250701.mbx

250701.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 Tuesday, July 1, 2025, Vol. 26, No. 130 Headlines B E L G I U M MANUCHAR GROUP: Fitch Assigns 'B(EXP)' LongTerm IDR, Outlook Stable F R A N C E ACCOR SA: Egan-Jones Withdraws BB Senior Unsecured Ratings EURO ETHNIC: Moody's Affirms B2 CFR & Rates First Lien Term Loan B2 EUTELSAT COMMUNICATIONS: Moody's Puts B2 CFR on Review for Upgrade HESTIAFLOOR 2: Fitch Affirms 'B' LongTerm IDR, Outlook Positive IDEMIA GROUP: Moody's Affirms 'B2' CFR & Alters Outlook to Negative G E R M A N Y PONY SA 2023-1: Fitch Hikes Rating on Class F Notes to 'BBsf' TECHEM VERWALTUNGSGESELLSCHAFT: Fitch Rates Sr. Notes 'B+(EXP)' TECHEM VERWALTUNGSGESELLSCHAFT: Moody's Affirms 'B2' CFR TECHEM VERWALTUNGSGESELLSCHAFT: S&P Affirms 'B+' ICR I R E L A N D ADAGIO X: Fitch Assigns 'B-sf' Final Rating on Class F-RR Notes ARES EUROPEAN XI: Fitch Affirms 'B+sf' Rating on Class F Notes CVC CORDATUS XXXV: S&P Assigns B-(sf) Rating on Class F Notes TULLY PARK: Fitch Assigns 'B-sf' Final Rating on Class F Notes I T A L Y ALMAVIVA SPA: S&P Downgrades ICR to 'BB-', Outlook Stable K A Z A K H S T A N OIL INSURANCE: S&P Upgrades ICR to 'BB-' on Stable Performance L U X E M B O U R G MOBILUX GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable T U R K E Y TURKIYE SINAI: Fitch Affirms B+/BB- LongTerm IDRs, Outlook Positive U N I T E D K I N G D O M BCP V MODULAR: Moody's Affirms 'B2' CFR, Outlook Remains Negative FINSBURY SQUARE 2025-1: S&P Assigns Prelim. 'B-' Rating on F Notes GC NO. 24 LIMITED: KR8 Advisory Named as Administrators PLM GLOBAL (HOLDINGS): RSM UK Named as Administrators SIG PLC: Egan-Jones Retains B+ Senior Unsecured Ratings SPARKLE BERRY: FRP Advisory Named as Administrators SWALLOWTAIL PRINT: McTear Williams Named as Administrators - - - - - ============= B E L G I U M ============= MANUCHAR GROUP: Fitch Assigns 'B(EXP)' LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has assigned Manuchar Group B.V. a first-time expected Long-Term Issuer Default Rating of 'B(EXP)' with a Stable Outlook. It has also assigned Manuchar's proposed EUR415 million seven-year senior secured notes an expected rating of 'B(EXP)' with a Recovery Rating of 'RR4'. The notes will be guaranteed by subsidiaries representing around 65% of consolidated EBITDA and secured by share pledges in guarantor subsidiaries. The notes will be subordinated to transactional lines and other debt at operating companies, secured by inventories or receivables of the cost and freight division. The assignment of the notes' final rating is contingent on the receipt of final documentation conforming to information already provided. The IDR reflects Manuchar's high leverage, small scale and exposure to emerging countries, which are balanced by an asset-light model, leading positions in its markets and resilient profit margins. The Stable Outlook reflects its expectation that EBITDA gross leverage will fall below 5.5x - its negative sensitivity - from 2026 on EBITDA growth and positive free cash flow (FCF) generation. Key Rating Drivers Emerging Market Exposure: Manuchar's core region is Latin America, with Brazil representing 29% of its 2024 EBITDA. It also has a meaningful presence in the Middle East and Africa; the company serves over 40 countries globally. It provides value to chemical suppliers by handling complex distribution, supporting customer retention, and maintaining close proximity to end-users through its extensive warehouse infrastructure. In the medium term, emerging markets should benefit from higher growth than mature markets. At the same time, it entails a sensitivity of demand to inflation and longer collection of payments from some customers. High Leverage: Fitch anticipates Manuchar's EBITDA gross leverage to be at 5.6x at end-2025, an improvement on 2024's level, following a recovery of volumes and the consolidation of Proquiel Quimicos, despite higher debt. Fitch expects Manuchar to capture some organic growth in its main markets, with associated gradual EBITDA growth supporting deleveraging to below 5x by 2028. Asset-light Business: Manuchar operates an asset-light model, with maintenance capex estimated at 0.3% of sales. Its non-current assets mostly comprise 123 distribution warehouses, offices and a few port operations. The shipment of goods is outsourced, with around 90% of maritime shipping volumes processed as break bulk shipping to reduce costs compared with container shipping. This supports its margin stability and structurally positive FCF generation. Heavy Working Capital: Manuchar, as a distributor, holds material inventories and handles large volumes. Moreover, part of its business is sourcing and arranging maritime shipping of goods to destinations, which requires financing to cover the transit time. Manuchar uses different types of transactional lines that are secured by credit-insured or high-quality receivables, factoring facilities and letters of credit. Fitch expects these lines to be rolled over in the normal course of business, despite their short-term nature, as the exposure is backed up by assets, receivables and/or insurance. FX Exposure Mitigated: The US dollar is Manuchar's functional currency. About 64% of its operating income is realised in US dollars or euros hedged into dollars, and about 75% of inventory and receivables are either denominated in US dollars or priced in local currency but pegged to the dollar. The remaining 25% is hedged through options or the use of local-currency lines. Manuchar is raising debt in euros, but Fitch expects the company to economically convert most of the funding into US dollars through swaps or hedges to match the currency exposure of the debt to its earnings stream. M&A Risks: Manuchar's core strategy is to grow organically, with opportunistic acquisitions, despite several transactions completed over the past three years. Fitch has not assumed acquisitions in its rating case and rating headroom would be limited until 2027 for re-leveraging, unless Manuchar outperforms