250523.mbx

250523.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 23, 2025, Vol. 26, No. 103 Headlines F R A N C E ALTICE FRANCE: S&P Cuts ICR to 'D' on Missed Debt Interest Payment ALVEST INVESTMENT: S&P Assigns 'B' LongTerm Issuer Credit Rating BERTRAND FRANCHISE: S&P Downgrades LT ICR to 'B-' on Deviation FINANCIERE N: S&P Withdraws 'B-' ICR Following Debt Repayment OPAL BIDCO: Fitch Corrects May 15 Ratings Release VEOLIA ENVIRONNEMENT: S&P Rates Junior Subordinated Hybrid 'BB+' I R E L A N D INDIGO CREDIT III: Fitch Assigns 'B-(EXP)sf' Rating on Cl. F Notes RRE 26: S&P Assigns Prelim. BB-(sf) Rating on Class D Notes SALUS (NO. 33): S&P Lowers Class D Notes Rating to 'B(sf)' TRINITAS EURO CLO IX: S&P Assigns B-(sf) Rating on Class F Notes I T A L Y PRO-GEST SPA: S&P Suspends 'SD' LongTerm Issuer Credit Rating TELECOM ITALIA: Fitch Alters Outlook on 'BB' LongTerm IDR to Pos. X3G MERGECO: Fitch Assigns BB-(EXP) LongTerm IDR, Outlook Negative X3G MERGECO: S&P Assigns Preliminary 'B+' LT ICR, Outlook Stable L U X E M B O U R G ALTISOURCE PORTFOLIO: Deer Park, 5 Others Hold 13.5% Stake AURORA 2024 SARL: S&P Assigns 'B' LongTerm ICR, Outlook Stable EP BCO: S&P Puts 'BB-' LongTerm ICR on Watch Negative N E T H E R L A N D S SUEDZUCKER INT'L: S&P Rates New EUR700MM Sub. Hybrid Notes 'BB' TRIVIUM PACKAGING: S&P Rates New Senior Secured Notes 'B' S P A I N PRISA: S&P Affirms 'B-' LongTerm ICR on Concluded Refinancing VALENCIA: S&P Affirms 'BB/B' ICR & Alters Outlook to Stable S W I T Z E R L A N D AVOLTA AG: S&P Rates New EUR500MM Senior Unsecured Notes 'BB+' GATEGROUP HOLDING: S&P Puts 'B-' ICR on CreditWatch Positive SELECTA GROUP: S&P Cuts Second-Lien Credit Facility Rating to 'D' U N I T E D K I N G D O M CAMELOT UK: S&P Rates Proposed $500MM First-Lien Add-On 'BB-' CASTELL 2025-1: DBRS Gives Prov. B Rating on Class F Notes CONTROL SOLUTIONS: Redman Nichols Named as Administrators ENDEAVOUR MINING: Fitch Rates New USD500MM Unsec. Notes 'BB(EXP)' ENDEAVOUR MINING: S&P Rates New $500MM Senior Unsecured Notes 'BB-' GREENSWARD SPORTS: Quantuma Advisory Named as Administrators HYPERION TECHNOLOGIES: Menzies LLP Named as Administrators LANE BRITTON: SPK Financial Named as Administrators ONQOR GROUP: SPK Financial Named as Administrators OXFORD CANNABINOID: Rushtons Insolvency Named as Administrators RISKALLIANCE DIRECT: Parker Andrews Named as Administrators SALEEM VENTURES: FRP Advisory Named as Administrators UPMARKET LEISURE: Begbies Traynor Named as Administrators VICTORIA PLC: S&P Cuts ICR to 'CCC+' on Increasing Refinancing Risk - - - - - =========== F R A N C E =========== ALTICE FRANCE: S&P Cuts ICR to 'D' on Missed Debt Interest Payment ------------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on Altice France Holding S.A. (AFH) and issue-level rating on its unsecured debt to 'D' from 'CC' and 'C', respectively. At the same time, S&P affirmed its 'CC' long-term issuer credit rating on AF and 'CC' issue-level rating on its senior secured debt. S&P expects to maintain its 'D' rating on AFH until the final implementation of the restructuring plan, at which point S&P will review the rating to incorporate the group's forward-looking credit profile. S&P said, "The negative outlook on AF indicates that we will lower our issuer credit rating to 'D' or 'SD' (selective default) and our issue-level rating on its senior secured debt to 'D' (default) when it enters accelerated safeguard proceedings because the procedure will trigger the automatic stay provisions under the associated financial debt instruments. We could also take the same action as of the close of the proposed transaction if the restructuring is implemented with its lenders' consensus. Following the restructuring implementation, we will review our ratings, as well as the group's new capital structure and liquidity position. "Creditors representing at least 90% of AFH debt have agreed to its proposed restructuring transaction--offering a cash payment, debt-to-equity swap, and new debt instruments with higher coupons and extended maturity dates--which we view as a distressed exchange and tantamount to a default under our criteria. "The restructuring proposal stipulates that AFH will stop paying the interest due under its unsecured debt as of April 1, 2025, and we note it effectively missed its May 15 interest payment, which we consider tantamount to a default. "In parallel, creditors representing at least 90% of Altice France S.A.'s (AF) notes and terms loans have agreed to the proposed restructuring. The company announced the opening of conciliation proceedings on March 28. We understand that until it enters accelerated safeguard proceedings, AF will remain current on its debt obligations." On March 17, 2025, AFH and AF announced they had sufficient support from their senior secured and unsecured creditors to implement the proposed refinancing transaction. S&P said, "We view the proposed transaction as distressed because the cash payment, debt-to-equity swap, and maturity extension fall short of the original promises the company made to its lenders. We also view the cash premium paid to its lenders, along with the equity stakes and higher margin and coupons, as not adequately compensating them for the term changes." Excluding the equity interest, the senior secured lenders will receive a total consideration of 84.61% of the original value (87.11% when including the 2.5% premium to be paid to lenders signing onto the deal prior to March 19, 2025); whereas the senior unsecured lenders will receive 22.50% of the original value (25% including the 2.5% premium). As of March 17, 2025, creditors representing at least 90% of AFH's unsecured notes have agreed to the proposed transaction, which will be implemented on an out-of-court basis without judicial proceedings. On the same day, creditors representing at least 90% of AF's senior secured notes and loans agreed to the proposed transaction and are now under conciliation proceedings in France. S&P said, "As part of the restructuring, AFH did not make the May 15 interest payment due under the unsecured debt and we don't think it intends to make any interest payments during the grace period, which we consider tantamount to a default. Therefore, we lowered our long-term issuer credit rating on AFH and our issue-level rating on its unsecured debt. We expect to maintain the 'D' rating until the final implementation of the restructuring plan, at which point we will review the rating to incorporate the group's forward-looking credit profile. "We understand AF remains current on its debt obligations. AFH and its subsidiary AF are separate issuers, with AFH borrowing the unsecured debt and AF borrowing the senior secured debt. In addition, AF does not guarantee AFH's debt, thus the default at AFH does not affect our rating on its subsidiary. Therefore, we affirmed our long-term issuer credit rating on AF and our issue-level rating on its senior secured debt because we understand it remains current on its debt obligations." The restructuring process at AF is now at the conciliation stage and may be implemented by way of: -- S&P said, "Accelerated safeguard proceedings in France, which we understand is the most likely scenario given current approval rates. This procedure will trigger the automatic stay provisions under the associated financial debt instruments issued by AF, which we view as tantamount to a default. We will therefore lower our issuer credit rating on AF to 'D' or 'SD' and our issue-level rating on its senior secured debt to 'D' upon the company filling for accelerated safeguard proceedings;" or -- A consensus in case 100% of the term loan lenders agree with the proposal, although S&P believes this option is less likely. In this case, it would lower its issuer credit rating on AF to 'D' or 'SD' and its issue-level rating on its senior secured debt to 'D' upon the close of the restructuring transaction. S&P said, "The negative outlook on AF indicates that we will lower our issuer credit rating to 'D' or 'SD' and our issue-level rating on its senior secured debt to 'D' when it enters accelerated safeguard proceedings because the procedure will trigger the automatic stay provisions under the associated financial debt instruments. We could also take the same action as of the close of the proposed transaction if the restructuring is implemented with its lenders' consensus. Following the restructuring implementation, we will review our ratings, as well as the group's new capital structure and liquidity position." ALVEST INVESTMENT: S&P Assigns 'B' LongTerm Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' long-term issuer credit rating to France-based Alvest Investment Holdings SAS (Alvest). S&P also assigned its 'B' issue rating to the EUR575 million term loan B (TLB), issued by Alvest's subsidiary Artemis Bidco SAS. The '3' recovery rating reflects our expectation of meaningful recovery prospects (50%-70%; rounded estimate 50%) in the event of a default. S&P said, "The stable outlook reflects our view that Alvest will continue to deliver on its business strategy and maintain credit metrics commensurate with the rating--specifically, adjusted EBITDA margins exceeding 15% in 2025. We expect the group to post positive free operating cash flow (FOCF), adjusted debt to EBITDA below 6x, and funds from operations (FFO) cash interest coverage trending toward 3x over our 12-month outlook horizon." Pai Partners, with its co-investor, the Abu Dhabi Investment Authority (ADIA), is acquiring a majority stake (68%) in France-based Alvest Investment Holdings SAS (Alvest), a leading global provider of airport ground support equipment (GSE). Alvest's previous owner Ardian will retain a minority stake (10%) alongside the company's founders and management team (22%). Alvest's credit quality is supported by good revenue prospects and robust demand led by electrification, rising profitability, and good cash conversion. It is constrained by the company's smaller scale and the narrower scope of its product portfolio (versus larger rated aerospace and defense peers) and by a tolerance for leverage. S&P said, "We forecast that Alvest's S&P Global Ratings-adjusted debt to EBITDA will increase to about 5.5x pro forma the transaction. We understand that, to fund the acquisition, Alvest will issue a EUR575 million TLB, alongside a U.S. dollar-denominated TLB ( EUR205 million equivalent in dollars), which has already been pre-placed. The new capitalisation will include EUR991 million of new equity (of which EUR75 million is a payment-in-kind [PIK] note that we treat as debt-like). Most of the old debt will be repaid, leaving only EUR61 million to be rolled over into the new capital structure. Furthermore, Alvest is planning to raise a new EUR125 million revolving credit facility (RCF), which we expect to be undrawn following completion of the transaction. We note that EUR300 million of preference shares are also present in the company's capital structure. We treat these as equity-like and exclude them from our leverage and coverage calculations because of stapling and an alignment of interest between non-common and common equity holders. That said, we expect that debt to EBITDA will be about 5.5x after the deal has closed. Our calculation of Alvest's debt includes EUR780 million of new term loans, EUR61 million of rolled over debt, EUR79 million of PIK notes (including interest), EUR40 million of lease liability, EUR22 million of trade receivables sold, EUR65.5 million of deferred consideration for past acquisitions, and EUR3 million of pensions. "Alvest's leading market position and robust demand for airport GSE underpin our rating, although the rating is somewhat constrained by the size of the market. Alvest designs, assembles, and distributes technical products for the aviation industry, which include aviation GSE, spare parts, and services. The company also provides maintenance, overhaul, and leasing services for GSE through the Alvest Equipment Services (AES) business. Alvest has steadily expanded its market presence over recent years and is now well positioned as the market leader, capturing more than one-quarter of the total market share according to management's estimates. The company also benefits from a well-diversified geographic footprint, with operations spanning the Americas, Europe, and the Asia-Pacific region. In addition, its broad customer base mitigates concentration risk, with no material dependency on any single client. Alvest's revenue is further bolstered by its established client relationships, increasing share of recurring revenues, and long-term contracts. Finally, Alvest operates in a market characterized by high barriers to entry, underpinned by the mission-critical nature of its products and services. The company serves a highly regulated end-market that demands strict adherence to quality, safety, and robustness standards, which supports Alvest's competitive positioning. Nevertheless, its smaller scale and narrow product focus versus larger rated peers in aerospace and defense are factors we deem as constraining the rating." Alvest's sales growth is bolstered by strong underlying market dynamics, including unfulfilled demand and structural trends such as electrification and automation. S&P expects the company's revenues to rise by 16%-17% to about EUR1.1 billion in 2025 from EUR932 million in 2024, thanks to its high order book of EUR1.10 billion at end-2024. This should also cover a significant portion of our 8%-10% growth assumption for 2026, with revenue reaching up to EUR1.2 billion. The elevated order intake levels indicate a significant unmet demand in the market, primarily driven by the rising propensity to fly, ongoing development and expansion of airport infrastructure, and large military programs influenced by recent geopolitical conflicts. Most importantly, customers are increasingly prioritizing electrification in response to decarbonization commitments, further fueling demand. Over half of Alvest deliveries are currently made of electric GSE and this should grow to around two-third by the end of the decade. This focus, coupled with investments in automation, continues to drive industry growth. Simultaneously, the segment remains undersupplied, as evidenced by the nearly full capacity utilization across most players. In response, suppliers are actively expanding their capacities to meet the increasing demand. S&P said, "We expect Alvest will continue to improve its profitability, which is expected to translate into positive cash flow generation. Improving profitability under the new ownership will be underpinned by strong market fundamentals and a robust business model. We expect the S&P Global Ratings-adjusted EBITDA margin to improve by more than 100 basis points to 17.5% in 2025, with further expansion toward 18% by 2026. This margin improvement will primarily be driven by volume growth, alongside productivity gains and an improved product mix. Profitability and pricing power are expected to remain strong, supported by a structurally undersupplied market and the company's proven ability to pass through inflationary cost increases to customers in the past. We forecast that Alvest will report positive FOCF of EUR15 million- EUR20 million in 2025, including transaction costs, and EUR30 million- EUR40 million in 2026. This translates into S&P Global Ratings-adjusted debt to EBITDA of about 5.5x in 2025 and about 5.0x in 2026, with adjusted funds from operations (FFO) to debt of 8%-12% in 2025 and 2026. "We recognize there are economic uncertainties due to U.S. government and tariff implementation. Alvest generates about 27% of its revenue in North America. S&P Global Ratings believes there is a high degree of unpredictability around policy implementation by the U.S. administration and possible responses--specifically with regard to tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. As a result, our baseline forecasts carry a degree of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential and actual policy shifts and reassess our guidance accordingly. Despite these global uncertainties, we view several factors as supportive for Alvest. First, the company has established a robust manufacturing footprint in the U.S., enabling a local-for-local production model. Second, the company demonstrates a high degree of operational flexibility, allowing it to adapt its manufacturing and sourcing strategies in response to changing cost dynamics across regions. This flexibility should mitigate the potential impact of trade-related disruptions on its cost structure and overall competitiveness. "We assume the final documentation and the final terms will not differ materially, and therefore will not result in any changes that would materially affect our base case. If we do not receive the final documentation within a reasonable timeframe, or if the final documentation and final terms of the transaction depart from the materials and terms reviewed, we reserve the right to revise the ratings. Potential changes include, but are not limited to, the utilization of proceeds, maturity, size and conditions of the facilities, financial and other covenants, security, and ranking. "The stable outlook reflects our view that Alvest will continue to deliver on its business strategy and maintain credit metrics commensurate with the rating--specifically, adjusted EBITDA margins reaching at least 15% in 2025. We expect the group to post positive FOCF, adjusted debt to EBITDA below 6x, and funds from operations (FFO) cash interest coverage trending toward 3x over our 12-month outlook horizon." S&P could lower the ratings if: -- Profitability weakens to below 14% due to an adverse market development; -- Debt to EBITDA exceeds 6x, or -- Funds from operations (FFO) cash interest coverage falls below 2x. S&P said, "Although unlikely in the near term, we could consider taking a positive rating action if the company consistently expands its revenue base and widens its suite of products and services, while generating EBITDA margins above 18% on a sustainable basis. We would also expect adjusted debt to EBITDA to be sustainably below 5x." BERTRAND FRANCHISE: S&P Downgrades LT ICR to 'B-' on Deviation -------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on France-based Bertrand Franchise, and its issue ratings on the company's notes, to 'B-' from 'B'. The recovery rating on the notes is unchanged at '3', indicating recovery prospects of about 50%-70% (rounded estimate 55%) in the event of default. S&P said, "The stable outlook reflects our expectation that Bertrand Franchise will increase its EBITDA through its expansion program, mainly via franchisees, while maintaining adequate liquidity and progressively reducing S&P Global Ratings-adjusted leverage toward 7.0x excluding the preference shares (about 8.0x including preference shares) in the next 24 months. We anticipate negative FOCF after leases of about EUR20 million in 2025, linked to the higher growth capital expenditure (capex) to finance the company's expansion, but we expect this to turn positive in 2026 and thereafter." Bertrand Franchise's operating performance softened in 2024 on the back of weaker consumer confidence, engendering credit metrics deterioration. The group's systemwide sales (SWS) increased marginally by 2.4% in 2024 (pro forma 12 months consolidated perimeter in 2023) mainly thanks to the expansion of the store network and to new brand additions, somewhat compensating for our assumption of negative life-for-like sales. The latter reflected the weaker consumer confidence in a year characterized by a summer trading largely affected by the Olympics Games, unstable French political landscape and international geopolitical tensions. As a result and coupled with the transfer of restaurants from directly operated to franchised, total revenue stood at EUR980 million in 2024, about EUR30 million lower than in 2023 (pro forma 12 months consolidation). This resulted in the 2024 S&P Global Ratings-adjusted EBITDA at EUR274 million with a margin of 27.9% down from 30.1% in 2023, because of softer topline combined with continuous elevated food costs on certain products, including animal protein. S&P said, "While we previously expected the company to quickly deleverage to 6.5x in 2024, the weaker-than-expected growth in EBITDA resulted in an S&P Global Ratings' debt to EBITDA remaining very elevated at 8.1x (excluding the preference shares). Additionally, this led to the FOCF after leases being negative at EUR45 million in 2024, compared to our expectation of positive cash flows." S&P said, "We view Bertrand Franchise's asset-light franchised model, which supports strong growth potential and higher than average profitability in the forecast period, as positive. The group has an attractive franchise model, which enables the company to expand rapidly in good locations to fill the whitespace and gain market share compared with competitors. At the same time, the asset-light business model partially protects metrics during times of inflation because franchisees bear most of the cost increases, while Bertrand Franchise benefits from higher selling prices, translating to higher royalties and rental income. In addition, the various brands support sound diversification and allow the group to increase in various cuisine types, price points, and formats reaching different customers, although we note that the flagship Burger King brand still accounts for about 75% of the total