including Moody's standard adjustments, as well as EBITDA/Interest expense approaching 4.5x. Good liquidity would also be needed for an upgrade. Also, Aggreko would need to elucidate a clear financial policy consistent with other Ba-rated peers. Downward rating pressure could arise if Aggreko's debt/EBITDA increases above 5.0x or EBITDA/Interest expense remains below 3.0x for a sustained period of time. Any liquidity challenges could also lead to a rating downgrade. Furthermore, continued negative free cash flow could pressure the rating if the company's double digit revenue growth slows down or if its EBITDA margins reduce from the current levels of over 35%. LIST OF AFECTED RATINGS Issuer: Aggreko Holdings Inc. Outlook Actions: Outlook, Assigned Stable Assignments: Backed Senior Secured (Local Currency), Assigned B1 Issuer: Albion Financing 1 S.à.r.l. Outlook Actions: Outlook, Remains Stable Assignments: Backed Senior Secured (Local Currency), Assigned B1 Affirmations: Backed Senior Secured (Foreign Currency), Affirmed B1 Backed Senior Secured (Local Currency), Affirmed B1 Issuer: Albion Financing 2 S.à.r.l. Outlook Actions: Outlook, Remains Stable Affirmations: Backed Senior Unsecured (Foreign Currency), Affirmed B3 Issuer: Albion Financing 3 S.à.r.l. Outlook Actions: Outlook, Remains Stable Affirmations: Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 Senior Secured Bank Credit Facility (Foreign Currency), Affirmed B1 Issuer: Albion HoldCo Limited Outlook Actions: Outlook, Remains Stable Affirmations: Probability of Default Rating, Affirmed B1-PD LT Corporate Family Rating, Affirmed B1 Issuer: Albion Midco Limited Outlook Actions: Outlook, Remains Stable Affirmations: Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 The principal methodology used in these ratings was Equipment and Transportation Rental published in December 2024. COMPANY PROFILE Headquartered in Glasgow, Albion HoldCo Limited (Aggreko) is a leading global provider of modular power generation and temperature control equipment, offering critical equipment rental and energy services to a diverse mix of end-markets, clients and countries. The company operates across more than 150 locations in 67 countries. In 2024, Aggreko generated revenue of $2.9 billion and EBITDA of $1.1 billion. Following an LBO in 2021, Aggreko is co-owned by two private equity firms, I Squared Advisors LLC, a specialty infrastructure fund, and TDR Capital LLC. BAR 2064: Carter Clark Named as Administrators ---------------------------------------------- Bar 2064 Limited was placed into administration proceedings in the High Court of Justice Court Number: CR-2025-003230, and Jenny Poleykett and Alan Clark of Carter Clark, Recovery House, were appointed as administrators on May 12, 2025. Bar 2064 is a supplier of construction/sub-contractors. Its registered office is at Westpoint Peterborough Business Park, Lynchwood, Peterborough, PE2 6FZ Its principal trading address is at Iveco House, Station Road, Watford, WD17 1ET The joint administrators can be reached at: Jenny Poleykett Alan Clark Carter Clark Recovery House, 15-17 Roebuck Road Hainault Business Park Ilford Essex, IG6 3TU Further details contact: Carter Clark Email: lisa.portway@carterclark.co.uk BEWLEY STREET: Mercer & Hole Named as Administrators ---------------------------------------------------- Bewley Street Sw19 (Trio) Ltd was placed into administration proceedings in the High Court of Justice Business and Property Courts of England and Wales, Insolvency & Companies List (ChD) Court Number: CR-2025-003210, and Henry Nicholas Page and Dominic Dumville of Mercer & Hole were appointed as administrators on May 9, 2025. Bewley Street specialized in buying and selling of own real estate. Its registered office and principal trading address is at 205 Lavender Hill, London, SW11 5TB. The administrators can be reached at: Henry Nicholas Page Dominic Dumville Mercer & Hole, 21 Lombard Street London, EC3V 9AH For further information, contact: Henry Nicholas Page Dominic Paul Dumville Mercer & Hole, 21 Lombard Street London, EC3V 9AH or the case administrator Dominic Wright Email: dominic.wright@mercerhole.co.uk Tel No: 020 7236 2601 DEUCE MIDCO: Fitch Affirms 'B' LT IDR, Alters Outlook to Positive ----------------------------------------------------------------- Fitch Ratings has revised the Outlook on Deuce Midco Limited's (David Lloyd Leisure, DLL) Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'B'. Fitch has also affirmed the senior secured debt rating at 'B+' with a Recovery Rating of 'RR3'. The Outlook revision reflects ongoing strong membership and yield growth since its last review, leading to a material EBITDA increase and stronger deleveraging prospects, with EBITDAR leverage expected to decline below 6.0x from 2026. The business is organically cash-generative, and its forecast captures free cash flow (FCF) turning mildly positive in 2026 and remaining so in future years, despite high growth capex to support new site openings and premiumisation. Key Rating Drivers Continued Solid Growth: Fitch expects on average around 5% revenue growth a year in 2025-2027, supported by price increases, new club openings using internally generated cash, and a focus