its forecasts. As usual in distribution M&A, earn-outs or put options related to past acquisitions may affect cash flows; Fitch expects that such flows would only be material, if the company outperformed its rating case. Peer Analysis Manuchar's closest Fitch-rated peer is Windsor Holdings III, LLC (Univar) (B+/Stable). Univar and Manuchar are both chemical distributors with asset-light business models and resilient market stability. Fitch sees both companies' business profile and offering as similar, although Univar, as the world's second-largest chemical distributor, has greater scale and broader diversification than Manuchar. Univar's larger size, operational reach, and more extensive geographic presence give it a stronger ability to manage logistical complexities and counterparty risks than Manuchar. EVOCA S.p.A. (B/Stable) is a manufacturer and distributor specialising in professional coffee and vending machines with a strong presence in Europe. EVOCA's scale is comparable to Manuchar's, and both companies benefit from a well-diversified customer base. EVOCA has higher EBITDA margins than Manuchar and a similar leverage profile, with EBITDA leverage typically 5.5x-6.0x. Flender International GmbH (B/Stable) is a leading global supplier of gear units, couplings, and generators, mainly serving the wind power industry. (about 57% of revenue in FY24). Unlike Manuchar's more diversified customer base, Flender's business is concentrated on major wind original equipment manufacturers due to the nature of the industry. Flender's financial structure is marginally weaker than Manuchar's, with expectations for EBITDA leverage to trend between 5.5x-6.5x. Key Assumptions Fitch's Key Assumptions Within its Rating Case for the Issuer - Revenues to grow 15% in 2025, driven by organic growth and consolidation of Proquiel Quimica, followed by 3%-4% organic growth to 2028 - EBITDA margin of 7.8% in 2025 and 8% in 2026-2027 due to operating leverage as business grows - Capex at 1.7% of revenue in 2025, reducing to 1.1%-1.3% in 2026-2028 - Working capital at 26%-28% of revenues across 2025-2028 - No dividends to 2028 - No acquisitions to 2028 Recovery Analysis The recovery analysis assumed that Manuchar would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Its GC EBITDA estimate reflects Fitch's view of a sustainable EBITDA level post-reorganisation, on which Fitch bases its enterprise valuation. Fitch used a GC EBITDA of USD85 million, reflecting a fall in volumes in Manuchar's key geographies due to weak economic activity and high inflation. Fitch applied a multiple of 5.0x to GC EBITDA to estimate Manuchar's enterprise valuation, based on its global presence in emerging markets, long expertise in chemical distribution in challenging geographies, and vast warehouse network. Fitch assumed that Manuchar's use of factoring would be substituted by super senior debt in the event of financial distress, which is deducted from the value available to calculate recoveries. Fitch also assumed that transactional lines would rank super senior as they are collateralised by receivables or inventories. Fitch assumes its super senior revolving credit facility to be fully drawn and to rank senior in recoveries to the senior secured notes. After deducting 10% for administrative claims, its analysis resulted in a waterfall-generated recovery computation for the senior secured instruments in the 'RR4' band, indicating a 'B(EXP)' instrument rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 5.5x on a sustained basis - EBITDA interest coverage consistently below 2x - EBITDA margin consistently below 7% - Volatile or negative FCF margin on a sustained basis - Aggressive M&A leading to recurring leverage, exhausting rating headroom Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 4.5x on a sustained basis - Improvement in geographical and end markets diversification, leading to increased earnings stability Liquidity and Debt Structure The transaction aims to refinance the EUR350 million notes due 2027, extending the maturity profile, and pay transaction costs. Manuchar had USD48 million in cash as of March 2025 and will have post refinancing transaction USD41 million available under the USD85 million revolving credit facility maturing in December 2029. Fitch believes this facility will be sufficient to fund working-capital swings and minor possible M&A outflows. Issuer Profile Manuchar is a Belgium-based chemicals and commodities distributor, offering supply chain and logistics solutions globally. Date of Relevant Committee 19 June 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 ----------- ------ -------- Manuchar Group B.V. LT IDR B(EXP) Expected Rating senior secured LT B(EXP) Expected Rating RR4 =========== F R A N C E =========== ACCOR SA: Egan-Jones Withdraws BB Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company on June 18, 2025, withdrew its 'BB' foreign currency and local currency senior unsecured ratings on debt issued by Accor SA. EJR also withdrew the rating on commercial paper issued by the Company. Headquartered in Issy-les-Moulineaux, France, Accor, doing business as AccorHotels, operates a chain of hospitality company. EURO ETHNIC: Moody's Affirms B2 CFR & Rates First Lien Term Loan B2 ------------------------------------------------------------------- Moody's Ratings has affirmed Euro Ethnic Foods Bidco S.A.S.' (EEF or the company) corporate family rating of B2 as well as the probability of default rating of B2-PD. Moody's have assigned a B2 instrument rating to the proposed EUR785 million senior secured first lien term loan B2 due 2031 to be borrowed by EEF. Concurrently, Moody's have assigned a B2 instrument rating to the proposed EUR50 million senior secured revolving credit facility (RCF), also to be borrowed by EEF. The outlook remains stable. Proceeds from the new senior secured first lien term loan B2, together with EUR80 million of cash on balance sheet, are expected to be used to repay the company's existing EUR565 million senior secured