sales. We expect the company to open between 120-150 new stores per year in 2025-2026, while at the same time reducing the share of own stores and increasing that of franchises. We forecast revenues to increase by single digits to about EUR1.01 billion in 2025 and further to EUR1.08 billion in 2026. In addition, Bertrand Franchise has been working on its cost base, notably reworking the recipes to change the product mix depending on the inflation levels. As a result, we expect S&P Global Ratings-adjusted EBITDA to reach about EUR305 million in 2025 and EUR337 million in 2026, representing margins between 30%-32%." Bertrand Franchise is owned by a consortium of investors, which have a high leverage tolerance with expected S&P Global Ratings-adjusted leverage above 6.5x excluding the preference shares (8.0x including them) over the next 24 months. Bertrand Corp. indirectly owns the majority of Bertrand Franchise, mostly through common equity, while the remainder is owned by Bridgepoint Group PLC and United JVCO, a consortium of investors composed of Goldman Sachs Asset Management, L.P. and Alpinvest. S&P said, "We regard the overall ownership structure as akin to a financial sponsor, exemplified by a high degree of tolerance toward leverage (debt to EBITDA to stay well above 5.0x over the next three years). We note JVCO holds 18% economic interest through EUR458 million preference shares, which documentation includes several provisions which do not qualify for equity treatment according to our ratios and adjustment criteria. However, in our analysis, we acknowledge the preference shares cash-preserving characteristics and deep subordination to the senior debt, and we monitor leverage with and without them. Overall, our total adjusted debt equals about EUR2.7 billion at year-end 2025, including EUR917 million of lease liabilities, EUR112 million of put options on minority stakes, and the EUR458 million of preference shares. We expect S&P Global Ratings-adjusted debt to EBITDA including the preference share to stand at 8.8x in 2025 (7.3x excluding preference shares), then falling to 8.1x in 2026 (6.8x excluding preference shares)." S&P said, "While the evolution of FOCF after leases for the current year should remain under pressure because of high capex, we think it should be positive at about EUR10 million- EUR20 million in 2026. Despite the asset-light business model, the group still must budget capex to partially cover franchise openings (depending on the business model) and its own-store opening expense, as well as maintenance costs related to refurbishments and transfer from own-restaurant to franchise locations and other headquarter costs. We expect capex to reach about EUR75 million in 2025 (7.5% of company revenue), affecting FOCF after leases which we expect at about negative EUR20 million from negative EUR45 million in 2024. From 2026 onward, we expect lower construction investments, lower own store openings with stronger expansion of a pure franchise model, thus slightly reducing capex to EUR60 million- EUR70 million. This, coupled with an increasing S&P Global Ratings-adjusted EBITDA, will drive annual FOCF after leases to EUR15 million- EUR35 million in 2026-2027. We note that the company finances part of its capex through own store disposals (franchise conversion) which we do not account in our FOCF after leases metric but brings additional buffer to the liquidity profile. We also understand that growth capex could be cut or delayed if needed, although we do not expect this in our base-case scenario, because the company has adequate liquidity thanks to its cash reserves and full availability of its revolving credit facility (RCF). "We view Bertrand Franchise's credit quality as immune from that of its holding companies, including Bertrand Corp. and Bertrand Holding SAS (BH). While Bertrand Franchise has a cash pool with BH, according to the offering memorandum all funds the issuer advances to BH will be deposited in a segregated accounts to be pledged for the benefits of Bertrand Franchise' note holders. We think that Bertrand Franchise's operations are fully independent from the other investments of Betrand Corp. We also understand Bertrand Corp. has not significant net financial debt, while we consider BH, a societé par acitions simiplifiée, as a family holding. We do not expect Bertrand Corp. would be able to call for Bertrand Franchise's assets in a default of the parent, given the documentation, with a clear restricted perimeter, together with the significant minority interests and preference shares. "The stable outlook reflects our expectation that Bertrand Franchise will increase its EBIDTA through its expansion program, mainly via franchisees, while maintaining adequate liquidity and progressively reducing S&P Global Ratings-adjusted leverage toward 7.0x excluding the preference shares (toward 8.0x including preference shares) in the next 24 months. We anticipate negative FOCF after leases of about EUR20 million in 2025, linked to the higher growth capex to finance the company's expansion, but we expect this to turn positive in 2026 and thereafter. "We could lower the rating if the group is unable to execute its growth strategy or its operating performance remained subdued, leading to structurally weaker EBITDA, such that the capital structure becomes unsustainable. We could also lower the rating if cash-flow generation is significantly weaker than expected, putting the company's liquidity at risk or eroding covenant headroom. "We could raise the ratings if, thanks to stronger-than-expected EBITDA and FOCF, Bertrand Franchise's S&P Global Ratings-adjusted debt to EBITDA declines to about 6.0x excluding the preference shares (or toward 7.5x including the preference shares) and FOCF turns substantially positive." FINANCIERE N: S&P Withdraws 'B-' ICR Following Debt Repayment ------------------------------------------------------------- S&P Global Ratings withdrew its 'B-' issuer credit rating on France-based medical devices manufacturer Financiere N (Nemera) at the company's request. The outlook on the long-term rating was stable at the time of the withdrawal. S&P also withdrew its 'B-' issue rating on Nemera's EUR690 million first-lien senior secured term loan B. This follows the full repayment of the debt on May 7, 2025. OPAL BIDCO: Fitch Corrects May 15 Ratings Release ------------------------------------------------- Fitch Ratings issued a correction of a rating action on Opal Bidco SAS published on May 15, 2025. It clarifies that the borrower of the USD3,750 million term loan is Opal Bidco SAS not Opal US LLC. The amended ratings action is as follows: Fitch Ratings has assigned Opal Bidco SAS senior secured facilities of USD1,100 million notes, EUR1,750 million loan, EUR1,250 million notes and USD3,750 million term loan final ratings of 'BB-' with Recovery Ratings of 'RR3'. The debt is being issued to support the acquisition of Opal Holdco 4 SAS (Opella). The final rating is in line with the expected rating that Fitch assigned on March 24, 2025. Opella's 'B+' rating reflects high initial financial leverage, which Fitch estimates at 7x, and a very strong business profile. As a leading global player in the consumer healthcare sector, the company has a broad portfolio of global and local brands, diversified across product categories, regions and distribution channels. The Stable Outlook is based on Opella's potential for deleveraging towards 6.5x in 2026 and below 6.0x in 2027. Fitch expects healthy organic revenue growth, improved profitability improvement, and sizeable and growing FCF to support this progress. Key Rating Drivers Strong Consumer Health Positioning: Opella is the third-largest global sector constituent in the highly fragmented over-the-counter (OTC) drugs and vitamins, minerals, and supplement (VMS) markets, with sizeable scale of Fitch-adjusted EBITDA of EUR1.1 billion. It focuses on diverse categories including digestive wellness (29% of 2024 revenue), pain care (21%), allergy (15%), and cough and cold (10%). Opella's revenue is well diversified globally, with 35% from Europe, 26% from North America, 24% from Asia, Middle East and Africa, and 15% from Latin America. Opella's broad exposure to the emerging markets offers higher growth potential compared with industry averages. Fitch expects the company to continue its organic revenue growth at a CAGR of 3.5% during 2025-2029, benefiting from resilient secular growth in the consumer healthcare sector. Opella's sales grew at a CAGR of 4.4% during 2019-2024, showing low cyclicality in economic downturns, with the majority of sales from OTC products (2024: 77%). High Starting Leverage Constrains Rating: Opella's rating is constrained by its high opening financial leverage with Fitch-estimated EBITDA leverage of 7x at end-2025, following the company's ongoing carve-out from Sanofi. Fitch expects leverage to drop to 6.5x in 2026 and below 6.0x in 2027, supported by gains from operating efficiencies initiatives and restructuring costs reduction. Fitch assumes Opella will focus on organic growth through further category penetration, innovation, geographic expansion and e-commerce development, coupled with self-funded bolt-on acquisitions. Failure to deleverage to 6.5x by end-2026 would signal operational challenges or higher execution risks and would considerably tighten the rating headroom. Competitive Brand Portfolio: Opella's sizeable, diversified and well-established brand portfolio of science-backed products contributes to a strong business risk profile, materially underpinning its overall credit profile. This supports higher debt capacity commensurate with the high end of the 'B' rating category, despite high opening leverage. Around 70% of Opella's revenue is generated by six global leading brands and nine local brands that rank in the top three of their respective categories or regions. Critical Innovation Capability; Omni-Channel: Fitch estimates that Opella spends 4% of its revenue on research and development (R&D) annually with a focus on improving formulations, product efficacy or adding new indications within the existing portfolio, with limited execution risks. Opella's business profile is also supported by a broad commercial footprint and well-diversified distribution channels across pharmacies, retailers and e-commerce, combining its own capabilities with third-party distributors in smaller countries. Opella's portfolio is not at risk of medium-term patent expiration. Active Portfolio Management: Fitch expects Opella's efforts to optimise its nearly 100-brand portfolio to ensure sustained mid-single digit revenue growth and improve profitability. In the US market, revenue growth in the next one to three years will be also supported by Qunol VMS products, a US-based brand acquired in 2023. During 2020-2024, the company disposed of more than 150 brands that no longer fit into its strategy and added new high-growth brands, reducing the revenue concentration risk on a few mega-brands. Cash Generative Operations: Fitch expects Opella to sustain positive mid-single digit free cash flow (FCF) margins in 2025-2028 as EBITDA profitability gradually improves due to premium product positioning, moderate working capital needs, and contained capex. Fitch expects Opella's FCF margin to improve to mid-to-high single digits in 2028, driven by Fitch-adjusted EBITDA margin expansion to above 23% and the discontinuation of separation costs. Fitch considers the consumer healthcare market inherently resilient and predictable, with minimal price elasticity contributing to healthy cash flows. Limited Execution Risk on Separation: Opella's carve-out from Sanofi is targeted for completion in 2Q25. Fitch views the process as substantially complete with limited residual execution risk, based on the progress achieved by the group to date since the separation announcement in 2021. Opella is now operating independently from Sanofi, which will remain a minority shareholder, across multiple corporate functions including R&D, distribution, and central office. The remaining separation costs, mainly related to IT, are estimated at EUR100 million a year during 2025-2027. This is approximately half of the 2024 separation costs each year for the next three years to complete the separation. Resilient Market Fundamentals: Opella's rating is supported by the attractive underlying long-term growth fundamentals of the global consumer healthcare market. These include rising health and wellbeing awareness, an aging population, a focus on prevention, increasing interest in self-medication, and growing disposable income across developed and developing economies. An increasing online offering provides additional potential for market penetration. Opella's business model is well placed to capitalise on these supportive macro-economic sector trends. Peer Analysis Opella has a comparable business profile with Galderma Group AG (BBB/Stable), a medical, aesthetic and consumer skin care producer. Both companies enjoy strong market positions in their respective segments, leading brand portfolios, wide sales geographical diversification, a resilient product category and healthy growth opportunities. However, Galderma has much lower leverage and more stringent financial policies than Opella. Opella is rated higher than Neopharmed Gentili S.p.A. (B/Stable), a specialist pharmaceutical company with higher profitability and slightly lower leverage, while Opella benefits from greater scale, stronger brands and broader diversification. Opella is also rated one notch higher than Cooper Consumer Health (B/Stable), which is also focused on OTC consumer healthcare products, but its higher margin is balanced by limited scale and weaker geographic diversification. Opella has a stronger business profile than THG PLC (B+/Stable), a seller of wellness and beauty products with a mix of third-party and own brands. Opella has bigger scale with a larger portfolio of strong brands and a wider geographical reach. Opella's also benefits from stronger operating margins, which are balanced by its higher leverage and less conservative financial policy. Within the packaged food sector, Opella's brand portfolio is as similarly strong as Sigma Holdco BV's (Flora Food Group, B/Stable), with both credit profiles benefitting from a global presence and strong profitability. Both companies have high leverage, but Fitch views secular market trends for Opella as more resilient and providing higher growth opportunities than plant-based spreads, including margarine, where Flora Foods operates. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue CAGR of 4.8% in 2025-2029, supported mainly by 3%-4% of organic growth and bolt-on acquisitions. - EBITDA margin to gradually improve toward 23% by 2028, mainly driven by improved operating efficiencies and reducing restructuring cost. - Capex at 3%-3.5% of revenue a year during 2025-2028. - EUR100 million of acquisitions in 2026 and EUR250 million a year in 2027-2028, funded by internal cash. - No dividends paid during 2025-2028. Recovery Analysis The recovery analysis assumes that Opella would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Fitch estimates a post-restructuring GC EBITDA at around EUR900 million, on which Fitch bases the enterprise value (EV) to reflect operational difficulties including a hypothetical significant drop in market share and deterioration of profitability, which would lead to an unsustainable capital structure. Fitch assumes a distressed EV/EBITDA multiple of 6.5x, above the 5.0x-6.0x level applicable to most of Fitch-rated EMEA non-investment grade consumer sector peers. This multiple reflects Opella's strong global market position across a diversified branded product portfolio with attractive underlying cash generative properties. The allocation of value in the liability waterfall results in a Recovery Rating of 'RR3' for the total senior secured debt of EUR7.29 billion, indicating a 'BB-' instrument rating based on current assumptions, one notch above the IDR. The senior secured debt ranks pari passu with the EUR1.2 billion committed revolving credit facility (RCF), which Fitch assumes to be fully drawn prior to distress in line with its criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Aggressive financial policy or operating underperformance leading to a lack of deleveraging with EBITDA leverage above 7x - Inability to generate positive FCF margins in the mid-single digits, due to weakening performance or higher-than-expected restructuring charges - EBITDA interest coverage below 2x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage trending permanently below 6x together with more clarity on the financial policy - Steady profitability, with FCF in the mid-single digits, on a sustained basis - EBITDA interest coverage above 3.5x Liquidity and Debt Structure Fitch estimates Opella will have EUR265 million of freely available cash on hand at end-2025, after excluding EUR150 million that Fitch categorises as restricted for a minimum cash balance to meet its global daily operations and not available for debt service. The liquidity position is supported by Fitch's expectations of strong FCF, sufficient to fund a limited amount of scheduled amortised senior secured debt per year and potential bolt-on acquisitions. Opella's financial flexibility is bolstered by its access to EUR1,200 million RCF, which Fitch expects to remain undrawn over the rating horizon. The debt structure is concentrated but features long-dated maturities, with the RCF maturing in 2031, and the senior secured debt maturing in 2032. Issuer Profile Opella is one of the leading players in the consumer health market across more than 100 countries. Its diverse portfolio includes about 100 global and local brands that hold leading market positions in cough and cold, allergy, pain care and digestive in the OTC and VMS segments. 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. VEOLIA ENVIRONNEMENT: S&P Rates Junior Subordinated Hybrid 'BB+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' long-term issue rating to the undated, optionally deferrable, and deeply subordinated hybrid capital security to be issued by France-based utility Veolia Environnement S.A. (Veolia; BBB/Stable/A-2). Veolia Environnement S.A. issued a EUR500 million, junior, subordinated, perpetual hybrid security to partly refinance its EUR850 million hybrid instrument with a first call date falling in March 2026. The new instrument's first call date will fall on May 20, 2030 (in five years). S&P said, "We assess the security as having intermediate equity content and will remove equity content for a similar amount out of the EUR850 million hybrid instrument being partly replaced. "We assigned our 'BB+' rating to the security to reflect its subordination and optional deferability. "We consider the security to have intermediate equity content until its first reset date (Aug. 20, 2030) because the remaining term until its effective maturity will be 20 years. In line with our hybrid criteria, the instrument is eligible for intermediate equity content for longer, if our issuer credit rating on Veolia were to fall into the 'BB' category or lower. The security meets our hybrid capital criteria in terms of its subordination, perpetual nature, and availability to absorb losses and preserve cash through optional interest deferability. The proceeds will be used to partly replace the existing hybrid instruments with a first call date in March 2026. We are thus withdrawing equity content on EUR500 million out of the EUR850 million issuance, leaving EUR350 million bearing intermediate equity content not yet refinanced but to be replaced in a timely manner. We expect the group to maintain a stable stock of hybrid debt with intermediate equity content at about EUR3.6 billion." The company labels the instrument as "green," which does not affect either the issue rating or the equity content. S&P derives its 'BB+' issue rating by notching down from its 'BBB' long-term issuer credit rating on Veolia. The two-notch differential between the ratings reflects our notching methodology, which calls for: -- A one-notch deduction for subordination because the issuer credit rating on Veolia is investment grade ('BBB-' or above); and -- An additional one-notch deduction for payment flexibility to reflect the optional interest deferral. S&P said, "Due to what we see as the intermediate equity content of the security, we allocate 50% of the related payments on this security as a fixed charge and 50% as equivalent to a common dividend, in line with our hybrid capital criteria. The 50% treatment (of principal and accrued interest) also applies to our debt adjustment." Although the security is perpetual, it can be called at any time for tax, substantial repurchase, equity, credit rating, or accounting events, which we consider are all external events. Furthermore, Veolia can redeem it for cash between the first call date and its first reset date and on every interest payment date thereafter. If any of these events occur, the company intends to replace the instrument, although it is not obliged to do so. S&P believes Veolia intends to keep the security to strengthen its balance sheet. The interest to be paid on the security will increase by 25 basis points (bps) from August 2035, with a further 75-bps increase in August 2050. We consider the cumulative 100 bps as a material step-up that is not mitigated by a legally binding commitment