on premium membership (premiumisation). DLL's wealthy client base is less sensitive to price increases, as demonstrated in the past two years, and its 4.5% average price increase in January 2025 will have a limited impact on membership numbers overall. Fitch anticipates that the ongoing shift to premium membership categories (with around 30% of sites to be converted) will continue increasing the average yield per member. Fitch also expects a slight increase in ancillary revenues from personal training and food and beverage. Profit Expansion: Fitch has increased its 2025 EBITDA forecast to around GBP255million. This is a GBP28million annual improvement due to yield increase and easing cost pressures, particularly related to hedged energy costs. Fitch believes that cost inflation is adequately managed through price increases. Fitch expects the EBITDA margin to improve further in 2025 to around 28%, driven by maturing clubs, higher yield, as well as normalising cost inflation. This will be partially offset by margin dilution from some less profitable European clubs. Fitch has used cash rent to calculate EBITDA, guided by its new lease criteria, which is GBP20 million lower than the IFRS16 accounting rent in 2024. Improved Credit Metrics: Fitch projects EBITDAR leverage at around 6.0x in 2025 before decreasing to around 5.8x in 2026, as EBITDA improves on higher yield from premiumisation and cost pressures continue to ease. Fitch expects EBITDAR fixed charge coverage to improve toward 2.3x in 2025 and to decrease slightly to 2.2x in 2026 when DLL is likely to refinance its senior secured debt at a higher rate. Both metrics are driven by a stronger yield, supporting positive credit momentum. Improving FCF Generation: Its rating case forecasts slightly negative FCF in 2025 and mildly positive FCF from 2026. This incorporates annual capex of around 20% of revenue for the next three years, including expansion and pipeline capex. Fitch believes DLL is likely to continue to focus on premiumisation to deliver yield and differentiate itself from the market. Fitch continues to see moderate execution risk in converting existing members to more premium categories, despite positive trends so far. Revenue-accretive, cash-funded capex should aid further deleveraging once additional profits are captured, but it reduces immediate financial flexibility. Positive Underlying Cash Generation: The Outlook revision reflects its expectations of sustained profitable growth with EBITDA and margin expansion leading to stronger underlying organic cash generation and increasing scope for self-funded growth. At the same time, given the company's strategy of full reinvestment of internal cash into future earnings, Fitch estimates that FCF margins after expansion and pipeline capex will not improve above low-single digit levels. Solid Operations: Fitch views DLL as a strong business, benefiting from a growing health and fitness sector and a loyal affluent membership base that is less sensitive to economic pressures. Its premium lifestyle offering sets DLL apart from the traditional gym format, resulting in less direct competition and lower attrition rates. Subscription income (around 80% of sales) is complemented mainly by food and beverage and personal-training revenue streams. Peer Analysis DLL's IDR reflects the company's niche leading position with an affluent membership base that is less sensitive to economic pressures. Its closest Fitch-rated peer is Pinnacle Bidco plc (Pure Gym; B-/Stable), one of the leading gym and fitness operators in Europe with a value/low-cost business model, even though the companies have very different business models. Pure Gym faces more rigorous price competition in a more crowded market, while DLL's members are less price sensitive. Pure Gym is smaller by revenue but has a geographically more diversified portfolio following its acquisitions of Fitness World and Blink Fitness in recent years, while DLL is increasing its geographic coverage. The gym market is polarised and both companies have been winning market share from their mid-market peers. Due to its low-cost business model, Pure Gym has mildly higher profitability than DLL with an EBITDAR margin trending towards 41% versus around 40% at DLL over the next four years. Pure Gym has a more aggressive expansion strategy, resulting in weaker expected FCF generation and fixed charge coverage, with broadly similar leverage metrics. Fitch projects DLL's EBITDAR leverage at 6.0x in 2025 with the potential to trend slightly lower, although it will depend on management's appetite for growth. Key Assumptions - Membership levels to slightly increase during 2025, driven by new site openings and maturation of new clubs balanced by attrition following price increase and during transformation projects - Four new site additions in 2025 and four new site additions per year between 2026 and 2028 - Average members per site grew by around 2% in 2025 and remaining flat between 2026 and 2028, driven by dynamics around attrition due to price increases and new and still maturing clubs - Average yield of GBP79 per member in 2025, up 6% on 2024, as expected price increases and premiumisation help offset higher costs, followed by a