first lien term loan B, fund a EUR290 million shareholder distribution and cover transaction costs. The additional debt increases leverage by approximately 1.4x, bringing EEF's Moody's-adjusted debt/EBITDA (leverage) to 6.5x in the financial year that ended March 31, 2025 (financial 2025), pro forma for the proposed transaction. While the dividend recapitalisation is credit negative and EEF's B2 rating will be weakly positioned initially, the rating action also reflects: -- EEF's solid financial performance in recent years and Moody's expectations that the company will continue to grow its revenue and EBITDA. -- Forward-looking key credit metrics remaining within Moody's expectations for the current rating category. Moody's forecasts that Moody's-adjusted leverage will reduce below 6x in the next 12-18 months, Moody's-adjusted (EBITDA-capex)/interest expense will remain above 2x, and Moody's-adjusted free cash flow (FCF)/debt will hover around 4%. RATINGS RATIONALE The B2 CFR reflects the company's: stable margins and steady revenue growth despite a changing macroeconomic backdrop; presence within the Grand Frais fresh food store, which grows faster than the traditional French grocery market because of ongoing customer preference for fresh and healthy products; positive FCF generation; and high profitability, with a Moody's-adjusted EBITDA margin of around 24% in financial 2025. At the same time, the company's rating is constrained by its high leverage, with Moody's-adjusted leverage of 6.5x in financial 2025 pro forma for the proposed transaction, resulting from a shareholder friendly financial policy; its small size compared with that of traditional grocers and that of Grand Frais, which could limit its pricing power; its credit linkage with and dependence on the success of the fruits and vegetables (F&V) business controlled by ZF Invest (Prosol, B2 stable), which is a key attraction for Grand Frais' customers; and the concentration of its earnings in one country, France (Government of France, Aa3 stable). EEF has performed strongly in financial 2025, reporting a 9% revenue growth. Of this, approximately 2% stem from the like-for-like growth of the mature retail perimeter, driven by both an increase in footfall and a higher average basket size. However, most of the growth (6%) came from new store openings and the ramp-up of non-mature stores, while the remaining contribution came from the BtoB business. The company's Moody's-adjusted EBITDA grew broadly in the same proportion as revenue, thanks to sustained margins with full cost inflation pass-through. EEF's performance reflects the growth in Grand Frais attendance driven by consumer preference for fresh and locally sourced food, successful marketing campaigns, as well as EEF's differentiated product offerings with limited direct price competition with other grocers. Moody's anticipates that EEF's annual revenue growth will remain around 10% over the next three years, consistent with the company's historical track record. This will mainly be driven by 25-30 new store openings per year, but Moody's also expects steady like-for-like growth of the mature retail perimeter, as well as a contribution from the ramp-up of the BtoB business. As such, Moody's expects Moody's-adjusted leverage to gradually decrease towards 5x during the same period assuming no change in borrowings. However, further shareholder-friendly actions such as dividend recapitalisations or debt-funded acquisitions could delay leverage reduction. A comprehensive review of all credit ratings for the respective issuer(s) has been conducted during a rating committee. COVENANTS Moody's have reviewed the marketing draft terms for the new credit facilities. Notable terms include the following: Guarantor coverage will be at least 80% of consolidated EBITDA (determined in accordance with the agreement and only companies incorporated in France and Luxembourg). Security will be granted over key shares, bank accounts and intra-group receivables, over certain subsidiaries. Incremental facilities are permitted up to 100% of EBITDA. Unlimited pari passu debt is permitted if the senior secured net leverage ratio (SSNLR) less than 4.5x. Unlimited junior debt is permitted if the secured net leverage ratio (SNLR) less than 5.25x. Unlimited total debt is permitted subject to a 2x fixed charge coverage ratio. Subject to no event of default, unlimited restricted payments are permitted if the SSNLR is less than 3.5x; or 4.0x where 50% funded from available amounts; or 4. 5x where 100% funded from available amounts. Subject to no insolvency event of default, unlimited restricted payments are permitted if the SSNLR is less than 3.5x within one year of a permitted change of control (a change of control permitted subject to SSNLR 5.3x and an equity value test). Unlimited restricted investments are permitted if SSNLR is less than 4.5x, or if such payment is funded from the available. Repayment of asset sale proceeds is subject to a leverage condition, with 100% being applied where SSNLR is less than 3.5x or 50% of asset sale proceeds are only required to be applied where SSNLR is 3.5x or greater. Adjustments to consolidated EBITDA include the full run rate of cost savings and synergies arising from actions expected to be taken, capped at 25% of consolidated EBITDA and believed to be realisable within 24 months of the relevant step being taken. The proposed terms, and the final terms may be materially different. LIQUIDITY Pro forma for the proposed transaction, EEF's liquidity is adequate. The company will have a limited amount of cash of EUR5 million, but access to a EUR50 million undrawn revolving credit facility (RCF) and overdraft facilities, which Moody's expects to cover its short-term working capital needs. Seasonal variations in working capital are substantial, with a cash outflow during September-November and a cash inflow during December-March. There is some, although limited, seasonality in the top line, with revenue peaking over the December-April period