to replace the instrument at that time. This step-up provides an incentive for Veolia to replace the instrument on the call date. Key factors in S&P's assessment of the instrument's deferability S&P said, "In our view, Veolia's option to defer payment of interest on the security is discretionary. This means that the company may elect not to pay accrued interest on an interest payment date because it has no obligation to do so. However, any outstanding deferred interest payment will have to be settled in cash if Veolia declares or pays an equity dividend or interest on equal-ranking securities, as well as if Veolia or its subsidiaries redeem or repurchase shares or equal-ranking securities. This is a negative factor in our assessment of equity content. That said, it's acceptable under our rating methodology because once the issuer has settled the deferred amount, it can choose to defer payment on the next interest payment date." Veolia retains the option to defer coupons throughout the instrument's life. The deferred interest on the security is cash-cumulative and will ultimately be settled in cash. Key factors in S&P's assessment of the instrument's subordination S&P said, "The security (and coupon) is intended to be a direct, unsecured, and deeply subordinated obligation of Veolia. The security ranks junior to all unsubordinated obligations, ordinary subordinated obligations, and prets participatifs (equity loans), and it is only senior to common and preferred shares. However, as per our criteria, we subtract only one notch for the deep subordination." Issuer Of hybrids outstanding Nominal Noncall S&P Global amount period Ratings' Issue (mil. EUR) Issuance date (years) equity content rating Veolia Environnment S.A. 500 May 2025 5 Intermediate BB+ 600 Nov. 2023 5.25 Intermediate BB+ 350 Oct. 2020 5.5 Intermediate BB+ 1,150 Oct. 2020 8.5 Intermediate BB+ 500 Nov. 2021 6.25 Intermediate BB+ Legacy Suez S.A. hybrids* Suez S.A. 500 Sept. 2019 7 Intermediate NR Total stock hybrids Veolia Group pro-forma 3,600 -- -- -- -- NR--Not rated. ============= I R E L A N D ============= INDIGO CREDIT III: Fitch Assigns 'B-(EXP)sf' Rating on Cl. F Notes ------------------------------------------------------------------ Fitch Ratings has assigned Indigo Credit Management III DAC expected ratings. The assignment of the final ratings is contingent on the receipt of final documents conforming to information reviewed. Entity/Debt Rating ----------- ------ Indigo Credit Management III DAC Class A LT AAA(EXP)sf Expected Rating Class B1 LT AA(EXP)sf Expected Rating Class B2 LT AA(EXP)sf Expected Rating Class C LT A(EXP)sf Expected Rating Class D LT BBB-(EXP)sf Expected Rating Class E LT BB-(EXP)sf Expected Rating Class F LT B-(EXP)sf Expected Rating Subordinated Notes LT NR(EXP)sf Expected Rating Transaction Summary Indigo Credit Management III DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans, first-lien, last-out loans and high-yield bonds. The portfolio is actively managed by Pemberton Capital Advisors LLP. The transaction will have a 4.5-year reinvestment period and a 7.5-year weighted average life (WAL) test at closing. The note proceeds will be used to fund a portfolio with a target par amount of EUR425 million. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B+'. The Fitch weighted average rating factor (WARF) of the target portfolio is 23.3. High Recovery Expectations (Positive): At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the target portfolio is 61%. Diversified Portfolio (Positive): The transaction will include various concentration limits, including exposure to the three-largest Fitch-defined industries in the portfolio at 42.5% and a top 10 obligor concentration at 25%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Positive): The transaction will have a 4.5-year reinvestment period and include reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL used for the transaction's Fitch-stressed portfolio and matrices analysis is 12 months less than the WAL covenant, to account for structural and reinvestment conditions after the reinvestment period, including passing the over-collateralisation and Fitch 'CCC' limitation tests. This reduces the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A and B notes and would lead to downgrades of one notch each for the class C to E notes and to below 'B-sf' for the class F notes. Based on the identified portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high default and portfolio deterioration. Due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio, the class B, D, E and F notes each have a rating cushion of two notches and the class C notes have a cushion of one notch. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to four notches each for the class A to E notes and to below 'B-sf' on the class F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to two notches each for the rated notes, except for the 'AAAsf' rated notes. Upgrades, which are based on the Fitch-stressed portfolio, may occur during the reinvestment period on better-than-expected portfolio credit quality and a shorter remaining WAL test, leading to the ability of the notes to withstand larger-than-expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period 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 Most of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Indigo Credit Management III 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. RRE 26: S&P Assigns Prelim. BB-(sf) Rating on Class D Notes ----------------------------------------------------------- S&P Global Ratings assigned its preliminary credit ratings to RRE 26 Loan Management DAC's class A-1 to D notes. At closing, the issuer will also issue unrated performance, preferred return, and subordinated notes. This is a European cash flow CLO transaction, securitizing a portfolio of primarily senior secured leveraged loans and bonds. The transaction will be managed by Redding Ridge Asset Management (UK) LLP. The preliminary ratings assigned to RRE 26 Loan Management DAC's notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which we expect to be bankruptcy remote. -- The transaction's counterparty risks, which we expect to be in line with S&P's counterparty rating framework. -- Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will permanently switch to semiannual payments. -- The portfolio's reinvestment period will end approximately 4.5 years after closing, and the portfolio's maximum average maturity date is approximately 13 years after closing. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,804.77 Default rate dispersion 465.62 Weighted-average life including reinvestment(years) 98.51 Obligor diversity measure 15.77 Industry diversity measure 1.28 Regional diversity measure 4.96 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 121 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.25 Target 'AAA' weighted-average recovery (%) 36.88 Target portfolio weighted-average spread (%) 3.76 S&P said, "We understand that at closing, the portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we have conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. As such, we have not applied any additional scenario and sensitivity analysis when assigning ratings to any class of notes in this transaction. "In our cash flow analysis, we used the EUR400 million target par amount, the actual weighted-average spread (3.60%), and the covenanted weighted-average coupon indicated by the collateral manager (4.00%). We assumed weighted-average recovery rates in line with those of the actual portfolio presented to us, apart from at the 'AAA' level, where 37.00% was modelled. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Our credit and cash flow analysis indicates that the available credit enhancement for the class A-2, B, C-1, C-2, and D notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from closing, during which the transaction's credit risk profile could deteriorate, we have capped the assigned preliminary ratings. "At closing, we expect the transaction's documented counterparty replacement and remedy mechanisms to adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Following the application of our structured finance sovereign risk criteria, we consider the transaction's exposure to country risk to be limited at the assigned preliminary ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "At closing, we expect the transaction's legal structure to be bankruptcy remote, in line with our legal criteria/. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our assigned preliminary ratings are commensurate with the available credit enhancement for the class A-1, A-2, B, C-1, C-2, and D notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A-1 to D notes to four hypothetical scenarios." Environmental, social, and governance factors S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Preliminary ratings Prelim Prelim amount Credit Class rating* (mil. EUR) enhancement (%) Interest rate§ A-1 AAA (sf) 244.00 39.00 Three/six-month EURIBOR plus 1.35% A-2 AA (sf) 44.00 28.00 Three/six-month EURIBOR plus 2.05% B A (sf) 28.00 21.00 Three/six-month EURIBOR plus 2.30% C-1 BBB (sf) 20.00 16.00 Three/six-month EURIBOR plus 3.20% C-2 BBB- (sf) 8.00 14.00 Three/six-month EURIBOR plus 4.25% D BB- (sf) 18.50 9.38 Three/six-month EURIBOR plus 6.00% Performance Notes NR 1.00 N/A N/A Preferred return notes NR 0.25 N/A N/A Subordinated Notes NR 44.125 N/A N/A *The preliminary ratings assigned to the class A-1 and A-2 notes address timely interest and ultimate principal payments. The ratings assigned to the class B, C-1, C-2, and D notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. NR--Not rated. N/A--Not applicable. EURIBOR--Euro Interbank Offered Rate. SALUS (NO. 33): S&P Lowers Class D Notes Rating to 'B(sf)' ---------------------------------------------------------- S&P Global Ratings lowered its credit ratings on Salus (European Loan Conduit No. 33) DAC's class A notes to 'A+ (sf)' from 'AA- (sf)', class B notes to 'BBB- (sf)' from 'BBB+ (sf)', class C notes to 'B+ (sf)' from 'BB (sf)', and class D notes to 'B (sf)' from 'BB- (sf)'. At the same time, S&P removed these ratings from CreditWatch negative where it placed them on April 8, 2025. Rating rationale The rating actions follow the publication of the special notice, that the noteholders have approved the consent solicitation for the transaction. S&P has reviewed the consent solicitation and revised our analysis using the updated data provided by the servicer as at Jan. 31, 2025, as well as taking into account the terms and conditions agreed in the consent solicitation. Primarily, the loan maturity date has been extended to January 2028 and the note maturity date extended to 2032 from 2029 in exchange for an additional 20 basis points (bps) on the note margins for each class of notes. S&P said, "We understand from the servicer that the borrower received sale bids for the property but did not proceed as it would not have received a fair price for the property, in the borrower's opinion. This was due to the impending loan maturity date and opportunistic bids from the purchasers, according to them. We believe that the debt restructuring (amendment to the terms and conditions of the notes) was not a distressed debt restructuring as in our view, the noteholders are being fairly compensated (an extra 20 bps of interest paid to each class of notes) for agreeing to the new terms and conditions. Also, nearly all classes of noteholders agreed to the restructuring and most of the classes of notes would have likely been repaid in full had the borrower accepted the highest bid. We therefore did not lower our ratings to 'D (sf)' as we would have done following a distressed restructuring." Transaction overview The transaction closed in November 2018 and is a U.K. CMBS transaction secured by a single senior loan originated by Morgan Stanley Bank N.A. (Morgan Stanley) and backed by CityPoint, an office tower in Central London. The loan had an initial term of three years with two one-year extension options available, subject to the satisfaction of certain conditions. All loan extension options available under the senior loan agreement were exercised and the loan was scheduled to mature in January 2024. A 12-month extension to the senior loan maturity date to Jan. 20, 2025, was granted, alongside amendments to the senior loan, to allow the borrower to recapitalize the property by way of sale or refinancing on or before the extended maturity date. The borrower did not secure a sale or refinancing of the loan at the end of the 12-month period. The senior loan maturity was further extended to April 20, 2025, subject to certain conditions, to allow the borrower to continue trying to refinance the loan on or before the extended maturity date on April 20, 2025. A special notice confirmed that the borrower intended to extend the loan for a further three years subject to certain conditions. Among other things, the borrower will establish a cash trap account, in which it will deposit an initial GBP8.5 million from the new money loan proceeds, minus amounts allocated for costs and expenses related to the senior and mezzanine finance parties, issuer secured creditors, senior obligors, mezzanine borrower, and the CVR issuer. Existing financial covenants have been removed. A noteholders meeting was held on April 16, 2025, and the consent solicitation was agreed. The loan has been extended for a further three years with loan maturity in January 2028 and is hedged by a cap with a strike rate of 4.5%. The legal final maturity date has also been extended to January 2032 from January 2029 which means that the tail period would remain at four-years. The senior loan securing this transaction totals GBP363.3 million, split into a GBP349.8 million term loan facility and a GBP13.5 million capital expenditures (capex) facility. There is also GBP91.9 million in mezzanine debt and a committed new money loan of GBP21.5 million, (which is part of the restructuring) which are fully subordinated to the senior loan. An additional uncommitted new money loan can be advanced, but this is subject to certain conditions if it is required during the course of the loan term. As of the January 2025 interest payment date (IPD), the property's vacancy (by area) decreased to 11.7% from 18.4% on the October 2024 IPD after a 10-year lease was completed with Simpson Thacher & Bartlett LLP (STB). S&P said, "We expect the vacancy rate to decrease to 5% when a new lease for the sixth floor is signed, as mentioned in the servicer report. However, we recognize that the vacancy rate may increase in 2028 and 2030, as the largest occupiers, Squarepoint Capital and Simmons & Simmons, both intend to exercise their respective break clauses that year, after the loan maturity date in 2028. Any potential purchaser is likely to consider the loss of rental income from Squarepoint Capital and Simmons & Simmons when assessing the purchase price for the property. Nevertheless, we believe the space vacated by Squarepoint and Simmons & Simmons will be attractive to new tenants after the current occupier's departure in 2030, as the sponsor is investing in property improvements to achieve higher energy performance certificates (EPCs). Our analysis incorporates a vacancy rate that accounts for any lease rollover for the property." S&P said, "At the same time, the total contractual rent was reported as GBP34.3 million, up from GBP31.5 million at our previous review. Approximately GBP4.9 million worth of rent-free incentives will expire in increments over the next two years until March 2027. In addition, 4.2% of the total contractual rent is up for renewal by the end of 2025. The weighted-average lease term until break is 6.1 years, longer than the 5.8 years at our previous review. "The tenant profile remains primarily legal and professional firms, with the two largest tenants being law firms contributing 63% of the total contractual rent. The top five tenants contribute 81% of the total rental income for the property. Retail and leisure tenants, including restaurants, coffee shops, bars, and a gym, represent 3.0% of the total rental income for the property. "We have assumed 20% vacancy based on the current and historical property vacancy as well as lease rollover—the same as at our previous review. The London City submarket vacancy is improving and is approximately 8%, while the current vacancy for the property is 11.7% and has ranged between 12% and 20% during the past two years. We also incorporated the upcoming lease breaks described above in our vacancy assumption. In addition, our non-recoverable expenses assumption has remained stable at 10.6%. As a result, our S&P Global Ratings net cash flow (NCF) has marginally increased to GBP27.6 million from GBP27.5 million. "We then applied a 6.5% capitalization (cap) rate against this S&P Global Ratings NCF, which we increased by 50 bps since our previous review. This adjustment reflects our belief that the property is currently less attractive than other available properties in the market. We also deducted approximately GBP4.5 million for rent-free periods as of March 2025 and 5% of purchase costs to arrive at our S&P Global Ratings value. Our S&P Global Ratings value represents a 40.4% haircut to the March 2023 market value of GBP670 million. We believe this market value is not a true reflection of the price a purchaser would pay in today's market." Other analytical considerations S&P said, "We also analyzed the transaction's payment structure and cash flow mechanics. We assessed whether the cash flow from the securitized asset would be sufficient, at the applicable rating, to make timely payments of interest and ultimate repayment of principal by the legal maturity date of the floating-rate notes, after considering available credit enhancement and allowing for transaction expenses and external liquidity support. The available liquidity facility is GBP19.8 million There have been no drawings made from the liquidity facility since closing. Our analysis also included a full review of the legal and regulatory risks, operational and administrative risks, and counterparty risks. Our assessment of these risks remains unchanged since closing and is commensurate with the ratings." Rating actions S&P said, "Our ratings in this transaction address the timely payment of interest, payable quarterly, and the payment of principal no later than the legal final maturity date. The terms and conditions of the notes that our ratings address have now changed, with the ultimate principal repayment deadline adjusted to 2032 instead of 2029. Since this was not a distressed debt restructuring, we have not lowered our ratings on the notes to 'D (sf)'. Our current ratings reflect the expectation of principal payment no later than the legal final maturity date in 2032. "We believe the extension of the loan to January 2028, along with the extended note maturity date of the notes to 2032, results in a continued four-year tail period for the notes. In our opinion, this four-year tail period would be adequate to facilitate a resolution of the loan in a workout scenario, given that the collateral is a well-located office property in Central London and the sponsor is upgrading the property to achieve higher EPC ratings." The transaction's credit quality has been influenced by hybrid working, which has altered demand dynamics in the London office sector. While the property's vacancy rate has begun to improve, it still exceeds the overall vacancy rate in the London City office market. Additionally, Squarepoint Capital and Simmons & Simmons plan to vacate the asset in 2028 and 2030 respectively when they both exercise their break clause. S&P has considered this in its analysis when calculating the revised S&P Global Ratings recovery value. S&P said, "We applied a capitalization (cap) rate of 6.5% to this S&P Global Ratings NCF, reflecting an increase of 0.50 basis points since our last review. This adjustment is based on our assessment that this is a distressed asset. Consequently, our S&P Global Ratings value is now 7.4% lower than it was during our previous review. "The S&P Global Ratings senior loan-to-value ratio is 91.0%, up from 85.2% at our previous review. After considering transaction-level adjustments and the results of our cash flow analysis, we lowered our ratings to 'A+ (sf)' from 'AA- (sf)' on the class A notes, to 'BBB- (sf)' from 'BBB+ (sf)' on the class B notes, to 'B+ (sf)' from 'BB (sf)' on the class C notes, and to 'B (sf)' from 'BB- (sf)' on the class D notes. At the same time, we removed these ratings from CreditWatch negative." TRINITAS EURO CLO IX: S&P Assigns B-(sf) Rating on Class F Notes ---------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Trinitas Euro CLO IX DAC's class A, B, C, D, E, and F notes. The issuer also issued unrated subordinated notes. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will permanently switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.5 years after closing, while the noncall period will end 1.5 years after closing. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,588.30 Default rate dispersion 638.67 Weighted-average life (years) 4.90 Obligor diversity measure 136.76 Industry diversity measure 21.01 Regional diversity measure 1.20 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.07 Actual target 'AAA' weighted-average recovery (%) 37.33 Actual target weighted-average spread (net of floors; %) 3.64 Actual target weighted-average coupon 4.64 S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we have conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR375 million target par amount, the covenanted weighted-average spread (3.50%), the covenanted weighted-average coupon (4.00%), and the actual target portfolio weighted-average recovery rates for all the rated notes. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "The transaction's legal structure and framework are bankruptcy remote. The issuer is a special-purpose entity that meets our criteria for bankruptcy remoteness. "Our credit and cash flow analysis show that the class B, C, D, and E notes benefit from break-even default rate and scenario default rate cushions that we would typically consider to be in line with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we have capped our ratings on the notes. The class A and F notes can withstand stresses commensurate with the assigned ratings. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A to F notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A to E notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category--and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met--we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. "For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 225.00 40.00 Three/six-month EURIBOR plus 1.24% B AA (sf) 50.60 26.51 Three/six-month EURIBOR plus 1.85% C A (sf) 20.60 21.01 Three/six-month EURIBOR plus 2.40% D BBB- (sf) 26.30 14.00 Three/six-month EURIBOR plus 3.35% E BB- (sf) 16.80 9.52 Three/six-month EURIBOR plus 6.40% F B- (sf) 11.30 6.51 Three/six-month EURIBOR plus 8.32% Sub. Notes NR 29.10 N/A N/A *The ratings assigned to the class A and B notes address timely interest and ultimate principal payments. The ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. ========= I T A L Y ========= PRO-GEST SPA: S&P Suspends 'SD' LongTerm Issuer Credit Rating ------------------------------------------------------------- S&P Global Ratings suspended its 'SD' (selective default) long-term issuer credit rating on Pro-Gest SpA, and its 'D' issue rating on the company's EUR250 million senior unsecured notes due December 2024. This is due to a lack of sufficient and timely information necessary to maintain our ratings, particularly regarding the new capital structure and business plan. S&P said, "We will resume our surveillance and reinstate the ratings once sufficient data is available and in line with our standards for quantity, timeliness, and reliability. If our information requirements for surveillance are not fulfilled within a reasonable time frame, we will withdraw our ratings." TELECOM ITALIA: Fitch Alters Outlook on 'BB' LongTerm IDR to Pos. ----------------------------------------------------------------- Fitch Ratings has revised Telecom Italia S.p.A.'s (TIM) Outlook to Positive from Stable, while affirming its Long-Term Issuer Default Rating (IDR) of 'BB'. The Positive Outlook follows TIM's deleveraging and reflects scope for additional debt reduction, including with the expected proceeds of the 1998 concession charge dispute. In accordance with its stated financial policy, TIM has greatly reduced leverage since the disposal of fixed-line network (NetCo) to Optics Bidco SPA (FiberCop; BB/Stable). TIM's net leverage is strongly positioned for its 'BB' rating and is set to fall further up to 2027. However, its base case projections indicate that the company's free cash flow (FCF) and cash from operations (CFO) metrics are likely to improve at a slower pace. Consistent operating results and a reduction of interest expenses through further deleveraging could improve these metrics towards the levels of the company's direct peers, driving further positive rating momentum. Key Rating Drivers Further Leverage Reduction: TIM's Fitch-calculated net debt fell to about EUR8.8 billion in 2024, as Fitch had anticipated, from about EUR21.3 billion in 2023, on the inclusion of the network disposal proceeds and debt deconsolidation. Fitch-calculated EBITDA net leverage is forecast to be 2.8x for 2025, the first full year of trading with the new business perimeter after disposals. This figure is anticipated to fall to 2.4x from 2026, aided by the proceeds of the Sparkle Telecom network disposal. This positions TIM's leverage at the lower end of its forecast range in November 2023 at the time of the network disposal announcement, strongly within its 'BB' rating. Moderate Improvements in Cash Generation: In 2024, TIM's cash flow metrics surpassed its expectations, as lower capex and non-recurring items offset weaker-than-expected cash from working capital. Fitch expects CFO less capex to be at 0.7% of debt in 2025, before rising to about 3% by 2028 in the absence of other management actions. However, TIM's cash generation remains low for its rating, considering the cash generation potential of its service-driven business after network disposals. Enhancements to the cost structure, lower interest cost and capex will be crucial to improving cash generation and the rating trajectory. Potential for Further Deleveraging: Fitch anticipates EUR700 million of disposal proceeds in 2026 from the sale of Sparkle Telecom, TIM's submarine cables network but its rating case does not include other extraordinary deleveraging measures. TIM could further reduce leverage if it receives compensation from a 1998 concession charge dispute that it has won in the first two of three Italian courts, raising the prospect of a resolution by end-2025. Governance to Stabilise: Fitch expects a stronger alignment and reduced conflicts among shareholders under the new structure. Poste Italiane S.p.A. is set to become TIM's majority shareholder, remaining at just below the 25% threshold for a mandatory tender offer. This follows stake swaps between the Italian postal services operator and Cassa Depositi e Prestiti SpA (CDP, BBB/Positive) and stake purchases from Vivendi SE. Since initiating the sale of its wireless network assets in 2024, TIM has adhered to its financial policy, enhanced its business profile and made progress with its deleveraging plan, which should continue under the new shareholding structure. Enterprise Leads on Growth: Fitch expects TIM's revenue and profitability increases to be primarily driven by its enterprise division. From 2025 to 2027, Fitch projects that average annual revenue will rise by 2%, aligning it with the lower end of company guidance. The fragmented competitive environment is likely to constrain consumer business expansion to below 1% a year to 2027. In contrast, Fitch anticipates the enterprise division will grow 4.5% annually, and at 1%-2% a year in Brazil, despite the steady depreciation of the local currency. Fitch forecasts TIM's EBITDA CAGR at 5% between 2025 and 2027, supported by gradual margin improvements. Peer Analysis TIM compares favourably with asset-light operators, like Nuuday A/S (B/Stable), mixed service providers, like Iliad SA (BB/Stable), and mobile-focused operators, such as Telefonica Deutschland Holding AG (TEF DE; BBB/Stable). TIM's operating profile is stronger than Nuuday's, due to its leading positions in domestic fixed retail and B2B channels, and its ownership of mobile networks in Italy and Brazil. Nuuday is a market leader in Denmark, but lacks network ownership, although, unlike TIM, it has no FX risk. TIM's domestic market share surpasses Iliad's, although the latter benefits from investments in fibre and mobile networks in France and has no FX risk. TIM's business profile is also broadly aligned with TEF DE's, as it is a leader in Italy, whereas TEF DE is one of the top three operators in its domestic market and relies more on wholesale revenues, leading to higher revenue and margin volatility, compared with TIM's solid retail position. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth (excluding Sparkle and FiberCop) of 1%-2% a year in 2025-2028 - Brazilian real to depreciate 6.5% in 2025 and 4% annually through 2028 - Fitch-defined EBITDA margin of 25% in 2025, gradually increasing to 27% in 2028 - Capex at 14% of revenue in 2025, decreasing to 13% in 2027 - Dividends of EUR350 million in 2026, EUR500 million in 2027 and EUR600 million in 2028 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Net debt/EBITDA consistently above 3.2x - Delays in achieving cost savings or tangible worsening of operating conditions leading to weaker profitability and FCF with CFO less capex/gross debt remaining weak structurally below 7% over the long term - Sustained competitive pressure in domestic mobile, fixed and enterprise divisions, driving large share losses in the domestic service revenue market - Material EBITDA contribution from Brazil substantially increasing the company's FX risk exposure - EBITDA/interest paid decreasing to below 4.5x Factors that Could, Individually or Collectively, Lead to an Outlook Revision to Stable - Net debt/EBITDA consistently above 2.7x - Delays in achieving cost savings or tangible worsening of operating conditions leading to weaker profitability and FCF - CFO less capex/gross debt remaining below 5% by 2027, and structurally below 7% over the long term Factors that Could, Individually or Collectively, Lead to Upgrade - CFO less capex/gross debt reaching 5% by 2027, with a structural trend towards 9%, reflecting a more dynamic revenue and profitability profile or lower capex without compromising its longer-term competitive position - Accelerated deleveraging by inorganic means (e.g. from asset divestments) - EBITDA contribution from domestic operations remaining above 50% with manageable exposure to Brazil, limiting FX risks Liquidity and Debt Structure As of end-1Q25, TIM's liquidity (consisting of cash and cash equivalents and securities other than investments) was about EUR3.8 billion, with undrawn committed facilities amounting to over EUR3 billion. The company has implemented a complex liability management exercise in connection with the disposal of NetCo, made additional debt repayments and may resize its revolving credit facility to match its operating scale after asset disposal. Cash reserves cover maturities up to at least 2027. TIM has flexibility to manage its refinancing needs, in view of its maturities coverage for 2025 and 2026 and a staggered profile for future debt maturities. Future dividend plans may affect liquidity and, consequently, TIM's refinancing needs for the next 12 to 18 months. Issuer Profile TIM is the incumbent telecom carrier in Italy, with leading market positions in fixed-line and mobile in its domestic market. The company owns 67% of the third-largest mobile operator in Brazil, TIM Brazil. 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 Fitch changed its ESG credit relevance score to '3' from '4' to reflect the expectation of stronger alignment and reduced conflicts between shareholders under the new shareholding structure. 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 ----------- ------ -------- ----- Telecom Italia Capital senior unsecured LT BB Affirmed RR4 BB Telecom Italia S.p.A. LT IDR BB Affirmed BB senior unsecured LT BB Affirmed RR4 BB Telecom Italia Finance SA senior unsecured LT BB Affirmed RR4 BB X3G MERGECO: Fitch Assigns BB-(EXP) LongTerm IDR, Outlook Negative ------------------------------------------------------------------ Fitch Ratings has assigned X3G Mergeco S.p.A. (X3) an expected Long-Term Issuer Default Rating (IDR) of 'BB-(EXP)' with a Negative Outlook. Fitch has also assigned X3's proposed EUR300 million issue of five-year senior secured notes an expected senior secured debt rating of 'BB-(EXP)' with a Recovery Rating of 'RR4'. X3 is a holding company established by ION Group to acquire Prelios S.p.A., an Italian debt servicer. The acquisition closed in July 2024. X3 will merge with Prelios after the planned bond issuance. Prelios will be the surviving legal entity. X3 holds 100% of Prelios's shares and has no other assets, besides intangibles stemming from the acquisition. The assignment of final ratings is contingent on the transaction's successful execution and on the receipt of final documents conforming to information already reviewed. Key Rating Drivers Leveraged Buyout, Negative Outlook: The rating reflects Prelios's expected leverage after the partial refinancing of X3's EUR600 million acquisition loan and X3's reverse merger into Prelios. Fitch expects gross debt to EBITDA ratio of 3.7x at end-2025 compared with 1.4x at end-2024. Leverage could then become the weakest link in X3's and Prelios's credit profiles, if it does not improve over Fitch's 12-to-18 months Outlook horizon. The Negative Outlook reflects this and indicates downside risks for the rating if deleveraging is slower than Fitch expects. Sound Domestic Franchise: X3's Long-Term IDR is based on Prelios's standalone creditworthiness and considers its strong franchise in real estate, providing intra-group benefits. The rating reflects also sound performance since its delisting and turnaround in 2018. In Fitch's view, debt servicing is a more stable business model than debt purchasing, because it allows for more predictable cash flow and requires low usage of the company's own balance sheet. Fitch expects that Italian debt servicers will benefit from improved volumes after the expiration of state aid, while banks will progressively dispose problem exposures at earlier stages. Real Estate-focused Company: Prelios is an Italian debt servicer, real estate fund manager and service provider. Debt servicing made up over 70% of its revenues and 85% of its EBITDA in 2024. Prelios has a long record in non-performing loans secured by RE and it expanded into unlikely-to-pay loans (UTPs). Fitch expects pressure on management's execution after the acquisition, to sustain EBITDA growth through operational efficiencies and intra-group synergies. Concentrated Business Model: Prelios widened its franchise in the last three years (e.g. new servicing agreement with UniCredit), but Intesa Sanpaolo S.p.A. (BBB/Positive) remains key for its business plan in the medium term. Concentration by single client is common in debt servicing but is reducing and is mitigated by the long tenors of its key contracts. Prelios's other businesses (alternative investment manager, real estate services) have a longer record, but remain small and provide only modest EBITDA diversification. Scalable Platform, Longer Execution Record: The UTP market is a fairly recent creation, where Fitch regards Prelios as having an early mover advantage and growing scale. Fitch believes Prelios is well-placed to benefit from anticipated growth in UTP loans, especially in relation to state guarantees issued during the pandemic. Servicing UTPs accounted for over 60% of EBITDA in 2024 and Fitch expects them to remain the highest contributor in the medium term. Sound, but Concentrated Earnings: Prelios returned to meaningful profitability in recent years following its corporate restructuring and its EBITDA margin (40% in 2024) compares well with peers. Fitch's assessment of profitability balances the facts that Prelios does not make upfront payments to gain new debt servicing mandates against an expected material increase in interest costs following the planned refinancing. Near-term Debt Maturities: X3 plans to refinance only EUR300 million of its acquisition loan and the remainder will mature in July 2027. This weighs on Fitch's assessment of X3's and Prelios's funding profile, although X3 could extend the loan's tenor by two years with the mutual consent of the banks. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Fitch will withdraw X3's ratings and rate Prelios upon completion of the reverse merger, because X3 will cease to exist and Prelios will be the surviving legal entity. Fitch expects to rate Prelios in line with X3 because Prelios's and X3's strategy, financial performance and risk profile are largely identical. - Failure to reduce X3's gross debt/EBITDA ratio below 3.5x, including making material progress in deleveraging during 2025, in line with Prelios's communicated strategy would trigger a downgrade. A decline in the interest coverage ratio to below 3x would also be rating negative. - A failure to timely refinance the remaining EUR300 million portion of the bank loan, well in advance of its maturity, would result in a downgrade of X3's Long-Term IDR. - The loss or material reduction of key servicing agreements, without compensating replacement, would lead to a downgrade of X3's Long-Term IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch would likely affirm X3's Long-Term IDR with a Stable Outlook if leverage (defined as gross debt to EBITDA) falls and is maintained below 3.5x. - Fitch could upgrade X3's Long-Term IDR by one notch if leverage falls and is maintained below 2.5x. - Other factors that could together support positive rating action on X3's Long-Term IDR are improved EBITDA diversification by single counterparty and a long-dated and diversified funding profile, if they are accompanied by continued sound financial performance. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS Debt Rating Aligned With IDR: Fitch rates X3's senior secured debt in line with the Long-Term IDR. This reflects that Prelios's large intangible assets are a material share of its total assets (over 45% at end-2024, expected to grow after the refinancing), which leads to only average recovery expectations, despite the bonds' secured nature. This is reflected in the 'RR4' Recovery Rating. Prelios will guarantee X3's borrowings upon completion of the bond issuance and until the reverse merger between itself and X3, when it will assume them directly on its own balance sheet. X3's proposed bond will rank pari passu with the remainder of X3's acquisition loan. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead To Negative Rating Action/Downgrade - The debt raising will be likely unaffected by the reverse merger of X3 into Prelios. - An upgrade of X3's Long-Term IDR would be mirrored in an upgrade of its debt rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A downgrade of X3's Long-Term IDR would be mirrored in a downgrade of its debt rating. - A perceived reduction in the recovery rates over X3's senior secured debt, due to material changes to the covenant package or to a material layer of more senior debt (contractually or structurally), could lead to notching X3's senior secured debt rating below X3's IDR. ADJUSTMENTS The business profile score has been assigned below the implied score due to the following adjustment reasons: accounting policies (negative), business model (negative). The capitalization & leverage score has been assigned below the implied score due to the following adjustment reason: historical and future metrics (negative). The funding, liquidity & coverage score has been assigned below the implied score due to the following adjustment reason: historical and future metrics (negative). Public Ratings with Credit Linkage to other ratings X3's ratings are linked to Fitch's assessment of the credit quality of Prelios, into which X3 will merge following the proposed bond issuance. ESG Considerations X3 has an ESG Relevance Score for Customer Welfare of '4'. In Fitch's view, Prelios's business model as credit servicer exposes it to regulatory changes (like lending caps) and conduct-related risks. These issues have a moderately negative impact on the credit profile and are relevant to the rating in conjunction with other factors. X3 has an ESG Relevance Scores of '4' for Financial Transparency and Group Structure. This reflects limited visibility on the composition of Prelios's balance sheet, including goodwill and financial liabilities, following its reverse merger with X3. 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, either due to their nature or the way in which they are being managed. 