slower 2-3% rise in 2026-2028 - Ancillary sales improving to around GBP165 million in 2025 and rising around 2% annually in 2026-2028 - EBITDA margin around 27.8% in 2025, improving gradually toward 29% in 2028, driven by easing cost inflation and higher average yield - Capex in 2025 at GBP200 million primarily to fund new club openings, premiumisation of existing sites and maintenance, followed by around GBP190 million per year in 2026-2028 - M&A of around GBP10 million per year from 2025 onwards, reflecting on one to two European club additions per year - No dividends Recovery Analysis Fitch's Key Assumptions on Recovery Ratings: The recovery analysis assumes that DLL would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. DLL's GC EBITDA of GBP118 million estimate (increased by GBP5million to incorporate recent new site openings) reflects Fitch's view of a sustainable, post-reorganisation EBITDA level, on which Fitch bases the enterprise valuation (EV). Fitch has applied a 6x EV/EBITDA multiple to the GC EBITDA to calculate a post-reorganisation EV. The multiple, which is 0.5x higher than for Pure Gym, reflects a well-invested premium estate (long leases mainly), an established brand name and lower attrition rate of members than budget fitness operators, positive underlying FCF generation over the rating horizon and reasonable performance through past recessions when the estate was less well-invested. Its approximately GBP900 million-equivalent senior secured notes rank behind an GBP125 million super senior revolving credit facility (RCF), which Fitch assumes to be fully drawn, but ahead of its GBP250 million payment-in kind instrument raised outside the restricted group, which Fitch treats as equity. Its waterfall analysis generates a ranked recovery for the senior secured notes in the 'RR3' band, indicating a 'B+' instrument rating, one notch up from the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Weaker profitability amid lower yields, higher attrition or larger cost pressures, or higher cash outflows than incorporated in Fitch's forecast leading to: - Total lease-adjusted debt/operating EBITDAR, remaining sustainably above 7.0x; - Operating EBITDAR / interest plus rents, sustainably below 1.5x; and - FCF margin remaining neutral to negative. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Evidence of sustained profitable growth, leading to continued EBITDA and EBITDA margin expansion; - Consistent financial policy with visibility of no releveraging or shareholder actions, including dividend distributions or new debt issuance; - EBITDAR leverage below 6.0x on a sustained basis, suggesting a more robust underlying performance than expected, or a more conservative financial policy; - Operating EBITDAR fixed-charge coverage, sustainably above 2.0x; or - Consistently positive FCF despite its expectation of continuously high capex investment to support business expansion. Liquidity and Debt Structure Available liquidity was around GBP132.7 million at end-2024, comprising GBP8.7 million of reported cash on balance sheet and GBP125 million available under the committed RCF. DLL's internal cash generation and proceeds from sale and leaseback should be sufficient to fund its expansion. Fitch expects the RCF to remain largely undrawn during its forecast horizon. Fitch expects broadly neutral cash outflow in 2025 as DLL continues with the premiumisation of more clubs and opens five new ones. DLL's RCF matures in 2026 and the senior secured notes mature in 2027. Fitch views refinancing risk as manageable. Issuer Profile DLL is a premium lifestyle club operator in the UK, with an expanding presence in Europe. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Deuce Midco Limited LT IDR B Affirmed B Deuce FinCo plc senior secured LT B+ Affirmed RR3 B+ KANDOR CLOTHING: Harrisons Business Named as Administrators ----------------------------------------------------------- Kandor Clothing Company Ltd was placed into administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Insolvency and Companies List (ChD) No CR-2025-MAN-000617, and Anthony Murphy of Harrisons Business Recovery & Insolvency (London) Limited was appointed as administrators on May 2, 2025. Kandor Clothing engaged in the retail sale of clothing in specialised stores. Its registered office is at Bartle House, 9 Oxford Court, Manchester, England, M2 3WQ. Its principal trading address is at Pemberton Business centre, Enterprise House, Richmond Hill, Wigan WN5 8AA. The joint administrators can be reached at: Anthony Murphy Harrisons Business Recovery & Insolvency (London) Limited Westgate House, 9 Holborn, London EC1N 2LL Optional alternative contact name: Jose Casal Email: London@harrisonsuk.com NEW PERSPECTIVE: MHA Named as Administrators -------------------------------------------- New Perspective Digital Print Ltd was placed into administration proceedings in the High Court of Justice Court Number: CR-2025-001991, and Georgina Marie Eason and James Alexander Snowdon of MHA were appointed as administrators on May 6, 2025. New Perspective engaged in printing. Its registered office and principal trading address is at Unit 3 Joseph Wilson Ind Estate, Millstrood Road, Whitstable, CT5 3PS The