because of major annual events such as Christmas, Easter and Ramadan. Because of its high margins, Moody's expects EEF to maintain an interest cover above 2x and generate positive FCF over the next 12-18 months, such that FCF/debt hovers around 4%. Moody's expects capital spending excluding lease repayments to be around 4% of revenue and some negative working capital movements (EUR5-10 million). The RCF is subject to a springing senior secured net leverage covenant, tested on a quarterly basis when the RCF is drawn by more than 40%. Moody's expects the company to maintain a good headroom under this covenant. Following the transaction, the company will not have any significant maturity before 2031, when the proposed term loan B comes due. STRUCTURAL CONSIDERATIONS The EUR785 million senior secured first lien term loan B2 and the EUR50 million senior secured revolving credit facility, both borrowed by EEF are rated B2 reflecting their pari passu ranking and the presence of upstream guarantees from material subsidiaries of the group. The B2-PD probability of default rating, in line with the CFR, reflects the hypothetical recovery rate of 50%, which Moody's believes is appropriate for a capital structure comprising bank debt and with a single springing covenant under the RCF with significant headroom. RATING OUTLOOK The stable outlook reflects Moody's views that EEF's revenue and EBITDA will continue to grow over the next 12-18 months, such that Moody's-adjusted debt/EBITDA decreases below 6x, and Moody's-adjusted (EBITDA-capex)/interest expense remains above 2x, while continuing to generate positive FCF. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure on the ratings could arise if EEF's Moody's-adjusted (gross) debt/EBITDA declines well below 5.0x, its Moody's-adjusted FCF increases significantly, and the company establishes a track record of prudent financial policy, with no dividends or debt-funded acquisitions. A positive rating action would also necessitate a continued increase in the penetration rate, to significantly above 60%, among Grand Frais customers, coupled with a robust performance of the sister company, Prosol. Downward pressure on the ratings could arise if EEF's Moody's-adjusted (gross) debt/EBITDA increases sustainably above 6.0x, for instance, because of a downturn in the fresh food market or a material leveraging transaction; its Moody's-adjusted (EBITDA-capex)/interest expense falls towards 1.5x on a sustained basis; its liquidity deteriorates, such that, for example, it is unable to generate positive Moody's-adjusted FCF. Moody's could also consider downgrading the ratings if Grand Frais' partners, particularly Prosol's F&V business, display significant underperformance, leading to a disruption in the footfall at Grand Frais stores. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Retail and Apparel published in November 2023. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Headquartered in Lyon, France, Euro Ethnic Foods Bidco S.A.S. (EEF) is a member of the Grand Frais brand, a store network focused on fresh quality products. Each Grand Frais store spans around 1,000 square meters and sells five different types of products: grocery products, which are managed by EEF; and F&V, fish, meat and dairy products, which are managed by third-party companies. EEF holds a 25% stake in Grand Frais, while the remainder is split among three private companies: Despinasse, controlling 25%; and Prosol Gestion and Cremerie Exploitation, both controlled by the private equity fund Ardian, together holding a 50% stake in Grand Frais. EEF generated revenue of EUR675 million in financial year 2025, with 326 stores as of May 31, 2025. Each Grand Frais store is set up as a groupement d'intérêt économique (GIE), made of four legal entities (F&V and fish, dairy, meat, and grocery), collectively liable for the debt of the GIE, but independent from each other. Therefore, EEF does not have direct financial exposure to its partners. EEF is owned by PAI Partners, a private equity group. EEF was founded in 1929 by the Bahadourian family, who remain minority shareholders through their company Norkorz Capital. EUTELSAT COMMUNICATIONS: Moody's Puts B2 CFR on Review for Upgrade ------------------------------------------------------------------ Moody's Ratings has placed on review for upgrade the B2 long-term corporate family rating and the B2-PD probability of default rating of Eutelsat Communications SA (Eutelsat or the company), a global satellite operator. Concurrently, Moody's have placed on review for upgrade the B1 ratings on the senior unsecured debt instruments issued by its main operating subsidiary Eutelsat SA, including the EUR800 million notes due in October 2025 (currently EUR176.6 million outstanding), the EUR600 million notes maturing in July 2027, the EUR600 million notes due in October 2028, and the EUR600 million notes due in April 2029. Previously, the outlook on both entities was stable. The rating action follows the announcement on June 19, 2025 [1] that the company is working on a two-step equity raise of EUR1.35 billion which is already committed for EUR1.1 billion by the largest shareholders. The first step includes a EUR716 million reserved capital increase priced at EUR4 per share, led by France's Agence des Participations de l'Etat (APE), alongside shareholders including Bharti Space Limited, CMA CGM, and Le Fonds Stratégique de Participations. The second step includes a EUR634 million rights issue that will be subscribed by the same investors. As part of the deal, France's APE is acquiring the 13.6% stake in Eutelsat held by French state investment bank BPI, which will take the French state's stake to 29.99% pro forma the capital increase. The transaction should close by the end of 2025 the latest, subject to Eutelsat shareholders' approval at an extraordinary shareholders' meeting around September 2025. "Moody's have placed Eutelsat's ratings on review for upgrade because of the expected positive impact on the ratings following the increased ownership by the French government (Aa3 stable)" says Ernesto Bisagno, a Moody's Vice President - Senior Credit Officer and lead analyst for Eutelsat. "The action also factors in the positive impact on the credit metrics from the proposed capital increase, and the improved liquidity," adds Mr Bisagno. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS If the capital increase proceeds as planned, the French government (Aa3 stable) will increase its ownership to 29.99%, positively impacting the company's credit ratings. The rating will likely include Moody's assessments of the likelihood of government support, should the need arise. Furthermore, in connection with the capital increase, Eutelsat Communications and France's Ministry of the Armed Forces have signed a EUR1 billion framework agreement for LEO services, spanning up to 10 years, which offers additional revenue opportunities. In addition to that, the capital increase will strengthen credit metrics, with the company's reported net debt to EBITDA (pro-forma for the EUR1.35 billion capital increase) to decline to around 2.5x in the fiscal year 2026 in June. This marks an improvement from the earlier projection of around 3.5x. The equity raise also benefits the company's business profile, as it will allow the company to continue to invest in the LEO constellation, partially offsetting the technology risk. If the transaction is completed as planned, Moody's could upgrade the ratings by up to two notches. The review process will focus on (1) the successful completion of the rights issue under the terms publicly announced; (2) the implications for Eutelsat Communication SA's business profile, its strategic priorities and its investment program; (3) the strength of its liquidity profile post transaction and implications for the capital structure of the company; (4) the relationship between the company and the French government (Aa3 stable) which could result in a rating uplift based on Moody's assessments of the likelihood of government support, should the need arise. The company also provided a new long-term guidance whereby total revenue should increase towards EUR1.5 billion - EUR1.7 billion by fiscal 2029, at a CAGR growth of around 6.6%. The company also expect EBITDA margin to improve to at least 60%, up from the low 50% expected in fiscal 2025, largely driven by the positive contribution of increased scale. However, Moody's expects the company to generate negative free cash flow of around -EUR500 million each year on average over 2025-27, due to a substantial increase in total capital expenditures. The company plans to invest EUR2 billion between 2025 and 2029 to ensure Generation 1 continuity and achieve global coverage of the LEO constellation, alongside an additional EUR2 billion from 2028 for the IRIS 2 program. While the new guidance offers improved visibility into long-term earnings, the recovery should start materialising beyond 2026. In addition, Moody's recognizes the company's historical challenges in consistently meeting its guidance. Furthermore, Eutelsat Communications SA continues to face risks associated with potential overcapacity in the satellite industry, which could impact pricing power and utilization rates. These factors could pose challenges to achieving the projected growth and margins outlined in the guidance. Prior to placing the ratings on review for upgrade, Moody's said that an upgrade would require a substantial improvement in Eutelsat's operating performance driven by a combination of revenue and earnings growth, enhanced free cash flow (FCF) generation, and robust liquidity. Quantitatively, a rating upgrade would require its Moody's-adjusted EBITDA-Capex/Interest ratio to improve well above 1.5x. Although unlikely given the current review for upgrade, prior to placing the ratings on review for upgrade downward, Moody's said that rating pressure would develop if Eutelsat operating performance fails to stabilize, causing its Moody's-adjusted gross debt/EBITDA ratio to trend towards 5.5x on a sustained basis, or if its liquidity deteriorates given the significant funding needs that the company will encounter over the next 2 to 3 years. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS The decision to place the ratings on review for upgrade reflects corporate governance considerations associated with Eutelsat's decision to raise equity in order to achieve a lower leverage, in line with its commitment to reduce reported net debt/EBITDA to 3.0x. Financial strategy and risk management is a governance consideration under Moody's General Principles for Assessing Environmental, Social and Governance Risks methodology. LIQUIDITY The proposed EUR1.35 billion capital increase will enhance liquidity by supplying additional funding and boosting financial flexibility. In December 2024, liquidity was underpinned by cash and cash equivalents of EUR693 million (EUR517 million pro forma for the 2025 outstanding maturities). In addition, the company had access to a EUR450 million revolving credit facility (RCF) at Eutelsat SA maturing in April 2027 (plus two extension options at lenders discretion) and to a EUR100 million RCF at Eutelsat Communications SA due in June 2027, both fully undrawn in December 2024. Liquidity should also benefit from the carve out of Eutelsat's passive ground infrastructure assets which should bring proceeds of around EUR600 million in 2026. The next maturities include the EUR400 million term loan due in June 2027 and the EUR600 million senior unsecured bond due in July 2027. Eutelsat SA's access to committed bank facilities is restricted by a net leverage covenant set at net debt/EBITDA below 4.0x for the facilities at the Eutelsat SA level; while at the Eutelsat Communications SA level, the net leverage covenant tightens to 4.5x until 2025 and 4.0x beyond 2025. Moody's expects sufficient headroom over the next 12 months, particularly in light of the healthier cash position following the closing of the transactions. STRUCTURAL CONSIDERATIONS Eutelsat SA is the main operating company of the Eutelsat Communications SA group. Moody's have the B2 CFR at Eutelsat Communications SA. The senior unsecured bonds issued at Eutelsat SA are currently rated B1, one notch higher than the CFR. The higher instrument rating takes into account the fact that the EUR400 million of debt at Eutelsat Communication SA level is structurally subordinated to the debt raised at Eutelsat SA, which is closer to the cash-flow-generating assets. The EUR600 million senior unsecured bond issued in April 2024 at Eutelsat SA includes certain covenants that restrict the ability of Eutelsat SA to upstream cash outside its restricted group. This mainly includes limitation on restricted payments if net leverage is above 2.75x, with a basket of EUR1.4 billion for OneWeb capex, subject to meeting a maximum pro-forma leverage of 3.25x. This mainly includes limitation on restricted payments if net leverage is above 2.75x, with a basket of EUR1.4 billion for OneWeb capex, subject to meeting a maximum pro-forma leverage of 3.25x. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Communications Infrastructure published in February 2022. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Eutelsat SA is the main operating subsidiary of Eutelsat Communications SA, which was created in 1977 and is headquartered in Paris (Eutelsat). Eutelsat Communication SA is one of Europe's leading satellite operators and one of the top-three global providers of Fixed-satellite services. The company's fleet of 36 geostationary satellites and 634 LEO satellites reaches up to 150 countries in Europe, Africa, Asia and the Americas. In fiscal year 2024, the company generated EUR1.2 billion of revenues and adjusted EBITDA of EUR698 million. HESTIAFLOOR 2: Fitch Affirms 'B' LongTerm IDR, Outlook Positive --------------------------------------------------------------- Fitch Ratings has affirmed Hestiafloor 2's (Gerflor) Long-Term Issuer Default Rating (IDR) at 'B' with a Positive Outlook. Fitch has also affirmed the company's existing senior secured debt rating at 'B+' with a Recovery Rating of 'RR3'. This follows the announcement of a proposed repricing and increase of the existing EUR900 million senior secured term loan B (TLB) with EUR50 million add-on to finance near-term acquisitions during 2025. The proposed add-on will leave no headroom for additional debt at 'RR3'. The affirmation reflects Gerflor's acquisitive growth strategy with a solid business profile and sound profitability. The group has recently improved its leverage profile, resulting in higher rating headroom, but Fitch expects limited further deleveraging. The Positive Outlook reflects expected continued sound operating profitability supported by the group's end-market diversification and focus on more resilient renovation end-markets. Key Rating Drivers Reduced Leverage: The rating is supported by the reduction in leverage over 2022-2024 and expected modest deleveraging over the next four years. Fitch estimates Fitch-defined EBITDA leverage of about 5.4x at end-2025 (compared with the positive rating sensitivity of 5.5x), with gradual deleveraging to about 5x by end-2027, mainly driven by mid-single-digit revenue growth and a modest increase in EBITDA margins. Fitch assumes positive free cash flow (FCF) in 2025-2028 will be mainly deployed on continued M&A bolt-on acquisitions. No Headroom at 'RR3': The EUR50 million increase of the TLB, combined with the increased usage (EUR91 million as of June 2025) of factoring and first-lien secured bank overdrafts and loans (EUR81 million), have eliminated any headroom for a ranked recovery 3 category (RR3) for the senior secured debt (EUR950 million TLB and EUR210 million revolving credit facility; RCF). A further increase in factoring usage, the RCF or secured bank overdrafts/loans would, on otherwise unchanged assumptions, lead to a downgrade of Gerflor's senior secured debt rating. Continued Acquisitive Strategy: Fitch expects Gerflor to continue its M&A-driven growth strategy and assume total new net acquisitions of about EUR40 million annually over 2025-2028. Fitch expects acquisitions to be moderate in size and financed by the add-on and internally generated cash flows. The group has a successful integration record and policy of acquiring companies with a clear strategic fit at sound valuation multiples. Nevertheless, the M&A pipeline, deal parameters and post-merger integration remain important rating drivers. Resilient Operating Profitability: Fitch expects continued resilient operating profitability, mainly supported by the group's sound end-market diversification and focus on more resilient renovation end-markets with limited exposure to pressured residential and office end-markets. Fitch expects continued normalisation of raw material and transportation costs over the rating horizon. The group's profitability will be further supported by the contribution from new bolt-on acquisitions and new product launches. Positive FCF Through the Cycle: Fitch expects a positive FCF margin of about 2% annually in 2025-2028. Fitch expects that increasing operating profitability will be partly offset by continued high interest costs, significant growth capex and working-capital investments required to support Gerflor's expected mid-single-digit revenue growth. Solid Business Profile: Gerflor's business profile is supported by strong positions in several flooring segments across geographic regions and end-customer segments, and focus on resilient renovation end-markets. Gerflor's contract division is driven by renovation flooring, which is less cyclical than new build and accounts for 75%-80% of revenue, with exposure to stable commercial end-markets such as education, healthcare and transport. Gerflor has minimal exposure to pressured residential housing flooring in Europe. Peer Analysis Gerflor has a leading market position in its resilient niche flooring segment and is larger than building product peers such as Terreal Holding SAS or PCF GmbH (CCC+), and similar in size to Victoria PLC (CCC+). It is much smaller than Mohawk Industries, Inc. (BBB+/Stable) and slightly smaller than Tarkett Participation (B+/Positive). Gerflor has better geographical diversification than Victoria, although both have fairly high exposure to Europe. Tarkett is more geographically diversified. Like most building-product companies, Gerflor has limited product differentiation but has developed innovative product solutions, enabling it to cater to a wide range of end-customers. Gerflor's distribution channels result in a strong exposure to renovation or refurbishment construction activities similar to that of Tarkett. Gerflor's EBITDA margins (around 13%) are stronger than those of higher-rated peers Tarkett (5%-7%) and Victoria (6%-11%). Fitch sees Gerflor's leverage profile as weaker and expect EBITDA gross leverage of 5.4x-4.9x in 2025-2027 compared with 4.4x-4.2x for 'B+' rated peer Tarkett over the same period. Key Assumptions - Revenue to grow by 4.1% in 2025 on organic growth and acquisitions and price, followed by low single-digit growth in 2026-2028 - EBITDA margin around 13.5% in 2025-2028, reflecting supportive end-markets - Capex at 3.5% of revenue in 2025-2028 - M&A of around EUR50 million in 2025 and EUR40 million in 2026-2028 - Add-on transaction as proposed, and limited dividend pay-out in 2025 Recovery Analysis The recovery analysis assumes that Gerflor would be reorganised as a going concern in bankruptcy rather than liquidated. Fitch assumes a 10% administrative claim. Factoring line and other credit facilities rank super senior. The going-concern EBITDA estimate of EUR150 million (up from EUR140 million) reflects the most recent and ongoing debt-funded acquisitions at adequate multiples and its view of a sustainable, post-reorganisation EBITDA upon which Fitch bases the valuation of Gerflor. In this scenario Gerflor would generate neutral to negative FCF. Fitch uses an enterprise value multiple of 5.5x to calculate a post-reorganisation valuation. This reflects Gerflor's leading position in its niche markets (such as sport and transport), long-term relationship with blue-chip clients and a loyal customer base due to its direct distribution channel. Based on the upcoming repricing and increase, its waterfall analysis generates a ranked recovery for the senior secured debt (new EUR950 million term loan B and EUR210 million RCF) in the 'RR3' category (without headroom for additional debt), leading to a 'B+' rating for the secured debt. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 7.0x - EBITDA interest coverage below 2.5x - EBITDA margin below 12% - Neutral to negative FCF margin Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Application of conservative financial policy with EBITDA gross leverage below 5.5x - Higher operating margin leading to FCF margin in mid single digits - Greater diversification across segments or geographies Liquidity and Debt Structure At end-December 2024, Gerflor had around EUR64 million of Fitch-adjusted cash balance (excluding about EUR14 million restricted for intra-year working capital swings) and access to EUR210 million RCF (undrawn) due 2029. Fitch forecasts that positive FCF in 2025-2028 will be mainly deployed on ongoing M&A bolt-on acquisitions. The group's debt structure is focused on its EUR900 million TLB due 2030, which is being increased to EUR950 million. Issuer Profile France-based Gerflor specialises in resilient flooring (vinyl and linoleum), and walls and finishes solutions primarily sold to commercial customers. Operations are primarily in Europe, with some in the Americas and Asia Pacific. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Hestiafloor 2 LT IDR B Affirmed B senior secured LT B+ Affirmed RR3 B+ IDEMIA GROUP: Moody's Affirms 'B2' CFR & Alters Outlook to Negative ------------------------------------------------------------------- Moody's Ratings changed IDEMIA Group S.A.S.'s (IDEMIA or the company) outlook to negative from stable. Concurrently, Moody's have affirmed IDEMIA's B2 long term corporate family rating and B2-PD probability of default rating, as well as the B2 ratings of the backed senior secured revolving credit facility (RCF) and backed senior secured term loan B's issued by the company. RATINGS RATIONALE The rating action reflects the recent weaker performance of the company that has led to a deterioration of credit metrics to levels outside of Moody's expectations for the B2 ratings and although Moody's expects improvement, execution risks around achieving improvement to credit metrics commensurate with the current rating exist. Furthermore, the envisaged divestment of the Smart Identity division would weaken the company's business profile, with an uncertain impact on credit metrics, depending on the proceeds allocated to debt reduction. Additionally, the recent depreciation of the USD in relation to the EUR could also create pressure on profitability. As of the last twelve months to March 2025, Moody's-adjusted leverage and free cash flow (FCF) / debt were at 6.1x and -4.5%, outside the expectations for the B2 ratings, though FCF is highly impacted by negative working capital outflows and extraordinary items related to IDEMIA's reorganization. Moody's forecasts some improvement in performance towards the second half of the year, informed by the company's 2025 guidance. However, execution risks are high, considering tariff uncertainty as well as potential pressure on government related contracts in the US, for instance. Continued margin deterioration in the Secured Transactions division would likely create downward ratings pressure. The prospective sale of the Smart Identity division (around EUR100 million company-adjusted EBITDA in 2024) to IN Groupe would lead to a smaller size and weaker business profile. The new capital structure of IDEMIA following the disposal and respective use of proceeds will also be an important consideration for the rating trajectory. According to the 2024 audited report, which considers a