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 ----------- ------ -------- X3G Mergeco S.p.A. LT IDR BB-(EXP) Expected Rating ST IDR B(EXP) Expected Rating senior secured LT BB-(EXP) Expected Rating RR4 X3G MERGECO: S&P Assigns Preliminary 'B+' LT ICR, Outlook Stable ---------------------------------------------------------------- S&P Global RAtings assigned a preliminary 'B+' long-term rating to X3G MergeCo SpA (Prelios), the holding company set-up to acquire Prelios and which is expected to merge with Prelios. The preliminary 'B+' rating on X3G MergeCo (Prelios) is conditional upon the successful completion of the Ion Platform transaction and the resulting improvement of the group's credit profile. S&P said, "The stable outlook reflects our view that Prelios will continue to be a strategically important subsidiary within Ion and will maintain its leverage between 4.0x-5.0x. "We also assigned a preliminary 'B+' issue-rating to the EUR300 million senior secured notes issued by X3G MergeCo (Prelios). Rationale "We anticipate that Prelios' leverage ratio will range between 4.0x-5.0x in 2025 and 2026. We expect that Ion will be able and willing to maintain Prelios' level of debt at about EUR600 million over the next 12-18 months. We understand Ion's intention to use part of the proceeds resulting from the issuance of senior secured notes at Prelios' level in 2025 to repay the EUR600 million credit facilities opened to initially finance Prelios' acquisition. We forecast that Prelios' EBITDA margin will gradually increase to about 45% in 2026, up from the 40% we calculate at end-2024. The continuous revenue increase, operating costs control, and costs synergies after the acquisition starting to materialize will drive the improvement." Prelios will operate as a leading player in the Italian credit servicing market, supporting revenue growth in 2025 and 2026. S&P said, "We expect that Prelios' positioning as major privately-owned player in the domestic unlikely-to-pay market will remain the main driver of the entity's revenues and EBITDA in 2025 and 2026. We anticipate the 10- and six-year unlikely-to-pay servicing contracts with Intesa Sanpaolo SpA and UniCredit SpA, the two largest banking players in Italy, respectively as constituting the base for an important inflow of recurring revenues in the future. As of end-2024, unlikely-to-pay management business line constituted about 60% of Prelios' EBITDA. We also anticipate that Prelios will remain a relevant player in the more mature nonperforming exposures market in Italy, contributing over 20%% to Prelios' EBITDA as of end-2024, while diversifying in the real estate market." S&P said, "As a fully owned subsidiary within Ion, we see Prelios' final creditworthiness as linked to the one of the overall group. This is because we think that Ion can directly control Prelios' strategy and financial policy, therefore being in the position of potentially affecting negative influence on Prelios' current superior stand-alone creditworthiness--corresponding to a 'bb-' SACP--in case of need or financial distress. "The stable outlook reflects our view that Prelios will maintain its leading position in the domestic credit servicing market and will keep its leverage between 4.0x-5.0x over the next 12-18 months. It also reflects our view that it will continue to operate as a strategic subsidiary within Ion. "We could downgrade Prelios over the next 12 months if Prelios' financial policy were to be more aggressive than currently expected, materializing in a leverage ratio--measured as debt to EBITDA--sustainably above 5.0x. We could also lower our ratings on Prelios over the same time if we realized that the Ion Platform transaction was not to be completed as expected. Finally, we could consider a downgrade if Prelios were not able to fully refinance the outstanding bridge loan before the maturity date. "Although highly unlikely at this stage, we could consider an upgrade following a similar action on the group." =================== L U X E M B O U R G =================== ALTISOURCE PORTFOLIO: Deer Park, 5 Others Hold 13.5% Stake ---------------------------------------------------------- Deer Park Road Management Company, LP, Deer Park Road Management GP, LLC, Deer Park Road Corp, Craig-Scheckman Michael, AgateCreek LLC, and Burg Scott Edward disclosed in a Schedule 13D (Amendment No. 10) filed with the U.S. Securities and Exchange Commission that as of February 2, 2023, they collectively beneficially owned 11,818,763 shares of Altisource Portfolio Solutions S.A.'s common stock, par value $0.01 per share, representing 13.5% of the outstanding common stock based on 87,589,517 shares outstanding as of April 28, 2025, as disclosed in the Company's Form 10-Q filed on May 1, 2025. These reporting persons may be reached through: Bradley W. Craig 1195 Bangtail Way, Steamboat Springs, CO, 80487 Tel: (970) 457-4340 A full-text copy of Deer Park's SEC report is available at: https://tinyurl.com/4zyz7ttf About Altisource Headquartered in Luxembourg, Altisource Portfolio Solutions S.A. -- https://www.Altisource.com/ -- is an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets it serves. As of March 31, 2025, Altisource Portfolio Solutions had $145.7 million in total assets, $264.7 billion in total liabilities, and total stockholders' deficit of $119 million. * * * In March 2025. S&P Global Ratings raised its Company credit rating on Altisource Portfolio Solutions S.A. to 'CCC+' from 'SD'. S&P said, "We also assigned our 'B' issue-level rating and '1' recovery rating to the new $12.5 million senior secured debt (super senior facility), 'CCC-' issue-level rating and '6' recovery rating to the new $160 million senior subordinated debt (new first lien loan), and withdrew our ratings on the company's exchanged senior secured term loan, which was rated 'D'. "The stable outlook reflects our expectation that over the next 12 months, while we expect Altisource to generate positive cash flow from operations, we believe its liquidity will remain constrained and the company will remain dependent on favorable financial and economic conditions to meet its financial commitments. AURORA 2024 SARL: S&P Assigns 'B' LongTerm ICR, Outlook Stable -------------------------------------------------------------- S&P Global Ratings assigned its 'B' long-term issuer credit rating to Aurora 2024 S.a.r.l. (also known as ADB Safegate), ADB's new reporting entity. At the same time, S&P assigned its 'B' issue rating to the proposed EUR500 million term loan B (TLB). The recovery rating is '3', indicating its expectation of average (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The stable outlook reflects S&P's view that ADB will post at least 5% revenue growth in 2025 and 2026 and further gradually improve profitability to 17% in 2026, resulting in S&P Global Ratings-adjusted debt to EBITDA below 6.5x and funds from operations (FFO) cash interest coverage of at least 2x by mid-2026. ADB is seeking to issue a seven-year EUR500 million term loan B and raise a new EUR100 million revolving credit facility (RCF). It has also raised EUR184 million in equity from its existing and new shareholders and a EUR100 million payment-in-kind (PIK) note to refinance its upcoming debt maturities. S&P said, "In our base-case scenario, we expect ADB's strong orderbook and robust underlying market dynamics will boost its revenue to about EUR575 million in 2025 and EUR604 million in 2026, from EUR543 million in 2024. We also forecast that higher volumes and better cost management will enable the company to increase its S&P Global Ratings-adjusted EBITDA margin to about 16.0%-17.5% in 2025 and 2026 from 14.6% in 2024. "We expect ADB will use the proposed refinancing to address near-term maturities, a key rating risk factor. The refinancing package includes the issuance of a new EUR500 million TLB along with the raise of a EUR100 million RCF (undrawn at closing) and a EUR85 million guarantee facility. The proposed new term loan B is due in seven years, and the RCF and the guarantee facility mature in 6.5 years. As part of the refinancing, ADB has raised EUR184 million in equity from its shareholders and EUR100 million from the issuance of a new PIK note, that we treat as debt-like, noting that it is held by third parties. ADB will use the proceeds of the new term loan, equity, the PIK issuance, and some surplus cash on balance sheet, to repay its existing term debt. This debt mainly comprises first-lien notes of EUR477 million maturing in 2026 and second-lien debt of EUR164 million maturing in 2027. As a result, the transaction eliminates the short-term refinancing risk and supports the company's liquidity and financial flexibility. We note that preference shares of about EUR175 million are also present in the capital structure. We treat these as equity and exclude them from our leverage and coverage calculations. This is because we understand that there is an alignment of interest between non-common and common equity holders. The treatment of the preference shares is subject, however, to our satisfactory review of the final documentation, which we have not yet received." The company's strong orderbook and robust underlying market dynamics should underpin sales growth in 2025 and 2026. In 2024, ADB's revenue increased by 15.7% to EUR543 million from EUR469 million in 2023. This was mainly driven by ongoing air traffic growth, but also the company's ability to gain more market share in the U.S., the Middle East, and Australia due to its competitive offering. S&P expects ADB's revenue to continue to rise by 6% to about EUR575 million in financial year 2025 (FY2025; ending Dec. 31) and to about EUR604 million in FY2026, supported by its high order book of about EUR570 million as per the end of March 2025, and positive secular trends in the passenger air traffic market. The company's profitability recovered significantly in 2024, with the S&P Global Ratings-adjusted EBITDA margin increasing to 14.6% (compared with 11.3% in 2023), spurred by higher volumes and higher margins on large orders. For 2025, S&P forecasts the company's EBITDA margin will further improve--thanks to expanding revenue and lower exceptional costs and continued cost controls--reaching about 16% in 2025 and 17.0%-17.5% in 2026. Higher revenue and stronger margins resulted in ADB's S&P Global Ratings-adjusted free operating cash flow (FOCF) improving to positive EUR11 million in 2024 from negative EUR21 million in 2023. S&P said, "For 2025, we forecast FOCF will remain broadly neutral, primarily due to a substantial increase in capital expenditures (capex) driven largely by investments in a new building, as well as elevated working capital outflows. In 2026, we anticipate FOCF will improve to EUR25 million- EUR30 million, supported by enhanced margins, normalized capex, and lower cash interest payments." S&P said, "We forecast that ADB's S&P Global Ratings-adjusted debt to EBITDA will decrease to about 6.9x pro forma the transaction. The transaction will reduce ADB's gross financial debt (including the PIK) to about EUR610 million in 2025 from EUR725 million in 2024. This, in combination with our expectation of the improving operating performance, will materially reduce the company's leverage. We forecast S&P Global Ratings-adjusted debt to EBITDA will improve to 6.9x in 2025 from 9.5x in 2024. We expect this positive trend in operating performance to continue, leading to adjusted debt to EBITDA of below 6.5x in mid-2026. "We recognize there are economic uncertainties due to U.S. government and tariff implementation. ADB generates about 30% of its revenue in the U.S. S&P Global Ratings believes there is a high degree of unpredictability around policy implementation by the U.S. administration and possible responses--specifically regarding tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. As a result, our baseline forecasts carry a degree of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential and actual policy shifts and reassess our guidance accordingly. While the precise impact of the proposed tariffs remains uncertain, we believe the company's manufacturing footprint in the U.S. provides a degree of insulation through its local-for-local production model. That said, based on the management's preliminary assessment of a 145% tariff rate on China (which has now been paused), the estimated impact of tariffs on its reported EBITDA is EUR2 million- EUR3 million in 2025. "We assume the final documentation and the final terms will not differ materially, and therefore will not result in any changes that would materially affect our base case. If we do not receive the final documentation within a reasonable timeframe, or if the final documentation and final terms of the transaction depart from the materials and terms reviewed, we reserve the right to revise the ratings. Potential changes include, but are not limited to, the utilization of proceeds, maturity, size and conditions of the facilities, financial and other covenants, security, and ranking. "The stable outlook reflects our view that ADB will post at least 5% revenue growth in 2025 and 2026 and further gradually improve profitability to 17% in 2026, resulting in S&P Global Ratings-adjusted debt to EBITDA below 6.5x and FFO cash interest coverage of at least 2x by mid-2026." S&P could lower the ratings if: -- An adverse market development causes ADB's revenue to underperform our expectation and margins to decline below 14%; -- S&P Global Ratings-adjusted debt to EBITDA is expected to remain above 6.5x over a prolonged period due to significant acquisitions, weaker operating performance, or dividend distributions; or -- FFO cash interest coverage is expected to remain below 2x in 2026. Although unlikely in the near term, S&P could consider taking a positive rating action if ADB increases its scale and footprint significantly, and further expands its market shares, while generating EBITDA margins above 18% on a sustainable basis. An upgrade would also hinge on ADB's adjusted debt to EBITDA declining sustainably to about 5x. EP BCO: S&P Puts 'BB-' LongTerm ICR on Watch Negative ----------------------------------------------------- S&P Global Ratings placed its 'BB-' long-term issuer credit rating and issue ratings on port operator EP Bco S.A. on CreditWatch with negative implications. S&P could lower the ratings if the heightened market volatility persists or if it expected operating performance to weaken, leading to deteriorating projected financial metrics--specifically, if funds from operations (FFO) to debt falls below 8% or debt to EBITDA rises above 6.5x. EP Bco's credit metrics will decline without strong EBITDA growth in 2025 and 2026. S&P said, "Our previous financial projections included robust cash flow from organic business growth, which supported stable credit metrics despite high maintenance capital expenditure. However, achieving this organic growth given economic slowdown and supply chain disruptions following the U.S.'s imposition of tariffs, will be more challenging. Our sensitivity analysis indicates that our 'BB-' rating has little-to-no financial cushion to absorb revenue declines, increasing the likelihood of a downgrade to 'B+' if underperformance occurs. Nevertheless, liquidity remains adequate and there is no refinancing risk in the medium term." Operating performance could deteriorate through several channels. S&P said, "We consider a material decline in the logistics business to be the most significant risk, given its strong correlation with global trade. We expect it to contract slightly by 0.1%, even as European trade remains marginally positive. Additionally, effects from tariff shocks and the broader reconfiguration of global trade could directly reduce port volumes or indirectly weigh on performance by undermining business and financial confidence, increasing investor risk aversion, and disrupting supply chains and capital investment in the ports' European partners. "We see minimal room to curb capital expenditure or adjust dividend distributions to help offset potential demand risks in 2025. As a result, we think credit conditions have significantly deteriorated and are challenging our base case forecast and increasing the likelihood of a downgrade. We will take a negative rating action if the heightened market volatility persists or weighted-average funds from operations (FFO) to debt falls below 8% and debt to EBITDA rises above 6.5x over the next three years. Early 2025 performance shows improvement, but sustainability is still unclear. EP Bco's first-quarter performance in 2025 showed a positive start following weaker-than-expected results in 2024. Traded volumes at the terminals rose 11% year-over-year, supported by the essential nature of the cargo handled--primarily commodities, which tend to show greater resilience during periods of global trade disruption due to their nondiscretionary demand. The company generated approximately EUR30 million in reported EBITDA during the quarter, reflecting some recovery in operating efficiency. However, while these initial results are encouraging, we are not certain the EP Bco can maintain the momentum. S&P's base-case assumption incorporates a 7% year-on-year volume increase and 9% revenue growth for 2025, which now appears at risk amid ongoing trade and economic volatility. S&P will continue to monitor performance closely to assess whether this early growth trend will continue. The change in shareholders limits visibility on the strategy. S&P said, "We understand that the current shareholders may be considering selling their 53.4% ownership of EP BCo. We also await visibility on the potential change in the shareholding structure and any implications for the business, financials, and governance." The CreditWatch placement reflects the heightened credit risk for EP BCo given the economic slowdown and potential supply chain disruptions. S&P could lower the ratings if it was to expect weaker traded volumes or margins, resulting in deteriorating credit metrics, leading to weighted average funds from operations (FFO) to debt falling below 8%, and debt to EBITDA rising above 6.5x over the next three years. ===================== N E T H E R L A N D S ===================== SUEDZUCKER INT'L: S&P Rates New EUR700MM Sub. Hybrid Notes 'BB' --------------------------------------------------------------- S&P Global Ratings assigned its 'BB' long-term issue rating to the proposed EUR700 million undated subordinated hybrid notes that Suedzucker International Finance B.V. (BBB-/Stable/A-3) plans to issue. Suedzucker will use the proceeds from the instrument to refinance its outstanding EUR700 million undated deeply subordinated perpetual hybrid notes issued in 2005. S&P consequently no longer consider the existing hybrid notes to have equity content and we anticipate they will be fully repaid when the transaction closes. The proposed notes would carry intermediate equity content from issuance date until 2030, 20 years before the second step-up in 2050 of 100 basis points (bps). During this period, the notes would meet S&P's criteria in terms of ability to absorb losses or conserve cash if needed. Germany-based agriculture group, Suedzucker AG, through its wholly owned financing subsidiary Suedzucker International Finance B.V., plans to issue EUR700 million perpetual subordinated hybrid notes. The proceeds of the notes will be used to refinance, through a tender offer, the company's outstanding EUR700 million perpetual deeply subordinated hybrid notes. S&P said, "We note that the draft documentation indicates that the proposed hybrid notes will have priority ranking over all outstanding hybrid notes and ordinary shares but would be subordinated to senior debt. We also note the proposed hybrid notes do not contain a maintenance financial covenant like in the previous instrument, which would trigger the mandatory deferral of interest if the ratio of cash flow to revenue falls below 5%. The company was marginally compliant with that covenant in 2025, as was the case at the time of the severe sugar price downcycle in 2018-2019. "We derive our 'BB' issue rating on the proposed hybrid notes by notching down from our 'BBB-' long-term issuer credit rating on the group's parent and guarantor Suedzucker." The two-notch difference reflects: -- A one-notch deduction because of the contractual deep subordination of the notes and that the rating on Suedzucker is 'BBB-'; and -- An additional one-notch deduction to reflect the interest payment flexibility, since the deferral is at the option of the issuer. In S&P's view, Suedzucker is relatively unlikely to defer interest on the hybrid notes. Should our view change and we see the issuer as highly likely to defer, we may notch down further to derive the issue rating. S&P said, "Furthermore, to capture our view of intermediate equity content, we consider 50% of the related payments on the proposed notes as a fixed charge (interest expenses) and 50% as equivalent to a common dividend, in line with our hybrid capital criteria. The hybrid's principal and accrued interest are treated as 50% debt and 50% equity in our calculation of Suedzucker's adjusted debt. "Key factors in our assessment of the proposed hybrid's permanence The notes do not have a legal maturity date. That said, they can be called at any time in the period from three months from the first reset date (5.25 years from issuance) and for events regarded as external or remote (change in tax, accounting, law, rating methodology, or change of control, following prior purchase of at least 75% of the originally issued securities). In addition, Suedzucker can also purchase the notes in the open market at any time, in which case they may be cancelled. "In our view, the risk of early redemption is mitigated by the group's financial policy commitment to deleveraging and by its intention and track record of maintaining hybrid instruments in its capital structure or replacing them with equivalent instruments in terms of equity credit, as is the case with this transaction. We understand that the hybrid securities represent an important feature of Suedzucker's deleveraging strategy. "We understand the interest to be paid on the proposed notes will increase by 25 bps after the first step-up date in 2035, 10.25 years after issuance; then, by 100 bps on the second step-up date in 2050. We view the 100-bps step-up as an economic incentive to redeem the instrument; as such, we treat the date of the second step-up in 2050 as the instrument's effective maturity date. We estimate that the amount of issued hybrid notes will not exceed 15% of the group's capitalization." Key factors in S&P's assessment of the proposed hybrids' deferability S&P said, "In our view, Suedzucker's option to defer payment on the proposed notes is discretionary. This means the issuer may elect not to pay accrued interest on an interest payment date because doing so is not an event of default, and there are no cross defaults with senior debt instruments. However, any outstanding