joint administrators can be reached at: Georgina Marie Eason James Alexander Snowdon MHA 6th Floor, 2 London Wall Place London, EC2Y 5AU For further details contact: Sam Robinson Email: Sam.Robinson@mha.co.uk Tel No: 0207 429 4100 Alternative contact: Daniel Cowie QUICK REACH: Alvarez & Marsal Named as Administrators ----------------------------------------------------- Quick Reach Powered Access Ltd was placed into administration proceedings in the High Court of Justice Business & Property Courts in Manchester, Insolvency & Companies List (ChD) No CR-2025-MAN-000651, and Gemma Quinn and Michael Magnay of Alvarez & Marsal Europe LLP were appointed as administrators on May 8, 2025. Quick Reach specialized in renting and leasing of construction and civil engineering machinery and equipment. Its registered office and principal trading address is at Unit2d James Nasmyth Way, Green Lane, Eccles, Manchester, M30 0SF. The joint administrators can be reached at: Michael Magnay Gemma Quinn Alvarez & Marsal Europe LLP Suite 3 Regency House, 91 Western Road Brighton, BN1 2NW Tel No: +44 (0) 20 7715 5200 For further information, contact: Daniel Cudlip Alvarez & Marsal Europe LLP Tel No: +44 (0)20 7715 5200 Email: INS_SOUTBL@alvarezandmarsal.com. =============== X X X X X X X X =============== [] BOOK REVIEW: The Titans of Takeover -------------------------------------- Author: Robert Slater Publisher: Beard Books Softcover: 252 pages List Price: $34.95 Order your personal copy at http://www.beardbooks.com/beardbooks/the_titans_of_takeover.html Once upon a time -- and for a very long while -- corporate behemoths decided for themselves when and if they would merge. No doubt such decisions were reached the civilized way, in a proper men's club with plenty of good brandy and better cigars. Like giants, they strode Wall Street, fearing no one save the odd trust-busting politico, mutton-chopped at the turn of the twentieth century, perhaps mustachioed in the 1960s when the word was no longer trust but monopoly. Then came the decade of the 1980s. Enter the corporate raiders, men with cash in hand, shrewd business sense, and not a shred of reverence for the Way Things Have Always Been Done. These businesspeople -- T. Boone Pickens, Carl Icahn, Saul Steinberg, Ted Turner -- saw what others missed: that many of the corporate giants were anomalies, possessed of assets well worth possessing yet with stock market performances so unimpressive that they could be had for bargain prices. When the corporate raiders needed expert help, enter the investment bankers (Joseph Perella and Bruce Wasserstein) and the M&A attorneys (Joseph Flom and Martin Lipton). And when the merger went through, enter the arbitragers who took advantage of stock run-ups, people like Ivan "Greed is Good" Boesky. The takeover frenzy of the 1980s looked like a game of Monopoly come to life, where billion-dollar companies seemed to change ownership as quickly as Boardwalk or Park Place on a sweet roll of dice. By mid-decade, every industry had been affected: in 1985, 3,000 transactions took place, worth a record-breaking $200 billion. The players caught the fancy of the media and began showing up in the news until their faces were almost as familiar to the public as the postman's. As a result, Jane and John Q. Citizen's in Wall Street began its climb from near zero to the peak where (for different reasons) it is today. What caused this avalanche of activity? Three words: President Ronald Reagan. Perhaps his most firmly held conviction was that Big Business was Being shackled by the antitrust laws, deprived a fair fight against foreign competitors that has no equivalent of the Clayton Act in their homelands. Reagan took office on Jan. 20, 1981, and it wasn't long after that that his Attorney General, William French Smith, trotted before the D.C. Bar to opine that, "Bigness does not necessarily mean badness. Efficient firms should not be hobbled under the guise of antitrust enforcement." (This new approach may have been a necessary corrective to the over-zealousness of earlier years, exemplified by the Supreme Court's 1966 decision upholding an enforcement action against the merger of two supermarket chains because the Court felt their combined share of 8% (yes, that's "eight percent") of the Los Angeles market was potentially anticompetitive.) Raiders, investment bankers, lawyers, and arbitragers, plus the fun couple Bill Agee and Mary Cunningham --remember them? -- are the personalities Profiled in Robert Slater's book, originally published in 1987, Slater is a wonderful writer, and he's given us a book no less readable for being absolutely stuffed with facts, many of them based on exclusive behind-the-scenes interviews. About The Author Robert Slater (1943-2014) was an American author and journalist. He was known for over two dozen books, including biographies of political and business figures like Golda Meir, Yitzhak Rabin, George Soros, and Donald Trump. Slater graduated with honors from the University of Pennsylvania in 1966, with a degree in political science. He received a master's degree in international relations from the London School of Economics in 1967. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *