250613.mbx

250613.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, June 13, 2025, Vol. 26, No. 118 Headlines B U L G A R I A BULGARIAN ENERGY: Moody's Rates New Senior Unsecured Bond 'Ba2' F R A N C E ALTICE FRANCE: S&P Lowers Issuer Credit Rating to 'D' G R E E C E ALPHA BANK: S&P Withdraws 'BB+/B' Issuer Credit Ratings I R E L A N D BAIN CAPITAL 2023-1: S&P Assigns B-(sf) Rating on Cl. F-R Notes BARINGS EURO 2023-1: S&P Affirms B-(sf) Rating on Cl. F-R Notes INDIGO CREDIT III: S&P Assigns B-(sf) Rating on Class F Notes I T A L Y TERNA-RETE ELETTRICA: Moody's Alters Outlook on Ba1 Rating to Pos. L U X E M B O U R G LUNA 2.5: S&P Assigns 'BB-' LongTerm ICR, Outlook Stable P O R T U G A L THETIS FINANCE 2: Fitch Hikes Rating on Class F Notes to 'BB+sf' S P A I N EDREAMS ODIGEO: S&P Upgrades ICR to 'B+', Outlook Stable U N I T E D K I N G D O M MARTURANO HOMES: FRP Advisory Named as Administrators SYNTHOMER PLC: S&P Lowers ICR to 'B', Outlook Negative THOMAS STOREY: RSM UK Named as Administrators X X X X X X X X [] BOOK REVIEW: Transnational Mergers and Acquisitions - - - - - =============== B U L G A R I A =============== BULGARIAN ENERGY: Moody's Rates New Senior Unsecured Bond 'Ba2' --------------------------------------------------------------- Moody's Ratings has assigned a Ba2 long-term debt rating to the senior unsecured bond to be issued by Bulgarian Energy Holding EAD (BEH). Concurrently, Moody's have affirmed the long-term corporate family rating of Ba1, the probability of default rating of Ba1-PD, the Ba2 ratings of the existing senior unsecured Eurobonds, and the ba3 Baseline Credit Assessment (BCA). The outlook remains stable. RATINGS RATIONALE The Ba2 rating assigned to the new bond is in line with that of the existing bonds of BEH, reflecting their senior unsecured ranking. The issuance amount is expected to be EUR600 million but execution is subject to market conditions. The proceeds from the issuance are intended to be used to repay the company's outstanding EUR600 million bond which matures on June 28, 2025, and for general corporate purposes, excluding coal-related activities. The affirmation of the existing ratings, including the Ba1 CFR, reflects BEH's current financial flexibility and low leverage, expressed as funds from operations (FFO) to net debt of 122.7% as of year-end 2024. BEH's rating is further supported by (1) the group's low-carbon power generation mix with around 80% of output stemming from nuclear and hydropower plants; and (2) its ownership of strategic parts of the domestic energy infrastructure, such as the gas and electricity transmission grids, which are regulated and contribute on average around 40-50% of annual EBITDA. The Ba1 CFR remains constrained by (1) limited earnings visibility as a result of evolving energy markets and short regulatory periods; (2) sizeable cash extractions by the government to fund domestic energy cost subsidies via the Electricity System Security Fund (SESF) and Moody's expectations of ongoing high dividends going forward; and (3) political uncertainties around the execution of Bulgaria's energy policy, e.g. as demonstrated by plans to build a new nuclear power plant and by the delays in the liberalization of domestic electricity and gas markets. On May 07, 2025, the National Assembly adopted two bills to the Energy Act, which led to another indefinite postponement of the full market liberalization for retail customers until effective competition between suppliers is achieved and the transition to market-based prices for household customers is established. Nevertheless, the role of BEH's subsidiary Natsionalna Elektricheska Kompania EAD as public supplier, under which it is obliged to buy and sell electricity at regulated prices, will be abolished effective July 01, 2025. The abolishment of the public supplier role will (1) enable BEH to sell its generated electricity at market prices rather than at lower regulated prices; and (2) reduce the state's tariff interventions, which is a positive development for the stability of Bulgaria's electricity market. BEH falls under Moody's Government-related Issuers methodology due to its 100% ownership by the Government of Bulgaria (Baa1 stable). Accordingly, and based on Moody's views of high default dependence and high support from the government in case of financial distress, BEH's Ba1 CFR incorporates two notches of uplift from its BCA of ba3. The high support was evidenced in 2022 by the government granting a state loan to BEH's subsidiary Bulgargaz, the monopoly gas supplier in Bulgaria, for a total amount of BGN800 million to secure the company's liquidity after the cessation of Russian gas supply. Furthermore, Moody's expects that the government will provide some support in relation to the financing of the new nuclear power plant project if it goes ahead. LIQUIDITY BEH's liquidity is underpinned by its sizeable position of cash and cash equivalents of BGN3,706 million at year-end 2024, of which BGN2,727 million are unrestricted. The next material debt maturities are the EUR600 million Eurobond in June 2025 and the BGN800 million government loan provided to Bulgargaz, due in August 2025. Although cash holdings are currently high, capital spending plans and sizeable expected dividend distribution have the potential to strain liquidity. Additional external financing will be required if capital expenditures are executed as currently forecasted or if spending for the new nuclear power plant project ramps up. Generally, Moody's assesses BEH's stand-alone liquidity management as weak. This is because BEH relies almost exclusively on its cash and cash equivalents and internally generated cash flows for its liquidity management, which is centralized at the parent company level. As liquidity back-up lines only exist in the form of small overdraft facilities on subsidiary level, the company is exposed to market disruption risk. This is mitigated by the company's government ownership, which facilitates access to external funding if required. In addition, the state budget contains provisions for equity injections to support BEH's capex. STRUCTURAL CONSIDERATIONS The Ba2 rating of the senior unsecured Eurobonds is one notch below the Ba1 CFR, which reflects a degree of structural subordination of noteholders to the significant amount of debt at BEH's subsidiaries. RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects Moody's expectations that BEH will maintain FFO/net debt above 25%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure on the BCA is currently unlikely due to the uncertainties related to the new nuclear power plant project. Nevertheless, an upgrade of the company's BCA would likely result in a rating upgrade. The ratings could be further upgraded if the rating of the Government of Bulgaria was upgraded. Downward pressure on the BCA could occur if BEH's FFO/net debt were to decline persistently below 25% as a result of, but not limited to, (1) high capital expenditures; (2) cash distributions above expectations, either via dividends or extraordinary payments to the SESF; or (3) adverse regulatory changes. The ratings could be downgraded if BEH were to go ahead with the construction of new nuclear plants and that the risks associated with such project were not sufficiently mitigated by support provided by the Bulgarian government. Downward pressure on the ratings could also develop if Moody's were to reassess Moody's estimates of high support from the Bulgarian