deferred interest payment will have to be settled in cash if Suedzucker declares or pays an equity dividend, or redeems shares of equally ranking securities. This condition is in line with our criteria because, once the issuer has settled the deferred amount, it can still choose to defer on the next interest payment date." Key factors in S&P's assessment of the proposed hybrid's subordination The proposed hybrid notes and coupon are intended to constitute Suedzucker's direct, unsecured, and subordinated obligations, ranking senior only to common shares and deeply subordinated financial obligations; currently there are no instruments other than the outstanding hybrid instrument, which S&P expects will no longer be in the capital structure after the transaction closes. TRIVIUM PACKAGING: S&P Rates New Senior Secured Notes 'B' --------------------------------------------------------- S&P Global Ratings assigned its 'B' issue rating and '3' recovery rating to Trivium Packaging B.V.'s proposed five-year senior secured notes (split into $700 million and EUR500 million tranches). At the same time, S&P assigned its 'CCC+' issue rating and '6' recovery rating to Trivium Packaging B.V.'s proposed five-year $700 million second-lien secured notes. The proposed facilities are issued by the group financing subsidiary, Trivium Packaging Finance B.V. Trivium Packaging intends to use the proceeds from the issuance to refinance existing senior and second-lien debt facilities. Therefore, S&P considers the transaction leverage neutral, with no effect on its 'B' long-term issuer credit rating on the company. Trivium Packaging is a Netherlands-based metal packaging manufacturer operating 49 plants in 18 countries across Europe, North America, and South America. ========= S P A I N ========= PRISA: S&P Affirms 'B-' LongTerm ICR on Concluded Refinancing ------------------------------------------------------------- S&P Global Ratings affirmed its long-term issuer credit rating on Spain-based Promotora de Informaciones S.A. (Prisa) at 'B-'. The stable outlook reflects S&P's expectation of Prisa's sound performance over the next 12 months, translating into breakeven FOCF after leases by 2026, and adequate liquidity. Prisa concluded the amend and extend (A&E) transaction on its capital structure. This included the repayment of its remaining junior debt, debt maturities extension by three years to 2029 on all remaining super senior and senior term loans, the upsize of its outstanding super senior debt by EUR10 million to EUR250 million and establishing a new EUR40 million super senior revolving credit facility (RCF). S&P said, "We view that the company extended debt maturities before they became current, and provided compensation for that by increasing interest margins, and repaid its junior debt at par as positive. "We expect Prisa's revenues to expand in 2025-2026 driven by the growth of its educational business in Latin America and sound demand for its learning materials and services. This will translate into broadly stable earnings, as well as gradually improving free operating cash flows (FOCF) after leases that should become break even by 2026, and adjusted debt to EBITDA at about 6.0x and EBITDA interest coverage of above 1.5x in 2025-2026. "The rating affirmation follows the concluded A&E transaction and reflects our expectation that Prisa's increasing revenue and earnings will support stable leverage and improving cash flows. On May 9, 2025, Prisa agreed with its lenders to extend debt maturities by three years to 2029 from 2026, fully repay the EUR40 million junior debt and upsized the outstanding super senior facilities by EUR10 million (the total super senior commitments increased by EUR50 million to EUR290 million). This reduced its refinancing and liquidity risks." The new capital structure consists of: -- Super senior facilities, which include EUR40 million fully undrawn newly established RCF and upsized super senior term facility of EUR250 million, all due June 30, 2029; and -- Unchanged EUR575 million senior loan facility, due Dec. 31, 2029. S&P said, "Prisa's cash paying debt increased only marginally by EUR10 million to EUR825 million. We forecast that S&P Global Ratings-adjusted debt will decline by the end of 2025 reflecting conversion of mandatory convertible notes (MCNs) year to date May 2025 (about EUR55 million) into common equity. Therefore, we expect that adjusted leverage will remain about 6.0x in 2025-2026. We also forecast that Prisa's FOCF after lease payments will be negative in 2025, as it includes one-time refinancing costs, but we expect it to become break-even by 2026. "We view the A&E transaction as opportunistic under our criteria. Prisa extended maturities before they became current and in our view was not facing any near-term pressure on its liquidity. It has also increased interest margins on the super senior and senior secured debt by 0.25%. In addition, the junior debt was repaid at par. We note that Prisa has increased its super senior debt commitments by EUR50 million to EUR290 million (the drawn super senior debt inceased by EUR10 million), but we view this increase as trivial in the context of the total amount of financial debt. "Prisa's free cash flow after leases should become breakeven by 2026. This comes one year later than we previously expected. This reflects our expectations of slightly lower EBITDA in 2025 due to capitalized development costs in the educational business and higher interest payments under the new capital structure, reflecting refinancing costs, a EUR10 million increase in the drawn debt, and full repayment of junior debt, that had cash interest 3% over Euro Interbank Offered Rate (EURIBOR) and 5% payment-in-kind interest over EURIBOR. In 2026, we expect growing earnings and lower interest payments to translate into FOCF after leases breaking even. "We consider that Prisa's educational business has solid medium-term growth prospects. Over five years, the company intends to harness its strong market positions in Latin American K-12 educational markets supported by the ongoing digitalization of these markets. Prisa aims to expand its subscriber base within its private market sales operations. We forecast that subscriptions will increase steadily by about 8%-9%; the company reached 3.2 million subscriptions in the first quarter of 2025, an 8% increase compared with the same period in 2024. Although sales to public markets tend to be more volatile due to possible delays in sales, we expect Prisa to continue to perform well in this segment. Public markets, chiefly schools, depend on public budgets, the macroeconomic situation, curriculum reforms, and governmental decisions regarding renewals and novelties in each country. That said, in our view, Prisa has offset this volatility, in part, by its geographical diversity--it is present in 19 local markets in Latin America. "Prisa reports in euros and nearly all its debt is denominated in euros. It is therefore subject to a currency mismatch that exposes its capital structure to foreign currency exchange volatility. We forecast that earnings from Latin America will contribute more than 70% of adjusted EBITDA in the coming years. The group's local currency earnings are converted to euros and upstreamed as dividends to Prisa; this is the largest of the cash streams that Prisa uses to service its debt. "The stable outlook reflects our expectation that Prisa's revenue and earnings will gradually increase over the next 12 months driven by growth in the educational business, lower severance, and interest payments. The outlook also reflects our expectation that the company's FOCF after lease payments will break even in 2026, and that the company's liquidity position remains adequate. "We could lower the ratings if Prisa's operating performance falls short of our base case, such that its FOCF turns persistently negative and EBITDA interest coverage falls below 1.5x, making its capital structure unsustainable. We could also lower the rating if the covenant headroom tightens resulting in weaker liquidity position. "We consider an upgrade to be remote. Over the longer term, we could raise the rating if Prisa were to materially outperform our base case, such that it generated solid positive FOCF, translating into FOCF to debt above 5%, while reducing leverage sustainably below 6.0x. In addition, an upgrade would require sound covenant headroom and adequate liquidity." VALENCIA: S&P Affirms 'BB/B' ICR & Alters Outlook to Stable ----------------------------------------------------------- S&P Global Ratings, on May 16, 2025, revised the outlook on Valencia to stable from positive and affirmed its long- and short-term issuer credit ratings at 'BB/B'. Outlook S&P said, "The stable outlook reflects our view that, despite Valencia's very weak budgetary performance and increasing tax-supported debt, we expect the Spanish central government to continue to provide sufficient financial support, mitigating the risk that the region's very high tax-supported debt ratio would otherwise imply." Downside scenario S&P said, "We could lower the rating on Valencia if we thought the central government's willingness or ability to provide financial support was in question, this support proved insufficient, or we had doubts about its timeliness and effectiveness. We could also lower the rating on Valencia if the regional government's willingness to improve budgetary performance metrics waned, leading to a weaker performance than we forecast." Upside scenario S&P said, "We could raise the rating on Valencia, if we expected a structural improvement of the regions budgetary metrics, for example through a meaningful reform of the regional financing system, or in absence of a reform, increasing and recurrent ad-hoc revenues for Valencia, that would address its underfinancing. In this context, the region's deleveraging path would accelerate beyond our current expectations. "We could also take a positive action if Valencia's exposure to commercial lenders materially decreases, thanks to continued government funding." Rationale S&P said, "We revised the outlook on Valencia to stable from positive as we think that there are fewer possibilities that the region will benefit from a reform of the financing system or received additional recurring transfers from the central government to tackle Valencia's underfunding. We think that in the absence of such reform or additional resources for Valencia, the region will continue to post structural deficits, and its debt will continue to accumulate, potentially constraining its creditworthiness." Additionally, Valencia will face further budgetary pressures in 2025. Valencia's revenues from the regional financing system will increase to a lesser extent than what they received over 2023 and 2024, due to the working of the regional financing system. At the same time, Valencia has included an additional EUR2,364 million in its 2025 budget to reconstruct Valencia after the devastating natural disaster the region suffered in October 2024 due to the severe flooding. S&P said, "The institutional framework is now less predictable, and a reform of the financing system remains overdue, but ongoing central government support mitigates the potential consequences Despite strong ongoing support from the central government to Spanish normal status regions, we now view the system as less predictable. The current political complexity and fragmentation at the central government level means that the relationship between the central government and regions has become less stable, with bilateral political agreements replacing institutionalized approaches. We note that the lack of approved central government budget so far in both 2024 and 2025 has led to delays in the update of advances from the regional financing system. These delays mean that Valencia has received about EUR163 million less revenues per month in 2025 than what they should. This is creating intra-year liquidity pressures, challenging the regions liquidity management. Nevertheless in 2024, advances were updated in the second half of the year, and we expect the same to occur in 2025." The central government has continued to provide financial support to the region of Valencia. The region asked the central government for several advance payments of the settlement that the regional financing system generated in 2023, which affects revenues in 2025. This allowed the region to pay its suppliers and commercial debt. Therefore, despite political uncertainty, central government support to Valencia is not in question, in S&P's view. A reform of the regional financing system remains overdue since 2014, with Valencia being one of the regions that is affected the most. The region's weak performance partially stems from a less favorable revenue outcome from the current regional financing system. The fragmented political landscape at the central government level alongside the weaker predictability of the system, makes a reform of the system less likely in the next two years in S&P's view. Nevertheless, Valencia's financing needs, including budgetary deficits will continue to be financed mostly through central government funding. The central government has proposed to partly absorb normal status regions' debt, citing insufficient funding of the regions during the financial crisis of 2010-2013. According to this proposal Valencia could benefit from an absorption of EUR11.2 billion (or about 18% of our estimated outstanding tax-supported debt at year end 2025). This measure would also result in interest expenditure savings, which have not been quantified yet. However, this proposal needs to be approved in the Spanish parliament by absolute majority, and given the current political fragmentation in the national parliament such approval is not guaranteed. S&P said, "We also note that during parliamentary debates, the proposal could be subject to possible changes both in terms of the amounts or the share of individual regions. And if finally approved by law, regions would individually decide whether to adhere to the debt absorption. We lack clarity and visibility on these matters and therefore do not include any assumption in our current forecast figures." S&P also thinks that a potential debt absorption would only benefit Valencia in the short term, but if the regional financing system is not updated to address structural imbalances, Valencia's debt would continue to accumulate. Valencia's economy faces challenges as the region has weaker sociodemographic indicators, with below average GDP per capita than the national average, and high levels of unemployment when compared to international peers (12.6% in 2024). In 2024, the region's GDP increased by 2.8% according to regional statistics, below the national average, owing to the impact of the severe flooding in the region. Nevertheless, Valencia's GDP growth in 2025 will be supported by the large investment spending in the region in infrastructure to recover from the severe flooding, while at the same time Valencia continues to accelerate EU funds. Valencia's economy should also be supported by the tourism performance, which remains robust. In 2024, Valencia received a record high level of 12 million of international tourists, which is 14% higher than those in 2023. Deficits will remain large, while debt will continue to accumulate and liquidity remains weak, absent any additional recurring transfers from the central government Valencia posted weak budgetary performance results in 2024, although they reduced its operating deficit to 7.0% of operating revenues from 9.9% in 2023. An increase of 12.1% of operating revenues in 2024 drives this improvement. S&P views this increase in revenues as extraordinary and driven mainly by high resources from the regional financing system, which included a EUR2.6 billion settlement from the year 2022, which affected the 2024 budget. S&P said, "We expect Valencia to continue to post large deficits over the forecast period, particularly in 2025 as the region will have to face one-off expenditures related to the reconstruction of the most affected areas by the severe flooding. The region has estimated these costs at EUR2,364 million, included in their 2025 budget. We understand that most of these expenses will be funded through the central government liquidity facilities, although some EU funds could be eligible to cover these costs." Additionally, performance will also be weaker because the region's revenues from the financing system will increase by 3.9%, less than in the past two years. In 2026 and 2027, absence of a reform of the financing system or additional recurrent revenues from the central government, S&P forecasts Valencia will post large operating deficits, owing to its underfunding and spending pressures, particularly in health care and education. S&P said, "We continue to view Valencia's management as weak compared to peers. While part of its deficits stem from its underfinancing, we observe the region's financial management has expanded operating expenditures materially over the past years." The new administration no longer includes in its budget claims to the central government for the amount it considered it should receive upon reform of the regional financing system. Nevertheless, its management has elaborated the 2025 budget assuming a deficit of about 1.15% of GDP, above the reference rate set by the ministry of 0.1%, while its spending growth rate is set at 3.2%, which is in compliance with the EU's spending rule target for 2025. Capital spending should also remain high as the region has yet to spend about 50% of the allocated Recovery and Resilience Facility funds before mid-year 2026 and accelerate their EU 21-27 spending program over the forecast period. Valencia's tax supported debt is very high in an international context, at 297% of consolidated operating revenues at end-2024. Valencia's debt includes EUR193 million of government-related entities (GREs)'s debt, which represents a decline when compared to 2023, as the region has absorbed the debt of its GRE EPSAR - Entidad Publica de Saneamiento de Aguas and a loan of the Finance Institute of Valencia. We expect Valencia's debt to continue to increase as the region continues to post large deficits over the forecast period. Nevertheless, about 90% of Valencia's debt is in hands of the central government, which mitigates refinancing risks. S&P estimates Valencia's financing needs at about EUR10.4 billion in 2025, and its expect the region to cover its needs through central government liquidity mechanisms. These borrowing needs include EUR1.8 billion of costs related to the severe flooding, while the remaining EUR476 million will likely come through in 2026. The region has also refinanced EUR1.8 billion of loans with the central government and substituted these with bank loans, with the purpose of saving on interest payments. Valencia's debt is somehow shielded from interest rate volatility as more than 90% of its debt is at fixed rates. However, its continued debt accumulation has translated into a rising interest burden, which S&P estimates could reach 5.4% of operating revenues by the end of 2025. Valencia's liquidity is weak and remains a constraint to its creditworthiness. Nevertheless, the region has recurrent access to financial institutions financing, which it uses to cover its short-term needs. Valencia has EUR730 million of signed credit lines and has signed a loan with the European Investment Bank. Moreover, the region can use central government liquidity facilities to cover for all its needs, including budgetary deficits. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List Ratings Affirmed Valencia (Autonomous Community of) Senior Unsecured BB Commercial Paper B Ratings Affirmed; Outlook Action To From Valencia (Autonomous Community of) Issuer Credit Rating BB/Stable/B BB/Positive/B ===================== S W I T Z E R L A N D ===================== AVOLTA AG: S&P Rates New EUR500MM Senior Unsecured Notes 'BB+' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue rating and '3' recovery rating to travel retailer Avolta AG's (BB+/Stable/--) proposed EUR500 million seven-year senior unsecured notes. In S&P's view, this transaction is leverage neutral. It understands Avolta will use the proceeds to refinance its Swiss franc (CHF) 300 million unsecured notes due 2026 and repay drawings on its revolving credit facility. The proposed EUR500 million senior unsecured notes will rank pari passu with Avolta's existing senior unsecured debt. S&P's 'BB+' long-term issuer credit rating and stable outlook on the company are unchanged, as are its 'BB+' issue rating and '3' recovery rating on its existing notes. Issue Rating -- Recovery Analysis Key analytical factors -- S&P rates the proposed EUR500 million senior unsecured notes to be issued by Dufry One B.V., the fully owned financial subsidiary of Avolta, 'BB+' with a '3' recovery rating, indicating its expectation of meaningful recovery (50%-70%; rounded estimate: 65%) in a default scenario. -- Although the recovery outcome exceeds 65%, S&P's criteria cap the recovery rating on the debt at '3' due to their unsecured nature. This accounts for the risk that additional prior-ranking or equally ranking debt could be raised on the path to default. -- The issue rating is in line with the issuer credit rating on Avolta and the issue rating on its existing senior unsecured notes. -- The notes are guaranteed by the parent, Avolta AG, and selected subsidiaries. -- Debt in the waterfall scenario includes a CHF500 million 0.75% convertible notes due in March 2026, EUR750 million 2.0% notes due in February 2027, EUR725 million 3.375% notes due in April 2028, EUR500 million 4.75% notes due 2031, and the proposed EUR500 million notes due 2032. -- In S&P's hypothetical default scenario, it assumes negative regulatory changes and reduced airport travel following a natural disaster or terrorist event, combined with a recession in Europe and the U.S. -- S&P values the business as a going concern, given Avolta's leading market position in the duty-free travel retail market and its diverse global footprint. Simulated default assumptions -- Year of default: 2030 -- Jurisdiction: Switzerland Simplified waterfall -- EBITDA at emergence: CHF630 million -- Implied enterprise value multiple: 6.0x -- Gross enterprise value (EV) at default: CHF3.8 billion -- Net EV after administrative costs (5%): CHF3.6 billion -- Priority claims: CHF144.6 million -- Estimated senior unsecured claim: CHF4.8 billion -- Value available for senior secured claims: CHF3.4 billion --Recovery expectations: 50%-70% (rounded estimate: 65%) --Recovery rating: 3 All debt amounts include six months of prepetition interest. The EUR2.25 billion revolving credit facility is assumed drawn at 85% at default. GATEGROUP HOLDING: S&P Puts 'B-' ICR on CreditWatch Positive ------------------------------------------------------------ S&P Global Ratings placed its 'B-' issuer credit rating on airline caterer gategroup Holding on CreditWatch positive and assigned a 'B+' issue rating to the proposed term loan B, which is to be issued by gategroup Finance International S.a.r.l., a finance and core subsidiary of gategroup Holding AG. gategroup Holding AG plans to issue a Swiss franc (CHF) 1 billion-equivalent term loan B and use most of the proceeds to repay debt maturing during 2026. S&P said, "It is also in the process of amending its shareholder loan, as a result of which we would treat that loan as equity. Given the shareholders' commitment to reducing leverage at gategroup, we anticipate that the S&P Global Ratings-adjusted weighted-average ratio of debt to EBITDA for 2025-2026 will fall below 5.0x." If the transaction closes as planned, the company's capital structure and liquidity position will significantly improve. S&P said, "The CreditWatch placement is based on our view that if the proposed transaction closes as planned and our forecast adjusted debt to EBITDA for 2025-2026 declines below 5.0x on a weighted-average basis, we would likely raise our long-term issuer credit rating on the company to 'B+' from 'B-'. We expect to resolve the CreditWatch placement once the transaction has been completed and the term loan has been successfully issued. Final ratings will depend on our receipt and satisfactory review of all final documentation, including the terms of the term loan B and the amendment to the shareholder loan. "We placed gategroup on CreditWatch positive after it announced its plan to issue a new CHF1 billion-equivalent term loan B. The issuance proceeds (which will be denominated in euros and U.S. dollars) will be used to repay a term loan A and drawings under the existing revolving credit facility (RCF), both of which are due in October 2026, and the company plans to repay the debt facility it accessed under the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act and French government-guaranteed bank loans, received under a COVID-19 support program. At the same time, gategroup intends to sign a new RCF of up to CHF300 million, which will be undrawn at closing. We also understand that the amendments made to gategroup's shareholder loan will cause us to treat it as equity, in line with our criteria on "Methodology For Assessing Financing Contributed By Controlling Shareholders," May 15, 2025. Therefore, we now exclude it from our calculation of adjusted debt. "Pro forma the transaction, we consider gategroup's adjusted debt to EBITDA to be commensurate with an aggressive financial risk profile. The company has demonstrated its capacity and commitment to reducing leverage. Our base-case for 2025-2026 assumes that gategroup's performance will continue to improve due to gradual increases in passenger numbers, top-line volumes and rates, and EBITDA. We forecast that adjusted EBITDA (after restructuring costs) will rise to CHF400 million-CHF450 million in 2025 and then to CHF450 million-CHF500 million in 2026. This implies that the company will be able to sustain positive free operating cash flow (FOCF) after lease payments. Pro forma the transaction, we estimate that gross adjusted debt will decrease to about CHF2.2 billion in 2025, from about CHF2.8 billion in 2024, and thus that adjusted leverage will be about 5.2x in 2025, before dropping to about 4.6x in 2026. We view this as commensurate with a 'B+' rating, especially given that the term loan B documentation caps additional leverage at the opening level and the company's shareholder remuneration has historically been limited. "Final ratings will depend on our receipt and satisfactory review of all final documentation, including the terms of the term loan B and the amendment to the shareholder loan. "The CreditWatch placement is based on our view that if the proposed transaction closes as planned and our forecast adjusted debt to EBITDA for 2025-2026 declines below 5.0x on a weighted-average basis, we would likely raise our long-term issuer credit rating on the company to 'B+' from 'B-'. We expect to resolve the CreditWatch placement once the transaction has been completed and the term loan has been successfully issued. "In contrast, we would remove the rating from CreditWatch and likely affirm it at 'B-' if the transaction does not complete as expected." SELECTA GROUP: S&P Cuts Second-Lien Credit Facility Rating to 'D' ----------------------------------------------------------------- S&P Global Ratings lowered its issue-level rating on Selecta Group B.V.'s second-lien credit facility to 'D' (default) from 'C'. At time same time, S&P affirmed its issuer credit rating (ICR) on Selecta Group at 'SD' (selective default) along with its 'D' (default) issue rating on the company's first-lien debt. Selecta Group has entered a binding agreement with its financial stakeholders to reduce its debt by about EUR1.1 billion as part of a restructuring and recapitalization plan that includes EUR330 million of new funding. The remaining debt's maturity will be extended to the second half of 2030. The group's ownership of the group will be transferred from KKR to senior creditors who are said to be supportive long-term institutional investors. The new funding will refinance the group's existing RCF and provide additional liquidity. The transaction is expected to close in the second-quarter of 2025, subject to regulatory approvals and other processes. S&P said, "We view the recapitalization as a distressed exchange and tantamount to a default because lenders will receive less than the original promise. This is why we lowered the rating on the second lien debt to 'D'. We had lowered our ICR on Selecta Group to 'SD' (selective default), along with our 'D' ratings on the first-lien debt and 'CCC' ratings on the super senior RCF, in February 2025 following the initial missed interest payment. We expect the group to repay the RCF in full." =========================== U N I T E D K I N G D O M =========================== CAMELOT UK: S&P Rates Proposed $500MM First-Lien Add-On 'BB-' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating and '3' recovery rating to Camelot UK Holdco Ltd.'s (dba Clarivate) proposed $500 million first-lien term loan add-on due 2031. (The borrower of the debt is Camelot subsidiary Camelot Finance S.A.) The '3' recovery rating indicates its expectation for meaningful (50%-70% rounded estimate: 65%) recovery in the event of a payment default. The company plans to use the proceeds to refinance $500 million of the $700 million senior secured notes due in 2026. S&P expectd the company will address the remaining $200 million in notes later this year. S&P said, "Our 'BB-' issuer credit rating and negative outlook on the company remain unchanged because we view this transaction as leverage neutral. We forecast leverage will remain above 5x in 2025 because a slowdown in transaction activity has negatively affected operating performance. We expect modest revenue declines in 2025, largely due to the disposal of its targeted transactional business as management executes on its strategy to become less reliant on transactional activity. However, we still expect the company will generate solid free operating cash flow (FOCF), which we anticipate will be used to repurchase shares, repay debt, and invest in the business." Issue Ratings--Recovery Analysis Key analytical factors -- S&P's simulated default scenario assumes a payment default occurring in 2029 due to a confluence of factors, including financial strain from high leverage, increased price competition, or product innovation from existing or new competitors that lowers its renewal rates; a data integrity failure that hurts the company's brand and reputation; or weaker operating performance due to operational missteps. -- S&P believes Clarivate's lenders would pursue a reorganization rather than a liquidation in a hypothetical default due to its curated proprietary databases, established customer relationships, and high proportion of subscription-based revenue. -- Clarivate's proposed pari passu senior secured debt capital structure comprises a $700 million revolving credit facility due in 2029, a $2.5 billion term loan due in 2031, $200 million of notes due in 2026, and $921 million of notes due 2028. Its unsecured debt comprises $921 million of notes due 2029. -- Camelot Finance S.A. and the U.S. borrowers--subsidiaries of Clarivate--are the borrowers of the senior secured notes due in 2026, the secured revolver due in 2027, and the proposed term loan B due in 2031. Clarivate Science Holding Corp., a subsidiary of Clarivate, is the issuer of the secured notes due 2028 and the unsecured notes due 2029. The secured debt is secured on a first-priority basis by the borrowers' and guarantors' capital stock and tangible and intangible assets. S&P estimates the guarantor subsidiaries account for roughly 80% of the company's EBITDA in its analysis. S&P's analysis assumes any bankruptcy proceedings would take place in the U.S and not include, or be influenced by, foreign jurisdiction or regimes. -- Other default assumptions include an 85% draw on the revolving credit facility, the U.S. dollar benchmark rate is 2.5%, and all debt amounts include six months of prepetition interest Simulated default assumptions -- Year of default: 2029 -- EBITDA at emergence: about $489 million -- Implied enterprise value multiple: 6.5x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $3.0 billion -- Net value available to creditors: $2.8 billion -- Estimated senior secured debt claims: $4.3 billion --Recovery expectations: 50%-70% (rounded estimate: 65%) -- Estimated senior unsecured debt claims: $944 million --Recovery expectations: 0%-10% (rounded estimate: 5%) CASTELL 2025-1: DBRS Gives Prov. B Rating on Class F Notes ---------------------------------------------------------- DBRS Ratings Limited assigned provisional credit ratings to the residential mortgage-backed notes to be issued by Castell 2025-1 PLC (the Issuer) as follows: -- Class A Notes at (P) AAA (sf) -- Class B Notes at (P) AA (low) (sf) -- Class C Notes at (P) A (low) (sf) -- Class D Notes at (P) BBB (low) (sf) -- Class E Notes at (P) BB (low) (sf) -- Class F Notes at (P) B (sf) -- Class X1 Notes at (P) BB (high) (sf) The provisional credit rating on the Class A Notes addresses the timely payment of interest and the ultimate repayment of principal on or before the final maturity date in January 2062. The provisional credit ratings on the Class B, Class C, Class D, Class E, and Class F Notes address the timely payment of interest once they are the senior-most class of notes outstanding, otherwise the ultimate payment of interest and the ultimate repayment of principal on or before the final maturity date. The provisional credit rating on the Class X1 Notes addresses the ultimate payment of interest and principal. Morningstar DBRS does not rate the Class G, Class H, and Class X2 Notes or the residual certificates also expected to be issued in this transaction. CREDIT RATING RATIONALE The Issuer is a bankruptcy-remote, special-purpose vehicle incorporated in England and Wales. The notes will fund the purchase of UK second-lien mortgage loans originated by UK Mortgage Lending Limited (UKMLL). Pepper (UK) Limited (Pepper) is the primary and special servicer of the portfolio. UKMLL, established in November 2013 as Optimum Credit Limited, is a specialist provider of second-lien mortgages based in Cardiff, Wales. Both UKMLL and Pepper are part of the Pepper Group Limited, a worldwide consumer finance business, third-party loan servicer, and asset manager. Law Debenture Corporate Services Limited will be appointed as the backup servicer facilitator for the transaction. The provisional mortgage portfolio consists of GBP 287.3 million in second-lien owner-occupied mortgages secured by properties in the UK. The transaction is expected to include a prefunding mechanism where the seller has the option to sell the mortgage loans to the Issuer subject to certain conditions to prevent a material deterioration in credit quality (the Conditions for Acquisition of Additional Mortgage Loans). As of the 31 March 2025 reference date, the mortgages loans expected to be acquired in this transaction amounted to GBP 51.0 million. The acquisition of these assets will occur before the second interest payment date using the proceeds standing to the credit of the prefunding reserves. Any funds that are not applied to purchase additional loans will flow through the pre-enforcement principal priority of payments and pay down the rated notes on a pro rata basis. The Issuer is expected to issue eight tranches of collateralized mortgage-backed securities (the Class A Notes as well as the Class B, Class C, Class D, Class E, Class F, Class G, and Class H Notes) to finance the purchase of the portfolio and the prefunding principal reserve ledger at closing. The Issuer is also expected to issue two classes of noncollateralized notes, the Class X1 and Class X2 Notes. The transaction is structured to initially provide 24.60% of credit enhancement to the Class A Notes comprising subordination of the Class B to Class H Notes. The transaction features a fixed-to-floating interest rate swap, given the significant portion of fixed-rate loans (with a compulsory reversion to floating in the future), while the liabilities will pay a coupon linked to the daily compounded Sterling Overnight Index Average. The swap counterparty to be appointed at closing will be Lloyds Bank Corporate Markets PLC (Lloyds). Based on Morningstar DBRS' private credit rating on Lloyds, the downgrade provisions outlined in the documents, and the transaction's structural mitigants, Morningstar DBRS considers the risk arising from the exposure to Lloyds to be consistent with the provisional credit ratings assigned to the rated notes as described in Morningstar DBRS' "Legal and Derivative Criteria for European Structured Finance Transactions" methodology. Citibank N.A./London Branch will act as the Issuer Account Bank and National Westminster Bank Plc will be appointed as the Collection Account Bank. Morningstar DBRS privately rates both entities and considers them to meet the eligible credit ratings in structured finance transactions and to be consistent with the provisional credit ratings assigned to the rated notes as described in Morningstar DBRS' "Legal and Derivative Criteria for European Structured Finance Transactions" methodology. Liquidity support is provided by a liquidity reserve fund (LRF), which will cover senior costs and expenses as well as interest shortfalls on the Class A and Class B Notes. The LRF is sized at 1.0% of the Class A and Class B Notes, and amortizes in line with these notes with no triggers. In addition, principal borrowing is also envisaged under the transaction documentation and can be used to cover senior costs and expenses as well as interest shortfalls on the Class A to Class H Notes; however, this will be subject to a principal deficiency ledger (PDL) condition which states that, if a given class of notes is not the most senior class outstanding, when a PDL debit of more than 10% of such class exists, principal borrowing will not be available. Interest shortfalls on the Class B to Class H Notes, as long as they are not the most senior class outstanding, will be deferred and will not be recorded as an event of default until the final maturity date or such earlier date on which the notes are fully redeemed. Morningstar DBRS based its provisional credit ratings on a review of the following analytical considerations: -- The transaction's capital structure, including the form and sufficiency of available credit enhancement. -- The credit quality of the provisional mortgage portfolio and the ability of the servicer to perform collection and resolution activities. Morningstar DBRS estimated stress-level probability of default (PD), loss given default (LGD), and expected losses (EL) on the mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as inputs into the cash flow engine. Morningstar DBRS analyzed the mortgage portfolio in accordance with its "European RMBS Insight Methodology". -- The transaction's ability to withstand stressed cash flow assumptions and repay the Class A, Class B, Class C, Class D, Class E, Class F, and Class X1 Notes according to the terms of the transaction documents. -- The structural mitigants in place to avoid potential payment disruptions caused by operational risk, such as a downgrade, and replacement language in the transaction documents. -- The sovereign credit rating of AA with a Stable trend on the United Kingdom of Great Britain and Northern Ireland as of the date of this press release. -- The expected consistency of the transaction's legal structure with Morningstar DBRS' "Legal and Derivative Criteria for European Structured Finance Transactions" methodology and the presence of legal opinions that are expected to address the assignment of the assets to the Issuer. Morningstar DBRS' credit ratings on the rated notes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations for each of the rated notes are the related interest amounts and the related class balances. Morningstar DBRS' credit ratings on the rated notes also address the credit risk associated with the increased rate of interest applicable to each of the rated notes if the rated notes are not redeemed on the Optional Redemption Date (as defined in and) in accordance with the applicable transaction documents. Notes: All figures are in British pound sterling unless otherwise noted. CONTROL SOLUTIONS: Redman Nichols Named as Administrators --------------------------------------------------------- Control Solutions & Pipework Services Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in Leeds, Insolvency and Companies List, Court Number: CR-2025-LDS-000464, and John William Butler and Andrew James Nichols of Redman Nichols Butler were appointed as administrators on March 8, 2025. Control Solutions engaged in business support services. Its registered office is at The Chapel, Bridge Street, Driffield, YO25 6DA Its principal trading address is at Unit 6 Brunel Way, Stroudwater Business Park, Stonehouse, GL10 3SX The joint administrators can be reached at: John William Butler Andrew James Nichols Redman Nichols Butler The Chapel, Bridge Street Driffield, YO25 6DA For further details, contact: Ann Banks Tel No: 01377 257788 ENDEAVOUR MINING: Fitch Rates New USD500MM Unsec. Notes 'BB(EXP)' ----------------------------------------------------------------- Fitch Ratings has assigned Endeavour Mining plc's (BB/Stable) proposed USD500 million senior unsecured notes an expected senior unsecured rating of 'BB(EXP)'. The Recovery Rating is 'RR4'. The proceeds will be used for a tender offer for Endeavour's outstanding USD500 million senior unsecured notes, due October 2026. The notes will be guaranteed by a number of intermediate holding companies and rank pari passu with the group's revolving credit facility (RCF). Endeavour's rating balances its strong financial and business profiles with a weaker operating environment, reflecting the group's focus on west African countries. The group's credit profile otherwise compares favourably with higher-rated peers', with a production guidance for 2025 of 1.11 million-1.26 million ounces and growth towards 1.5 million ounces by 2030. It also benefits from all in sustaining costs (AISC) within the second quartile (on average, across mines globally), a reserve life of 10.5 years for mines in operation, and a conservative net debt/EBITDA target at or below 0.5x through the cycle. Key Rating Drivers Strong Gold Demand Continues: Endeavour delivered strong earnings in 1Q25 with a production of 341,000 oz and Fitch-adjusted EBITDA of USD612 million. Fitch-adjusted net debt declined to USD387.8 million. Gold prices remain above USD3,000/oz, even though global trade tensions seem to be easing. Fitch therefore believes EBITDA for 2025 could expand towards USD2 billion. Fitch expects the company to use higher free cash flow (FCF) generation over the coming quarters for incremental debt reduction and higher shareholder returns (including the USD52 million of share buybacks disclosed in the 1Q25 results). Conservative Financial Policy: Endeavour's financial policy aims for net debt/EBITDA at below 0.5x through the cycle. The group may exceed this target during capital-intensive growth as long as there is a clear deleveraging path after the commissioning of those assets. Organic Growth in Focus: Endeavour spends around USD75 million on exploration a year. At end-2024, the group declared 4.1 million oz of maiden reserves for its Assafou greenfield project and is working towards a final investment decision. Construction could potentially start in 2H26. The drilling programme at the Ity mine led to an addition of 1.2 million oz of reserves. The group also has many smaller capital projects to optimise existing assets, including schemes that contribute towards decarbonisation, such as the USD55 million solar plant that was commissioned at Sabodala-Massawa in early 2025. Industry Costs on the Rise: Major gold producers have guided towards higher AISC due to cost pressures, declining grades, and higher royalties linked to rising gold prices. Endeavour reported AISC of USD1,218/oz for 2024 and guides towards USD1,150-1,350/oz for 2025, which remains competitive compared with the top 10 global producers. It is broadly comparable with Agnico Eagle Mines Limited's, and visibly stronger than Kinross Gold Corporation's or AngloGold Ashanti plc's. Fitch expects Endeavour to remain in the second cost quartile on average across mines worldwide. The most recent benchmarking of global cost curves is not yet available. Cote d'Ivoire Country Ceiling Applied: EBITDA from operations in Cote d'Ivoire comfortably covers hard-currency gross interest expense over the medium term. Therefore, Fitch applies Cote d'Ivoire's Country Ceiling of 'BB' in line with Fitch's Corporate Rating Criteria. Peer Analysis Endeavour's guided production of 1.11 million oz-1.26 million oz in 2025 is lower than Kinross Gold Corporation's (BBB/Stable) with 2 million gold-equivalent oz (gold and silver) or AngloGold Ashanti plc's (AGA; BBB-/Stable) with a consolidated production of 2.6 million oz-2.9 million oz. Endeavour has a stronger cost position, with AISC guidance for 2025 of USD1,150/oz-USD1,350/oz versus Kinross's USD1,500/oz and AGA's USD1,600/oz-USD1,725/oz. Reserve life is stronger for Endeavour, with 15.6 years based on total reserves (10.5 years for operating mines), compared with 9.7 years for AGA and 10.9 years for Kinross. All three companies have conservative capital structures, while Endeavour faces higher country risk. The weak operating environment in west Africa, where all its assets are located, constrains the rating. In comparison, Kinross derives close to 25% of production from Mauritania in west Africa, 29% from Brazil, over 10% from Chile, and more than 30% from the US, while AGA has over 50% of its production based in Africa (diversified across various countries), 23% in Australia, and below 20% in South America. Key Assumptions - Gold prices in line with Fitch's price deck at USD2,400/oz in 2025, USD2,100/oz in 2026, USD2,000/oz in 2027, and USD1,800/oz in 2028 - Gold production in 2025 at the mid-point of the 1.11 million oz-1.26 million oz guidance and at the higher end of this range in subsequent years - AISC for 2025 towards the lower end of management guidance of USD1,150/oz-USD1,350/oz, flat in 2026, and incrementally lower for 2027 and 2028 (based on Fitch's price assumptions detailed above). Royalties form part of AISC and vary according to gold price; if prices remain at or above USD3,000/oz, actual reported AISC will be higher, as royalties will be higher at that gold price - Capex of USD515 million for 2025 and below USD500 million on average in subsequent years, including capitalised exploration expenditure and stripping costs - Dividends of USD225 million and share buybacks of at or above USD52 million in 2025; USD225 million of dividends in 2026 and 2027; and USD100 million in 2027 (linked to lower price deck assumptions), given that the dividend policy is based on gold prices at or above USD1,850/oz and the assumption of Endeavour's robust financial position. Also, the current dividend policy has been set for financial years 2024 and 2025 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Negative rating action on Cote d'Ivoire's sovereign - EBITDA margin below 30% on a sustained basis - EBITDA gross leverage above 2.3x or net leverage above 2.0x on a sustained basis - EBITDA interest coverage below 7.0x on a sustained basis - Political risks, labour disputes or other disruptions eroding cash flow generation for an extended period - Sustained negative FCF due to dividends or share buybacks - Failure to address major refinancing needs at least nine months in advance Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Assuming a majority of earnings in the rating case (based on Fitch's gold price assumptions) are derived from Cote d'Ivoire over the medium term, a positive rating action on Cote d'Ivoire that leads to a higher applicable Country Ceiling together with - Ability to maintain reserve life above 10 years and AISC comfortably in the second quartile of the global cost curve - EBITDA gross leverage below 1.3x or net leverage below 1.0x on a sustained basis - EBITDA interest coverage above 9.0x on a sustained basis - EBITDA margin above 40% on a sustained basis and positive FCF during times without material expansion capex Liquidity and Debt Structure As of end-March 2025, Endeavour held USD737.2 million of cash and USD215 million of an undrawn RCF that is available until November 2028. Its short-term debt was USD40 million. Given that its major expansion projects were concluded in 3Q24, the group will use positive FCF to reduce net debt in 2025 and beyond until the next greenfield project investment decision. Issuer Profile Endeavour is a major international gold producer, with annual production of 1.1 million oz-1.3 million oz over the medium term, and the largest in west Africa. Date of Relevant Committee 27 March 2025 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 ----------- ------ -------- Endeavour Mining plc senior unsecured LT BB(EXP) Expected Rating RR4 ENDEAVOUR MINING: S&P Rates New $500MM Senior Unsecured Notes 'BB-' ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' rating to the proposed $500 million senior unsecured notes due 2030 issued by gold miner Endeavour Mining PLC (BB-/Negative/--). S&P understands Endeavour will use the proceeds to refinance the existing $500 million senior notes due October 2026. Therefore, the issuance does not affect its issuer credit ratings on Endeavour Mining because it is neutral to its view of the company's overall financial risk while improving its funding diversification and access to credit markets. Neither does the issuance affect our negative outlook on the long-term rating. Elevated country risks in several jurisdictions where Endeavour Mining operates drive the negative outlook. Political and security risks remain elevated in Burkina Faso, notably since the 2022 coup. Another type of country risk emerged more recently, in February 2025, upon the restatement of Senegal's fiscal deficit and debt figures to fundamentally weaker levels than previously assumed, meaning that Senegal's fiscal consolidation path could be subject to significant implementation risks, which could complicate expected financing plans for the sovereign. S&P Global Ratings may review its outlook on Endeavour should the situation in both countries stabilize. S&P rates Endeavour Mining's new senior unsecured issuance 'BB-', in line with the long-term issuer credit rating (and with the refinanced instrument). There is no other substantial priority debt in the capital structure that, in its view, would create subordination risk for the senior unsecured debt. Endeavour Mining is the largest gold producer in West Africa and among the top 10 gold miners in the world, with production of 1.1 million ounces in fiscal year 2024. In 2024, it fully operated five gold mines in West Africa: two in Burkina Faso (Houndé and Mana), one in Côte d'Ivoire (Ity, the most profitable), and one in Senegal (Sabodala-Massawa, the largest). The fifth mine, Lafigue mine (Côte d'Ivoire), poured its first gold June 28, 2024, and has been operating at full capacity since, with a production guidance of 180,000-210,000 ounces for fiscal 2025. In 2024, 39% of production was from Burkina Faso, trending down to about 35% as guided for fiscal 2025; the share from Cote d'Ivoire is trending up, to about 43% in fiscal 2025 from 40% in fiscal 2024. Endeavour Mining is listed on the London Stock Exchange and Toronto Stock Exchange. The shares are held broadly, with the largest shareholder being investment vehicle La Mancha with a 15.1% stake. GREENSWARD SPORTS: Quantuma Advisory Named as Administrators ------------------------------------------------------------ Greensward Sports Consultancy Ltd was placed into administration proceedings in the Business and Property Courts in England & Wales Court Number: CR-2025-002998, and Nicholas Charles Simmonds and Chris Newell of Quantuma Advisory Limited were appointed as administrators on May 14, 2025. Greensward Sports engaged in landscape service activities. Its registered office is at Unit 23, Leafield Industrial Estate, Neston, Corsham, SN13 9RS and it is in the process of being changed to 1st Floor, 21 Station Road, Watford, Hertfordshire, WD17 1AP Its principal trading address is at Monkton Combe Mill, Monkton Combe, Bath, BA2 7HD The joint administrators can be reached at: Nicholas Charles Simmonds Chris Newell Quantuma Advisory Limited 1st Floor, 21 Station Road Watford, Herts, WD17 1AP For further details, please contact: Michelle Oliver-Tomlinson Tel No: 01923 954 173 Email: Michelle.Oliver-Tomlinson@quantuma.com HYPERION TECHNOLOGIES: Menzies LLP Named as Administrators ---------------------------------------------------------- Hyperion Technologies Ltd was placed into administration proceedings in the The High Court of Justice, Court Number: CR-2025-003038, and Giuseppe Parla and Laurence Pagden of Menzies LLP were appointed as administrators on May 1, 2025. Hyperion Technologies engaged in data processing & domestic software development. Its registered office is at Menzies LLP, 4th Floor, 95 Gresham Street, London, EC2V 7AB Its principal trading address is at 85 Great Portland Street, First Floor, London, W1W 7LT The administrators can be reached at: Giuseppe Parla Laurence Pagden Menzies LLP, 4th Floor 95 Gresham Street London, EC2V 7AB For further information, contact: The Administrators Email: OLo@menzies.co.uk Tel: +44 (0) 3309 129453 Alternative contact: Olivia Lo LANE BRITTON: SPK Financial Named as Administrators --------------------------------------------------- Lane Britton and Jenkins Limited was placed into administration proceedings in the High Court of Justice, the Business and Property Courts in Leeds, No CR-2025 LDS- 000481, and Stuart Kelly and Claire Harsley of SPK Financial Solutions Limited were appointed as administrators on May 14, 2025. Lane Britton engaged in development of building projects. The Company's registered office and principal trading address is at 16 Royal Crescent, Cheltenham, GL50 3DA. The joint administrators can be reached at: Stuart Kelly Claire Harsley SPK Financial Solutions Limited 7 Smithford Walk Prescot Liverpool L35 1SF For further details, contact: Olivia Farley Tel No: 0151 739 2398 Email: info@spkfs.co.uk ONQOR GROUP: SPK Financial Named as Administrators -------------------------------------------------- Onqor Group Investments Holdings Ltd was placed into administration proceedings in the High Court of Justice, the Business and Property Courts in Leeds, No CR 2025 - LDS- 000483, and Stuart Kelly and Claire Harsley of SPK Financial Solutions Limited were appointed as administrators on May 14, 2025. Onqor Group engaged in business and domestic software development. The Company's registered office and Principal trading address is at 19 North Street, Ashford, Kent, TN24 8LF. The joint administrators can be reached at: Stuart Kelly Claire Harsley SPK Financial Solutions Limited 7 Smithford Walk Prescot Liverpool L35 1SF For further details, contact: Olivia Farley Tel No: 0151 739 2398 Email: info@spkfs.co.uk OXFORD CANNABINOID: Rushtons Insolvency Named as Administrators --------------------------------------------------------------- Oxford Cannabinoid Technologies Holdings Plc was placed into administration proceedings In the High Court of Justice Business and Property Courts in Leeds, Insolvency and Companies List (ChD), Court Number: CR-2025-000454, and Nicola Baker of Rushtons Insolvency Limited was appointed as administrators on May 2, 2025. Oxford Cannabinoid engaged in pharmaceuticals and scientific research. Its registered office and principal trading address is at Prama House, 267 Banbury Road, Oxford, OX2 7HT. The joint administrators can be reached at: Nicola Baker Rushtons Insolvency Limited 6 Festival Building Ashley Lane, Saltaire, BD17 7DQ For further details, contact: Nicola Baker Tel No: 01274 598 585 Email: dwolski@rustonifs.co.uk Alternative contact: Dominic Wolski RISKALLIANCE DIRECT: Parker Andrews Named as Administrators ----------------------------------------------------------- Riskalliance Direct Limited was placed into administration proceedings in the High Court of Justice, Court Number: CR-2025-003260, and Grace Jones and David Perkins of Parker Andrews Limited were appointed as administrators on May 13, 2025. Riskalliance Direct is an insurance broker. The Company's registered office is at Unit 4 Wilmington Close, Watford, WD18 0FQ will shortly be changed to c/o Parker Andrews Limited, 5th Floor, The Union Building, 51-59 Rose Lane, Norwich, NR1 1BY Its principal trading address is at Unit 4 Wilmington Close, Watford, WD18 0FQ The joint administrators can be reached at: Grace Jones David Perkins Parker Andrews Limited 5th Floor, The Union Building 51-59 Rose Lane, Norwich NR1 1BY For further information, contact: Mark Middlemas Email: mark.middlemas@parkerandrews.co.uk Tel: 01603 284284 SALEEM VENTURES: FRP Advisory Named as Administrators ----------------------------------------------------- Saleem Ventures Ltd was placed into administration proceedings in the High Court of Justice, Court Number: CR-2025-002612, and Miles Needham and Simon Carvill-Biggs of FRP Advisory Trading Limited were appointed as administrators on April 25, 2025. Saleem Ventures engaged in the buying and selling of own real estate; other letting and operating of own or leased real estate; and other business support service activities not elsewhere classified. The Company's registered office is at The Dale, Catherine-De-Barnes Lane, Bickenhill, Solihull, B92 0DB in the process of being changed to c/o FRP Advisory Trading Limited, 4 Beaconsfield Road, St Albans, Hertfordshire, AL1 3RD Its principal trading address is at The Dale, Catherine-De-Barnes Lane, Bickenhill, Solihull, B92 0DB The joint administrators can be reached at: Miles Needham Simon Carvill-Biggs FRP Advisory Trading Limited 4 Beaconsfield Road, St Albans Hertfordshire, AL1 3RD For further details, contact: James Case Email: cp.stalbans@frpadvisory.com UPMARKET LEISURE: Begbies Traynor Named as Administrators --------------------------------------------------------- Upmarket Leisure Ltd was placed into administration proceedings In the High Court of Justice Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number: CR-2025-000630, and Dean Watson and Paul Stanley of Begbies Traynor (Central) LLP were appointed as administrators on April 29, 2025. Upmarket Leisure traded as Gino D'Acampo Restaurants; 360 Sky Bar; Luciano By Gino D'Acampo; and Radio Rooftop London. It is a licensed restaurant. Its registered office is at Ridgefield House 4th Floor, 14 John Dalton Street, Manchester, Lancashire, M2 6JR Its principal trading address is at Old Hall Street, Liverpool, L3 9LQ; 6-8 Boar Lane, Leeds, LS1 6ET; 1 First Street, Manchester, M15 4RP; 336-337 The Strand, London, WC2R 1HA; River View, Newcastle upon Tyne, NE1 3BE The joint administrators can be reached at: Dean Watson Paul Stanley Begbies Traynor (Central) LLP 340 Deansgate Manchester M3 4LY For further details, contact: Abigail Smith Begbies Traynor (Central) LLP Email: Abigail.Smith@btguk.com Tel No: 0161 837 1700 VICTORIA PLC: S&P Cuts ICR to 'CCC+' on Increasing Refinancing Risk ------------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Victoria PLC, U.K.-headquartered flooring products manufacturer and distributor, to 'CCC+' from 'B-' and its issue rating on Victoria's EUR739 million bonds to 'CCC+', with the recovery rating unchanged at '3', indicating its expectation of 50%-70% recovery (rounded estimate 55%) in the event of a default. The negative outlook indicates that S&P could lower its ratings if it expects the company to face a default scenario, including a distressed debt exchange. S&P said, "The downgrade reflects our view that Victoria faces increasing pressure to refinance its upcoming debt maturities in 2026 in a timely manner, given volatile credit market conditions. The group currently faces large debt maturities within the next 18 months, with its GBP150 million RCF due in February 2026 and the first EUR489 million tranche of its EUR739 million bond due in August 2026. In our view, the refinancing depends largely on favorable business, financial, and economic conditions. At present, volatility in credit market conditions creates pressure on Victoria to carry out a timely refinancing. At the same time, for fiscal 2025, Victoria's results are expected to remain significantly challenged, with an expected revenue decline of close to 13% (including the impact from the disposal of Graniser) and S&P Global Ratings-adjusted EBITDA of GBP105 million-GBP110 million, down from GBP162 million in fiscal 2024. This corresponds to estimated S&P Global Ratings-adjusted debt to EBITDA--including preference shares with noncash interest treated as debt--exceeding 11x (or 8x excluding the preference shares). This is higher than our previous forecast of adjusted leverage at 9.5x-10.0x. Overall demand for flooring has remained depressed because the anticipated uptick of housing transactions and recovery of consumer discretionary spending has not materialized across almost all end markets in the past year. We now expect FOCF to remain negative in fiscal 2025 by GBP5 million-GBP10 million, with capital expenditure (capex) remaining high at GBP55 million-GBP60 million along with a working capital outflow, and EBITDA interest coverage lower than 1.5x. "We assume Victoria's recovery in operating performance will take time, given low visibility on demand in end markets and operating cost inflation. Under our new base case, we assume revenue growth will remain stagnant at about 0.5% in fiscal 2026, since a recovery of volumes remains uncertain. There have been some initial positive signs in the U.K. business since January this year, with successive monthly improvements in year-on-year revenue because housing transactions have picked up slightly, corresponding to consumers' increased discretionary spending on flooring products. However, this trend has not yet stabilized, and we still view the trajectory of growth as uncertain. We forecast adjusted EBITDA at GBP120 million-GBP125 million. This should be supported by Victoria's operational reorganization projects, which have been ongoing since the first half of fiscal 2025 and will likely help maintain the group's profitability as the operating environment remains volatile. These include ongoing centralization of procurement and at the same time the reorganization and integration of manufacturing and production within operating divisions." Victoria's liquidity position has deteriorated given the size of near-term debt maturities and negative FOCF generation forecast for fiscal 2025. S&P said, "Victoria's RCF matures in February 2026, therefore by our methodology we do not include the available RCF as a source of liquidity because it matures in less than 12 months. This in our view constrains the liquidity position." As such, the group's liquidity position is entirely supported by its cash holdings of GBP93 million as of Sept. 28, 2024, along with estimated positive cash funds from operations (FFO) of GBP43 million. Negative FOCF expected in fiscal 2025 will likely hinder Victoria's liquidity position over the next 12 months because there is limited financial flexibility. S&P said, "The negative outlook reflects our view that Victoria faces significant refinancing risks associated with its upcoming debt maturities in 2026, given volatility in credit market conditions. "We could lower our ratings on Victoria if we expect the company to face a default scenario, including a distressed debt exchange. "We could revise the outlook to stable or raise the rating if the company is able to successfully refinance its near-term debt instruments. At the same time, rating upside is contingent on the company showing recovery in its operating performance, such that FOCF is better than in our base case and there is a sustainable deleveraging trend thanks to an improved top line and profitability." ********* 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 * * *