government. The methodologies used in these ratings were Unregulated Utilities and Unregulated Power Companies published in December 2023. Headquartered in Sofia, Bulgarian Energy Holding EAD is the holding company of the largest utility group in Bulgaria. The group owns around 40% of the country's generation capacity, owns and operates the electricity and gas transmissions networks and is the public supplier of gas in the country. Bulgarian Energy Holding is 100% owned by the Government of Bulgaria. In 2024, Bulgarian Energy Holding reported consolidated total revenues of BGN8,841 million (EUR4,521 million) and EBITDA of BGN1,389 million (EUR710 million). =========== F R A N C E =========== ALTICE FRANCE: S&P Lowers Issuer Credit Rating to 'D' ----------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on France-based telecommunications operator and senior secured debt borrower Altice France S.A. and its ratings on its senior secured notes and loans to 'D' (default) from 'CC'. S&P said, "We expect to maintain the 'D' rating on both Altice France S.A. and Altice France Holding S.A. until final implementation of the restructuring plan, upon which we will review our ratings to incorporate the group's new capital structure, liquidity position, and forward-looking credit profile." On June 10, Altice France S.A. announced it had entered accelerated safeguard proceedings after obtaining lender support for a wide-ranging restructuring plan of its senior secured capital structure. If approved by the court, the restructuring plan is expected to end by October 2025. The accelerated safeguard procedure entails a stay on Altice France S.A.'s financial obligations, comprising its senior secured notes, the term loans B, and the revolving credit facility (RCF). S&P said, "The filing for accelerated safeguard proceedings will allow Altice France S.A. to formally launch the proposed restructuring of its senior secured debt instruments, which we consider a distressed debt exchange and tantamount to a default. On June 10, a French court validated the opening of a safeguard procedure for Altice France S.A. This procedure triggers automatic stay provisions on the associated financial debt instruments issued or borrowed by Altice France S.A. and will allow the company to proceed with a reorganization of its financial liabilities, comprising its senior secured notes, its term loans B, and its RCF. We therefore believe the default on all the senior secured debt issued by Altice France S.A. is a virtual certainty, because we believe Altice France S.A. will fail to pay all or substantially all of its obligations as they come due during the accelerated safeguard procedure (including the July 2025 term loan maturities and senior secured interests falling due over the period), which under S&P Global Ratings' criteria implies a default." Altice France S.A., with its parent company and borrower of the unsecured debt, Altice France Holding S.A., will now proceed to execute the proposed restructuring. The new structure entails cash payments of about EUR1.5 billion for the existing senior secured lenders and about EUR100 million for the existing unsecured lenders; a debt-to-equity swap; and EUR14.7 billion new senior secured and about EUR900 million new unsecured debt instruments with higher coupon and extended maturity. The proposal also considers a five-year maturity extension of the EUR1.2 billion RCF. The group expects to complete its restructuring by October 2025. S&P expects to maintain our 'D' ratings until the restructuring plan is complete. Upon final implementation of the restructuring plan, S&P will review the ratings to incorporate the group's new capital structure, liquidity position, financial prospects, and our forward-looking assessment of the group's credit profile, with particular focus from its side on: -- The group's capacity to turn around its operations and financial results in a challenging and competitive French market; -- Its forecast trajectory of free operating cash flow after leases; and -- S&P's updated view of the group's governance. =========== G R E E C E =========== ALPHA BANK: S&P Withdraws 'BB+/B' Issuer Credit Ratings ------------------------------------------------------- S&P Global Ratings withdrew its 'BB+/B' long- and short-term issuer credit ratings on Alpha Bank S.A. and its 'BB-/B' long- and short-term issuer credit ratings on Alpha Services and Holdings S.A. at the bank's request. At the time of the withdrawal, the outlook on the ratings was stable. S&P also withdrew the 'BBB/A-2' resolution counterparty ratings on the bank and the issue level ratings. ============= I R E L A N D ============= BAIN CAPITAL 2023-1: S&P Assigns B-(sf) Rating on Cl. F-R Notes --------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Bain Capital Euro CLO 2023-1 DAC's class X-R, A-R, B-R, C-R, D-R, E-R, and F-R notes. The issuer has unrated subordinated notes outstanding from the existing transaction and has not issued additional subordinated notes. This transaction is a reset of the already existing transaction that closed in September 2023. The issuance proceeds of the refinancing notes were used to redeem the refinanced notes (the original transaction's class A, B, C, D, E, and F notes, for which S&P withdrew its ratings at the same time), and pay fees and expenses incurred in connection with the reset. The ratings assigned to Bain Capital Euro CLO 2023-1's notes reflect our 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 issuer'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 2,767.97 Default rate dispersion 565.25 Weighted-average life (years) 4.42 Weighted-average life (years) extended to match reinvestment period 4.63 Obligor diversity measure 170.75 Industry diversity measure 20.65 Regional diversity measure 1.22 The above benchmarks and metrics are based on the performing portfolio Transaction key metrics Total par amount (mil. EUR) including cash and recovery 372.58 Number of performing obligors 213 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.82 Actual 'AAA' weighted-average recovery (%) 36.52 Actual weighted-average spread (net of floors; %) 3.84 Actual weighted-average coupon (%) 3.70 The above benchmarks and metrics are based on the performing portfolio 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 payment. The portfolio's reinvestment period will end approximately 4.6 years after closing, and the portfolio's maximum average maturity date will be 8.6 years after closing. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. S&P said, "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 classes of notes in this transaction." S&P said, "In our cash flow analysis, we have modelled a EUR372.58 million par amount (which takes into account the recovery value on a senior secured loan issued by Altice France S.A., currently rated 'CC' as well as a haircut to reflect the use of note proceeds to make up the target par amount and absence of an effective date concept), actual weighted-average spread (3.84%), actual weighted-average coupon (3.70%), and the actual weighted-average recovery rates at all rating levels as indicated by the issuer. 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 ratings above the sovereign criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned rating levels. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate the exposure to counterparty risk under our current counterparty criteria. "The issuer's legal structure is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R to D-R notes could withstand stresses commensurate with higher ratings than those we have assigned. However, as the CLO will be in its reinvestment phase starting from closing, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes. "For the class F notes, our credit and cash flow analysis indicate that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes. The ratings uplift for the class F notes reflects several key factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated BDR at the 'B-' rating level of 24.26% (for a portfolio with a weighted-average life of 4.42 years), versus if we were to consider a long-term sustainable default rate of 3.1% for 4.42 years, which would result in a target default rate of 13.70%. -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. "The class X-R, A-R, and E-R notes can withstand stresses commensurate with the assigned ratings. Our ratings on the class X-R, A-R, and B-R notes address timely payment of interest and ultimate payment of principal, while our ratings on the class C-R to F-R notes address the ultimate payment of interest and principal. "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 X-R to F-R notes." Bain Capital Euro CLO 2023-1 is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. Bain Capital Credit U.S. CLO Manager II, LP manages the transaction. S&P said, "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class X-R to E-R notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%)** Interest rate§ X-R AAA (sf) 2.00 N/A Three/six-month EURIBOR plus 0.95% A-R AAA (sf) 232.50 38.00 Three/six-month EURIBOR plus 1.38% B-R AA (sf) 41.30 26.99 Three/six-month EURIBOR plus 2.00% C-R A (sf) 22.50 20.99 Three/six-month EURIBOR plus 2.30% D-R BBB- (sf) 26.20 14.00 Three/six- month EURIBOR plus 3.65% E-R BB- (sf) 16.90 9.49 Three/six-month EURIBOR plus 6.00% F-R B- (sf) 11.20 6.51 Three/six-month EURIBOR plus 8.59% Sub NR 24.00 N/A N/A *The ratings assigned to the class X-R, A-R, and B-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. **Based on full target par amount of EUR375,000,000. §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. BARINGS EURO 2023-1: S&P Affirms B-(sf) Rating on Cl. F-R Notes --------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Barings Euro CLO 2023-1 DAC's class A-R to F-R European cash flow CLO notes. At closing, the issuer also has EUR45.70 million of unrated subordinated notes outstanding from the existing transaction. This transaction is a reset of the already existing transaction that closed in March 2023. The existing notes will be fully redeemed with the proceeds from the issuance of the replacement notes on the reset date. The ratings on the original notes have been withdrawn. 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 4.4 years after closing, while the non-call period will end 1.4 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 2,674.33 Default rate dispersion 668.32 Weighted-average life (years) 4.43 Obligor diversity measure 138.36 Industry diversity measure 21.97 Regional diversity measure 1.30 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.49 Actual 'AAA' weighted-average recovery (%) 37.76 Actual weighted-average coupon (%) 4.66 Actual weighted-average spread (net of floors; %) 3.79 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 EUR400 million target par amount, the covenanted weighted-average spread (3.71%), the covenanted weighted-average coupon (5.00%), and actual weighted-average recovery rates at all rating levels. 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 show that the class B-1-R, B-2-R, C-R, D-R, E-R, and F-R 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-R notes can withstand stresses commensurate with the assigned ratings. "Until the end of the reinvestment period on Oct. 30, 2029, the collateral manager may substitute assets in the portfolio for so long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes. This test looks at the total amount of losses that the transaction can sustain as established by the initial cash flows for each rating and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "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 is bankruptcy remote. The issuer is a special-purpose entity that meets our criteria for bankruptcy remoteness. "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-R to F-R notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A-R to E-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category--and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met--we have not included the above scenario analysis results for the class F-R notes. Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. "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." Barings (U.K.) Ltd. manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) Enhancement (%) Interest rate§ A-R AAA (sf) 248.00 38.00 Three/six-month EURIBOR plus 1.49% B-1-R AA (sf) 29.00 27.00 Three/six-month EURIBOR plus 1.95% B-2-R AA (sf) 15.00 27.00 4.75% C-R A (sf) 22.25 21.44 Three/six-month EURIBOR plus 2.30% D-R BBB- (sf) 27.50 14.56 Three/six-month EURIBOR plus 3.60% E-R BB- (sf) 16.75 10.38 Three/six-month EURIBOR plus 5.80% F-R B- (sf) 13.50 7.00 Three/six-month EURIBOR plus 7.83% Sub. Notes NR 45.70 N/A N/A *The ratings assigned to the class A-R, B-1-R, and B-2-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, E-R, and F-R 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. INDIGO CREDIT III: S&P Assigns B-(sf) Rating on Class F Notes ------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Indigo Credit Management III DAC's class A to F notes. At closing, the issuer also issued unrated subordinated notes. The portfolio's reinvestment period will end approximately 4.5 years after closing, while the non-call 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 2,696.48 Default rate dispersion 428.47 Weighted-average life including reinvestment (years) 4.75 Obligor diversity measure 95.39 Industry diversity measure 21.24 Regional diversity measure 1.27 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Actual 'AAA' weighted-average recovery (%) 37.69 Actual weighted-average coupon (%) 4.75 Actual weighted-average spread (net of floors; %) 3.90 Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. Rating rationale S&P said, "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 EUR425 million target par amount, the covenanted weighted-average spread (3.75%), and the covenanted weighted-average coupon (4.00%) as indicated by the collateral manager. We have assumed the covenanted weighted-average recovery rates for all rated notes (36.69% at 'AAA'). 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 class B-1 to E notes could withstand stresses commensurate with higher ratings than those we have assigned. However, as the CLO is in its reinvestment period until Dec. 12, 2029, during which the transaction's credit risk profile could deteriorate, we have capped the assigned ratings. "For the class F notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes." The ratings uplift for the class F notes reflects several key factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated break-even default rate at the 'B-' rating level of 25.70% (for a portfolio with a weighted-average life of 4.75 years), versus if we were to consider a long-term sustainable default rate of 3.1% for 4.75 years, which would result in a target default rate of 14.73%. -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. Under our structured finance sovereign risk criteria, we consider that 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 is bankruptcy remote, in line with our legal criteria. "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, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A 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 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." Ratings Amount Class Rating* (mil. EUR) Sub (%) Interest rate§ A AAA (sf) 261.30 38.52 Three/six-month EURIBOR plus 1.40% B-1 AA (sf) 34.70 28.00 Three/six-month EURIBOR plus 2.20% B-2 AA (sf) 10.00 28.00 5.10% C A (sf) 27.60 21.51 Three/six-month EURIBOR plus 3.00% D BBB- (sf) 29.70 14.52 Three/six-month EURIBOR plus 4.25% E BB- (sf) 19.20 10.00 Three/six-month EURIBOR plus 6.75% F B- (sf) 13.80 6.75 Three/six-month EURIBOR plus 8.26% Sub. Notes NR 35.80 N/A N/A *The ratings assigned to the class A, B-1, and B-2 notes address timely interest and ultimate principal payments. The ratings assigned to the class C to 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 ========= TERNA-RETE ELETTRICA: Moody's Alters Outlook on Ba1 Rating to Pos. ------------------------------------------------------------------ Moody's Ratings has changed to positive from stable the outlook of Terna - Rete Elettrica Nazionale S.p.A. (Terna). Concurrently, Moody's have affirmed Terna's Baa2 long-term issuer rating, baa2 Baseline Credit Assessment (BCA), the Baa2 senior unsecured ratings, and the provisional (P)Baa2 rating on Terna's EUR12 billion senior unsecured EMTN programme. Moody's also affirmed Terna's P-2 short-term issuer and Commercial Paper ratings and (P)P-2 other short-term rating. Moody's also affirmed the Ba1 ratings of Terna's subordinated debt (also known as "hybrid"). RATINGS RATIONALE RATIONALE FOR OUTLOOK CHANGE TO POSITIVE AND AFFIRMATION OF THE RATING The positive outlook reflects Terna's solid financial profile, as evidenced by funds from operations (FFO) to net debt of 15.0% on average over the last five years (2020-24), and that the company could maintain credit metrics aligned with a Baa1 rating over 2025-28. Moody's expects Terna's gross capex of EUR17.7 billion, as included in its 2024-28 business plan update, will result in a substantial increase in adjusted net debt and weaker credit metrics compared to recent years. Nonetheless, nearly all the planned investments will support growth in Terna's regulatory asset base and, in turn, earnings and cash flows. Moreover, management remains committed to maintaining a strong financial structure and protecting credit ratings, and may reinforce the balance sheet amid increased investments, including through hybrid issuance. As a result, Moody's expects FFO/net debt in the low double digits and retained cash flow (RCF)/net debt ratio in the mid-to-high single digits, both in percentage terms, on average over 2025-28. The change in outlook also takes into account the improved fiscal outlook and expected improvement in Italy's economic resilience, underscored by the positive outlook on the Government's Baa3 rating. This is in the context of the company's linkages with the sovereign, given that most of its earnings are generated in Italy. The affirmation of Terna's rating recognizes its monopoly ownership and operation of the electricity transmission network in Italy (Baa3 positive), and its crucial role in delivering the country's energy strategy; the low business risk of its electricity transmission activities, underpinned by a well-established, transparent and supportive regulatory framework; its limited exposure to volume fluctuations; and the usually timely cost recovery mechanisms in the Italian tariff-setting framework, which support revenue predictability and stability. These positives are offset by the country risk associated with Italy where Terna's operations are concentrated; the relatively high proportion of cash flow paid out as dividends, which acts as a constraint on the company's retained cash flow (RCF); and Terna's sizeable and increased capital spending programme, which will bring higher leverage absent mitigating action. Terna falls within the scope of Moody's Government-related Issuers methodology, because the Government of Italy has indirect control. Based on Moody's expectations of a moderate support probability by the Government in case of financial distress, and very high default dependence with the Government, the Baa2 senior unsecured ratings of Terna do not include any uplift from the company's BCA of baa2. Terna's BCA is already higher than the Baa3 rating of its supporter. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Any upgrade of Terna's ratings would be contingent on an upgrade of the Italian sovereign rating. Upward rating pressure would also be subject to continuing sound liquidity and Terna likely maintaining financial metrics in line with a Baa1 credit profile with FFO/Net debt of at least 11% and RCF/Net debt of at least 7%. Terna's ratings could be downgraded following a downgrade of the Italian sovereign rating because of its links with the sovereign's credit profile. Downward pressure on the rating could also result from (1) a structural deterioration in Terna's own credit profile, illustrated, for example, by a weakening of funds from operations (FFO)/net debt below 8% or RCF/net debt below 5%; (2) growing exposure to unregulated businesses, which would be detrimental to Terna's currently low business risk profile; or (3) unexpected adverse regulatory developments hurting the company's business risk profile, evidence of political interference or adverse fiscal measures. The methodologies used in these ratings were Regulated Electric and Gas Networks published in April 2022. =================== L U X E M B O U R G =================== LUNA 2.5: S&P Assigns 'BB-' LongTerm ICR, Outlook Stable -------------------------------------------------------- S&P Global Ratings assigned its 'BB-' long-term issuer credit rating to Luna 2.5, while affirming the 'BB-' issuer rating on Luna III S.a.r.l, where the existing debt is held. S&P said, "We also assigned our 'BB-' issue rating and '3' recovery ratings to Luna 2.5's proposed senior secured debt of EUR2.3 billion. "After the transaction's close and repayment of the existing debt, we will withdraw the issue and issuer ratings on Luna III. "The stable outlook on Luna 2.5's rating reflects our expectation of up to 5% revenue growth and modest S&P Global Ratings-adjusted EBITDA margin expansion to 20.5% over the next 12-18 months. This is based on a strong order backlog and our expectation of new contract wins and improving operating leverage, such that S&P Global Ratings-adjusted debt to EBITDA decreases to about 5x over the next 12-18 months." Luna 2.5 S.a.r.l, the new parent company of Urbaser, plans to issue a new EUR1,150 million term loan B (TLB) and EUR1,150 million senior secured notes, both due in 2032, to refinance the existing TLB of EUR1,250 million and pay a shareholder distribution of EUR1,000 million. The company is also planning to issue a new multicurrency revolving credit facility (RCF) of EUR400 million due six months before the TLB and notes. Although the transaction will increase Urbaser's gross debt and its leverage, S&P anticipates that ongoing good operating performance will support deleveraging to about 5.0x over the next 12-18 months. The proposed refinancing of Urbaser's capital structure and shareholder remuneration will temporarily increase leverage. Under the new parent company, Luna 2.5 S.a.r.l., Urbaser is planning to issue EUR1.15 billion of senior secured notes and EUR1.15 billion of a new TLB, both due in 2032, to repay the existing TLB of EUR1.25 billion and pay a dividend of EUR1 billion. The remaining amount is considered to be for transaction expenses. In addition, the company is also raising a new EUR400 million multicurrency RCF that matures six months before the notes and the new TLB. As a result, S&P forecasts leverage will be 5.4x and funds from operations (FFO) to debt will be 13.6% at year-end 2025, which compares with 3.5x and 20.3%, respectively, at year-end 2024. Continued good operating performance is expected to support deleveraging. Urbaser's operating performance was strong in 2024, with revenue growth of 8.6% year over year driven by urban services and industrial treatments that grew organically by 13% and 7%, respectively. The S&P Global Ratings-adjusted EBITDA margin grew to 20% in 2024 from 18.2% in 2023 thanks to a positive mix of growth services in higher-margin segments. This was supported by operational improvements on the back of efficiency measures and better operating leverage, despite ongoing investments to strengthen central functions. Free operating cash flow (FOCF) was negative EUR34 million, given significant capital expenditure (capex) investments of EUR375 million alongside the top-line growth from treatment projects, which are more capital intense. This was in addition to working capital outflows of EUR77 million, mainly linked to the reversal of a provision and the negative impact of hyperinflation in Argentina, which increased working capital. S&P said, "In 2025, we forecast revenue growth of close to 1% and foresee 4.5% and 6.5% in 2026 and 2027, respectively. We expect this growth to come from all segments, but particularly from industrial segments, where it is supported by new project wins and a higher valuation of waste projects. The expected revenue growth is underpinned by a strong order backlog of EUR15.8 billion across all segments, securing more than 80% of 2024 revenue up to 2027. "In addition, Urbaser's performance in the first quarter of 2025 was strong, with revenue growth of 11% and EBITDA growth of EUR11 million year over year. Over the last two years, the company has invested in strengthening its central functions and commercial activities, while implementing efficiency measures that have supported the strong margin expansion in 2024. We therefore anticipate that Urbaser will continue on its growth trajectory by expanding the S&P Global Ratings-adjusted EBITDA margin to 21% by the end of 2027. We expect this to be supported by a positive mix effect from growth in higher-margin segments and improving operating leverage as the company benefits further from its recent investments and efficiency measures. "As a result, we forecast leverage will drop to 5.2x in 2026 and 5.0x in 2027 from 5.4x in 2025, while we expect FFO to debt to remain at 12.8%-13.8% during those years. We forecast FFO cash interest coverage to remain comfortably above 3.0x. "We anticipate FOCF generation will remain volatile, as new contract wins and extensions require significant capex investments. Over the last two years, FOCF has remained negative due to significant capex investments, with EUR375 million in 2024 alone. We understand that those investments are backed by new contract wins and renewals that fuel EBITDA growth, and we have seen an expansion of about EUR90 million in 2024. "Given the capital intensity of the sector and its indicated strong order backlog, we continue to expect volatility in its FOCF generation as upfront investments temporarily suppress FOCF generation. We expect this to be the case until EBITDA expansion from those investments starts to show. While lower anticipated capex investments in 2025 support FOCF of about EUR29.6 million, we forecast capex investments of EUR400 million-450 million in 2026 and 2027, which should result in broadly muted FOCF before lease payments. Based on about EUR100 million-120 million of lease payments per annum, FOCF after those payments turns negative. However, if we were to consider capex investments on a steady state basis, we would see positive FOCF of about EUR100 million between 2025 and 2027. In addition, the volatility in FOCF generation is mitigated by good revenue visibility and stability, given the long contract length of 10-25 years for municipal treatment and five to eight years for municipal urban services such as waste collection. These two segments, which contribute about 80% of total EBITDA, have a large portion of concessional fees embedded in their remuneration structure." Liquidity remains solid, with no near-term maturities, EUR210 million of cash on balance sheet at the end of May 31, 2025 (pro forma for the transaction), and a fully undrawn RCF of EUR400 million. S&P said, "The stable outlook reflects our expectation of up to 5% revenue growth and modest S&P Global Ratings-adjusted EBITDA margin expansion to 20.5% over the next 12-18 months thanks to an expected strong order backlog, new contract wins, and improving operating leverage. We expect this to result in S&P Global Ratings-adjusted debt to EBITDA decreasing to 5x over the next 12 to 18 months." S&P may lower its rating on Urbaser over the next 12 months if: -- Adjusted debt to EBITDA increases to above 5x on a sustained basis with no clear prospects for improvement; -- The company pursues an aggressive financial policy, resulting, for example, in debt-funded acquisitions or shareholder distributions that increase adjusted debt to EBITDA above the aforementioned level; -- Adjusted FFO to debt declines to below 12% on an ongoing basis; or -- FOCF turns sustainably negative in the absence of any EBITDA growth. An upgrade is unlikely given the sponsor's tolerance for higher leverage, but we could consider an upgrade if a less aggressive financial policy is indicated by a publicly committed financial policy or a path to an exit, as well as: -- Adjusted debt to EBITDA decreasing to 4x on a sustained basis; -- FFO to debt improving to 20% on an ongoing basis; and -- FOCF to debt improving to 10% on an ongoing basis. =============== P O R T U G A L =============== THETIS FINANCE 2: Fitch Hikes Rating on Class F Notes to 'BB+sf' ---------------------------------------------------------------- Fitch Ratings has upgraded five classes of Ares Lusitani - STC, S.A. / Thetis Finance No. 2's (Thetis 2) notes. Entity/Debt Rating Prior ----------- ------ ----- Ares Lusitani - STC, S.A. / Thetis Finance No.2 A PTLSNLOM0005 LT AAAsf Affirmed AAAsf B PTLSNMOM0004 LT AA+sf Upgrade AAsf C PTLSNNOM0003 LT AA-sf Upgrade A+sf D PTLSNOOM0002 LT Asf Upgrade A-sf E PTLSNPOM0001 LT BBB+sf Upgrade BBBsf F PTLSNQOM0000 LT BB+sf Upgrade BBsf Transaction Summary The transaction consists of a portfolio of fully amortising auto loans originated in Portugal by Banco Credibom, S.A. Credibom is a specialist lender wholly owned by CA Personal Finance and Mobility, itself fully owned by Credit Agricole S.A. (A+/Stable/F1). KEY RATING DRIVERS Partial Update to Asset Assumptions: Fitch has revised the 'AAAsf' rating case default multiple to 4.8x from 5.0x on a blended portfolio basis, reflecting that the revolving period ended in July 2024, which mitigates the risk of potential underwriting standards loosening and the pool migration towards riskier asset types. All other asset assumptions are unchanged, with base case lifetime defaults and recoveries at 7.7% and 45.4%, respectively, considering the portfolio performance expectations, Portugal's macro-economic outlook and the originator's servicing strategies. As of the latest reporting date, the transaction's outstanding portfolio balance is 78% of the initial balance comprised of new car (88% in volume terms) and used car loans (12%). Gross cumulative defaults defined as arrears over 90 days remain contained at 1.8% of the initial pool balance plus revolving period purchases, and early-stage arrears at 0.8% of the current pool balance. Increased CE Protection: The upgrades reflect the higher credit enhancement (CE) protection available to the rated notes versus last year, consistent with amortisation linked to target levels of over-collateralisation. Fitch expects CE gains to be more pronounced for the senior class A to C notes as they continue to amortise, compared with the junior class D to F notes. A fully sequential amortisation event will occur if cumulative defaults on the portfolio exceed certain thresholds, or a principal deficiency ledger (PDL) is recorded for two consecutive periods. PDL and gross cumulative defaults are zero and 1.0%, respectively, so Fitch does not expect a switch to fully sequential amortisation in the short to medium term. A mandatory switch to sequential amortisation will occur when the portfolio balance is 10% or less of its initial balance. Adequate Counterparty Arrangements: Counterparty arrangements remain compatible with a maximum achievable rating of 'AAAsf', in line with Fitch's criteria. This is due to the minimum eligibility rating thresholds defined for the transaction account bank of 'A' and the interest-rate swap provider of 'A' or 'F1'. No back-up servicer was appointed at closing, but servicing continuity risk is mitigated by the liquidity provided through a dedicated cash reserve that would cover senior costs, net swap payments (if any) and interest on class A to C notes for more than three months, which Fitch deems sufficient to implement alternative arrangements if needed. The maximum achievable rating for the class D to F notes is 'AA+sf' in accordance with Fitch's criteria. This is because while these notes are excluded from this liquidity arrangement, their interest payments are deferrable as per transaction terms without constituting an event of default even when they become the most senior tranche. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - For the classes A and B notes, a downgrade of Portugal's Long-Term Issuer Default Rating (IDR) that could decrease the maximum achievable rating for Portuguese structured finance transactions as these notes are rated at the maximum achievable rating, at six notches above Portugal's IDR. - Long-term asset performance deterioration such as increased delinquencies or reduced portfolio yield, which could be driven by changes in portfolio characteristics, macro-economic conditions, business practices or the legislative landscape. For instance, a 25% increase in defaults combined with a 25% decrease in recoveries could lead to a downgrade of most tranches. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The class A notes are rated at the highest level on Fitch's scale and cannot be upgraded. - For the class B to F notes, CE ratios increase as the transaction deleverages to fully compensate the credit losses and cash flow stresses commensurate with higher rating scenarios. For instance, a 10% decrease in defaults combined with a 10% increase in recoveries could lead to a category upgrade of most tranches. 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 Ares Lusitani - STC, S.A. / Thetis Finance No.2 Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Prior to the transaction closing, Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Prior to the transaction closing, Fitch conducted a review of a small, targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. ========= S P A I N ========= EDREAMS ODIGEO: S&P Upgrades ICR to 'B+', Outlook Stable -------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on online travel agency eDreams ODIGEO S.A. to 'B+' from 'B' and raised its issue rating on the extended super senior RCF to 'BB' from 'BB-', with the '1' recovery rating on the facility unchanged. Moreover, S&P assigned its 'B+' issue rating and '3' recovery rating to the proposed senior secured notes. The stable outlook reflects that S&P expects travel demand to remain resilient despite persistent macroeconomic headwinds, and that eDreams will continue with its solid track record in increasing and retaining its Prime membership such that leverage should fall toward 3.0x and FOCF reach EUR100 million in 2026. eDreams achieved strong Prime members growth, contributing to solid operating performance and improving credit metrics. The company reached its Prime membership target of 7.25 million for fiscal 2025, up 25% year on year. Revenue increased to EUR671 million from EUR643 million the previous year, excluding the one-off EUR7.9 million positive accounting adjustment for Prime revenue recognition, driven by the expanded Prime membership base and partly offset by a lower average revenue per unit. S&P Global Ratings-adjusted EBITDA margin improved to 13.4% from 9.0%, supported by the increasing longevity of Prime members, which reduces customer acquisition costs. This solid operating performance and profitability growth led to eDreams landing at 4.2x S&P Global Ratings-adjusted debt to EBITDA in 2025 from 6.5x in 2024, and FOCF reaching EUR68.5 million from EUR66.6 million in 2024. S&P said, "We expect eDreams will continue to roll out its Prime model, driving further credit metrics improvement. While we expect the pace of member increases to moderate, we forecast that Prime subscriptions will surpass 8 million by fiscal year-end 2026, supported by higher renewal rates and increased market penetration, including in new ones, since the program is available in only 10 of the 44 countries where the company operates. We forecast revenue increasing toward EUR715 million in the same period improving profitability, with adjusted EBITDA margins reaching 17.5%, as Prime members become loyal customers. We expect eDreams' adjusted leverage to trend toward 3.0x in fiscal 2026, on earnings growth. Furthermore, FOCF should increase toward EUR100 million in fiscal 2026, supported by working capital inflow due to the normalization of the average customer basket; deferred Prime revenue, which has an immediate positive impact on cash flow but is not recognized as revenue until it is accrued; and relatively stable capital expenditure (capex) of about 8% of revenue per year." S&P said, "We understand the company will pursue share buybacks this year but expect it will maintain sufficient financial flexibility to sustain the rating. Although the company does not have a publicly stated financial policy, we understand that cash flow from operations will largely be retained within the business, used for share buybacks or to repay debt, as the company doesn't plan for material acquisitions at the moment. While eDreams carried out share buybacks of about EUR80 million last year and recently approved an additional buyback program of EUR20 million for this year, we view the impact on our adjusted credit metrics as limited and expect the group will continue to make financial policy choices that keep credit metrics in line with the rating." The proposed refinancing strengthens eDreams' debt maturity profile and is leverage neutral. eDreams' capital structure consists of a EUR180 million super senior RCF and EUR375 million secured notes, both maturing in 2027. The company seeks to refinance these instruments with an upsized and extended super senior RCF of EUR185 million and new EUR375 million senior secured notes, in line with the existing senior secured notes, and push the maturities of its capital structure to 2030. S&P estimates that, post-transaction, eDreams will have available liquidity of about EUR205 million (including undrawn RCF and cash balances, net of bank overdrafts), sufficient to support the company's operations as long as there are no disruptions that would increase working capital needs or constrain cash flow expectations over the next 12 months. The rating on eDreams remains constrained by the limited track-record of its Prime membership program. S&P said, "Although we expect the company to continue improving its profitability and cash flow over the next 12 months, we think the market for subscription-based travel offering is still relatively new and it is uncertain to what extent it will grow. Our rating encompasses the underlying risks on its long-term validation and sustainability, considering that this program is the backbone of eDreams' long-term strategy and projected growth. We cannot ignore the risk attached to any unexpected declines in Prime members, which in our view could reduce revenue, EBITDA, and cash flow, increasing pressure on the company's financial position. Nevertheless, management has reiterated that churn rates to turnover is relatively stable, which is essential to the program's long-term sustainability." S&P said, "We think eDreams is exposed to several risks that could weaken credit metrics. Persisting macroeconomic headwinds could diminish disposable income for travel and leisure, with geopolitical risk possibly exacerbating this. However, we expect travel demand will continue to increase in 2025, albeit more slowly than in 2024. Additionally, we acknowledge risks in the ongoing disputes with Ryanair, which have already contributed to the decline in non-Prime bookings. Ryanair maintains that flights not sold on its website should only be sold by distributors such as online travel agencies with the airlines' consent. To date, we understand that Ryanair has reached agreements with several of eDreams' competitors such as Expedia, TUI, Logitravel, and Etraveli. However, it is eDreams' position that it should be able to distribute Ryanair's flights without the need for an agreement. Consequently, eDreams is in legal disputes with Ryanair, which could result in a certain deterioration of its brand image, and, therefore of its operating performance, if courts rule against eDreams. "The stable outlook reflects that we expect travel demand to remain resilient throughout 2025 despite persistent macroeconomic headwinds and that eDreams will continue with its track record in increasing and retaining its Prime membership base. We project eDreams will generate S&P Global Ratings-adjusted FOCF sustainably toward EUR100 million and adjusted debt to EBITDA trending toward 3x in its fiscal 2026." S&P could take a negative rating action if performance deteriorates materially below its base-case scenario sustainably. This could follow the company's failure to consolidate and expand its Prime membership business model, on the back of macroeconomic pressure, geopolitical risk escalation, or increased competition, resulting in: -- S&P Global Ratings-adjusted FOCF significantly deteriorating or adjusted debt to EBITDA increasing over 4.0x; -- Materially deteriorated liquidity; or -- S&P's observation of material weakness in the stickiness of eDreams' Prime customer base. S&P said, "We could raise our ratings if eDreams meaningfully expanded of the size and scope of its operations following the consolidation of its Prime subscription business supported by a loyal customer base, while achieving stable and meaningful EBITDA margin expansion and FOCF. An upgrade would also require adjusted debt to EBITDA to decline to and stay comfortably below 3.0x, and a financial policy that aims to maintain improved credit metrics, with limited risk of releveraging." =========================== U N I T E D K I N G D O M =========================== MARTURANO HOMES: FRP Advisory Named as Administrators ----------------------------------------------------- Marturano Homes Ltd was placed into administration proceedings in the Court of Session, No P560 of 2025, and Michelle Elliott and Callum Angus Carmichael of FRP Advisory Trading Limited were appointed as administrators on June 5, 2025. Marturano Homes engaged in the buying and selling of own real estate. The Company's registered office is at 72 Henderland Road, Bearsden, Glasgow, G61 1JG to be changed to C/O FRP Advisory Trading Limited, Level 2, The Beacon, 176 St Vincent Street, Glasgow, G2 5SG. The joint administrators can be reached at: Michelle Elliott Callum Angus Carmichael FRP Advisory Trading Limited Level 2, The Beacon 176 St Vincent Street Glasgow G2 5SG For further details, contact: The Joint Administrators Tel No: +44 (0)330 055 5455 Alternative contact: Ryan McGee Email: cp.glasgow@frpadvisory.com SYNTHOMER PLC: S&P Lowers ICR to 'B', Outlook Negative ------------------------------------------------------ S&P Global Ratings lowered to 'B' from 'B+' its ratings on chemical manufacturer Synthomer PLC and its debt. The recovery rating on the debt remains at '3', reflecting its expectation of meaningful (about 65%) recovery prospects in the event of a payment default. S&P said, "The negative outlook reflects our base-case expectation that Synthomer's adjusted debt to EBITDA will remain at about 6x in 2025 and that it may not return to healthy positive FOCF generation in 2026. The outlook additionally factors in our forecast of renewed covenant pressure, although we anticipate that the company will be successful in renegotiating the required thresholds." Uncertainty introduced by tariffs and more bearish demand globally will cloud Synthomer's outlook in 2025-2026. This is in line with the broader sector where chemical players and their customers grapple with cautious business and consumer sentiment and the broader macroeconomic and geopolitical outlook. Although S&P understands that Synthomer's "in region for region" strategy of manufacturing close to customers largely mitigates its direct exposure to tariffs, it believes that secondary impacts will unfold over time. S&P said, "We anticipate that Synthomer's adjusted EBITDA from continuing operations will strengthen to about GBP137 million in 2025 from GBP128 million in 2024, and further to GBP183 million in 2026. This contrasts with GBP155 million-GBP165 million adjusted EBITDA in 2025 and GBP210 million-GBP220 million in 2026 we forecast previously. The revision primarily reflects softer trading conditions as well as a perimeter effect in 2025. In June 2025, Synthomer disposed of William Blythe Ltd. for £25 million in net proceeds, which it will use for net debt reduction. We now anticipate a higher-for-longer elevated adjusted debt to EBITDA of 6.0x in 2025 and 4.5x in 2026, above our previous forecast of 5.3x-5.6x in 2025 and 3.8x-4.0x in 2026. In estimating adjusted debt for 2025, we added to reported financial debt of about GBP700 million about GBP100 million related to factoring arrangements, GBP56 million of lease liabilities, and GBP47 million of pension obligations (net of tax). We deduct about GBP75 million of unrestricted cash, which we project will be available at the 2025 year-end." Business improvement initiatives will partly mitigate the effect of lower EBITDA forecast, but return to healthy FOCF in 2026 is uncertain. The company targets a wide range of initiatives and supply chain optimization, including planning, procurement, and logistical enhancements. S&P said, "We consider the realization of these measures to be largely within management's control and understand that they are on track. That said, some of the gains can be partly offset by higher operating costs, for example due to wage inflation. In addition, we believe the company's return to healthy positive FOCF in 2026 that we anticipated previously is uncertain and will depend on recovery in EBITDA and targeted working capital management." Synthomer's rebalancing of the product portfolio toward specialty chemicals is a cornerstone of its strategy. The strategy envisages an increase in the share of specialty chemicals to 70% from the current split of 55% for specialty chemicals and 45% for commodity chemicals. S&P said, "We anticipate that this transition will be achieved through further asset disposals and targeted investments in innovation with particular emphasis on sustainability of the products. This, in combination with cost savings and efficiencies, should lead to stronger and more resilient profitability of Synthomer over time. We consider the current 4%-6% adjusted EBITDA margin to be below sector average." S&P said, "The negative outlook reflects our base-case expectation that Synthomer's adjusted debt to EBITDA will remain at about 6x in 2025 and that it may not return to healthy positive FOCF generation in 2026. The outlook additionally factors in our expectation of renewed covenant pressure, although we anticipate that the company will be successful in renegotiating the required thresholds." S&P could lower the rating if: -- Synthomer's FOCF turned negative also in 2026; -- Its adjusted debt to EBITDA remained at about 6.0x-6.5x, for example because of market headwinds or weaker-than-anticipated cost control; -- Its covenant headroom came under further pressure, weighing on liquidity; or -- Its adjusted EBITDA margin did not progress toward 9% and above. S&P could revise the outlook to stable if: -- Adjusted leverage remains below 6x; -- The company consistently generates positive FOCF; and -- S&P forecasts that Synthomer will maintain adequate liquidity and comfortable headroom under its financial covenants. THOMAS STOREY: RSM UK Named as Administrators --------------------------------------------- Thomas Storey Fabrications Group Limited was placed into administration proceedings in the High Court of Justice Business and Property Court in Manchester, Insolvency and Companies List (ChD), Court Number: CR-2025-728, and Christopher Ratten and Gareth Harris of RSM UK Restructuring Advisory LLP were appointed as administrators on June 5, 2025. Thomas Storey is a manufacturer of metal structures and parts of structures. Its registered office and principal trading address is at Stainburn Road, Openshaw, Manchester M11 2EB. The joint administrators can be reached at: Gareth Harris RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds LS1 4DL -- and -- Christopher Ratten RSM UK Restructuring Advisory LLP Landmark, St Peter's Square 1 Oxford Street Manchester, M1 4PB Correspondence address & contact details of case manager: Sam Thompson RSM Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds, LS1 4DL Tel No: 0113 285 5000 Gareth Harris Tel No: 0113 285 5000 Christopher Ratten Tel No: 0161 830 4000 =============== X X X X X X X X =============== [] BOOK REVIEW: Transnational Mergers and Acquisitions ------------------------------------------------------ Author: Sarkis J. Khoury Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Order your personal copy today at http://is.gd/hl7cni Transnational Mergers and Acquisitions in the United States will appeal to a wide range of readers. Dr. Khoury's analysis is valuable for managers involved in transnational acquisitions, whether they are acquiring companies or being acquired themselves. At the same time, he provides a comprehensive and large-scale look at the industrial sector of the U.S. economy that proves very useful for policy makers even today. With its nearly 100 tables of data and numerous examples, Khoury provides a wealth of information for business historians and researchers as well. Until the late 1960s, we Americans were confident (some might say smug) in our belief that U.S. direct investment abroad would continue to grow as it had in the 1950s and 1960s, and that we would dominate the other large world economies in foreign investment for some time to come. And then came the 1970s, U.S. investment abroad stood at $78 billion, in contrast to only $13 billion in foreign investment in the U.S. In 1978, however, only eight years later, foreign investment in the U.S. had skyrocketed to nearly #41 billion, about half of it in acquisition of U.S. firms. Foreign acquisitions of U.S. companies grew from 20 in 1970 to 188 in 1978. The tables had turned an Americans were worried. Acquisitions in the banking and insurance sectors were increasing sharply, which in particular alarmed many analysts. Thus, when it was first published in 1980, this book met a growing need for analytical and empirical data on this rapidly increasing flow of foreign investment money into the U.S., much of it in acquisitions. Khoury answers many of the questions arising from the situation as it stood in 1980, many of which are applicable today: What are the motives for transnational acquisitions? How do foreign firms plans, evaluate, and negotiate mergers in the U.S.? What are the effects of these acquisitions on competition, money and capital markets; relative technological position; balance of payments and economic policy in the U.S.? To begin to answer these questions, Khoury researched foreign investment in the U.S. from 1790 to 1979. His historical review includes foreign firms' industry preferences, choice of location in the U.S., and methods for penetrating the U.S. market. He notes the importance of foreign investment to growth in the U.S., particularly until the early 20th century, and that prior to the 1970s, foreign investment had grown steadily throughout U.S. history, with lapses during and after the world wars. Khoury found that rates of return to foreign companies were not excessive. He determined that the effect on the U.S. economy was generally positive and concluded that restricting the inflow of direct and indirect foreign investment would hinder U.S. economic growth both in the short term and long term. Further, he found no compelling reason to restrict the activities of multinational corporations in the U.S. from a policy perspective. Khoury's research broke new ground and provided input for economic policy at just the right time. Sarkis J. Khoury holds a Ph.D. in International Finance from Wharton. He teaches finance and international finance at the University of California, Riverside, and serves as the Executive Director of International Programs at the Anderson Graduate School of Business. ********* 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. 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