continuing operations perimeter that excludes the smart identity segment, Moody's-adjusted leverage was 6.8x. Moody's estimates weaker performance during the first quarter of 2025 has weakened leverage to around 7.7x. For point-in-time leverage to reduce to levels commensurate with the current rating, significant repayment of Moody's-adjusted debt would be necessary. IDEMIA's B2 ratings reflect the high barriers to entry in IDEMIA's various business lines; the company's strong market share in its key segments and ability to win and renew contracts; its good geographical and customer diversification; and its good liquidity. The company's relatively limited recurring revenue and a lack of visibility in certain business lines, because of the unevenness of new contracts and renewal cycles; technological risks inherent in its business model; and an aggressive financial policy highlighted by the significant debt increase to fund a dividend during 2023, all constrain the rating. RATING OUTLOOK The negative outlook reflects the execution risks associated with the expected performance of the company during 2025 and 2026 and overall profitability trajectory of its Secured Transactions and Public Security divisions. LIQUIDITY IDEMIA has good liquidity, supported by EUR259 million of cash on balance as of March 2025 and a fully undrawn EUR300 million backed senior secured RCF. The backed senior secured RCF has a springing leverage covenant that is only tested once 35% of the facility is drawn. If tested, the maximum net leverage is set at 7.8x, which Moody's currently do not expect to be breached. STRUCTURAL CONSIDERATIONS IDEMIA's backed senior secured term loans and backed senior secured RCF rank pari passu and are rated B2, in line with the CFR, reflecting the absence of any significant liabilities ranking ahead or behind. The PDR of B2-PD is aligned with the CFR, reflecting Moody's assumptions of a 50% family recovery rate, in line with Moody's practices for covenant-lite all-first-lien loan capital structures. The senior secured facilities benefit from guarantees equivalent to a minimum of 80% of the company's EBITDA and gross assets. The security package includes share pledges, along with pledges over bank accounts and intercompany receivables, which Moody's considers weak. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although unlikely at this stage, positive rating pressure could develop if the company establishes a longer track record of profitability returning to 2023 levels; Moody's-adjusted leverage improves to below 4.5x, Moody's-adjusted FCF/debt improves towards 10% and EBITA/interest expenses improves towards 3.0x, all on a sustained basis. Adequate liquidity and clarity regarding financial policy which could accommodate a higher rating are also important considerations. Further negative rating pressure could develop if revenue and EBITDA fail to improve; Moody's-adjusted leverage remains above 5.5x, Moody's adjusted FCF/debt remains negative or around breakeven, or EBITA/interest expenses continues below 2.0x, all on a sustained basis. Deteriorating liquidity could also lead to downwards rating pressure. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Manufacturing published in September 2021. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Headquartered in Courbevoie, France, IDEMIA is an international company that develops, manufactures and markets specialized security technology products and services mainly in identity & public security, payments and telecommunications markets. The company is organized along three divisions: IDEMIA Secure Transactions (key products include payment cards, SIM cards, solutions for digital payment and digital connectivity), IDEMIA Smart Identity and IDEMIA Public Security (key products include secured physical or digital identification solutions, biometric systems for public security verticals such as border control, law enforcement, access control). IDEMIA generated revenue of EUR2.7 billion and company-adjusted EBITDA of EUR560 million in the last twelve months ended in March 2025. The group has been majority-owned by funds controlled by Advent International since 2011, when the private-equity sponsor purchased Oberthur for EUR1.1 billion (or company-adjusted EBITDA of 9.1x in 2011). Oberthur subsequently completed the acquisition of Safran's identity and security business, Morpho, on May 31, 2017 for a total consideration of EUR2.4 billion (or company-adjusted EBITDA of 11.9x in 2016). As part of the Morpho acquisition, Advent International was joined by BpiFrance as a minority investor. ============= G E R M A N Y ============= PONY SA 2023-1: Fitch Hikes Rating on Class F Notes to 'BBsf' ------------------------------------------------------------- Fitch Ratings has upgraded Pony S.A., Compartment German Auto Loans 2023-1 (Pony 2023) class E and F notes and affirmed the others. Fitch has also affirmed Pony S.A., Compartment German Auto Loans 2024-1 (Pony 2024), as detailed below. Entity/Debt Rating Prior ----------- ------ ----- Pony S.A. Compartment German Auto Loans 2023-1 Class A XS2696128433 LT AAAsf Affirmed AAAsf Class B XS2696129241 LT AA+sf Affirmed AA+sf Class C XS2696129670 LT A+sf Affirmed A+sf Class D XS2696129837 LT BBB+sf Affirmed BBB+sf Class E XS2696130173 LT BB+sf Upgrade BBsf Class F XS2696130330 LT BBsf Upgrade BB-sf Pony S.A., Compartment German Auto Loans 2024-1 A XS2845208664 LT AAAsf Affirmed AAAsf B XS2845211023 LT AA+sf Affirmed AA+sf C XS2845211296 LT AA-sf Affirmed AA-sf D XS2845211379 LT A-sf Affirmed A-sf E XS2845211536 LT BB+sf Affirmed BB+sf F XS2845211882 LT BBsf Affirmed BBsf Transaction Summary The transactions are securitisations of German auto loans originated by Hyundai Capital Bank Europe GmbH (HCBE). After the end of the revolving periods, the class A notes started to amortise in both transactions. Once the over-collateralisation threshold is reached, the class A to F notes will pay down pro rata until a performance or other trigger is breached. KEY RATING DRIVERS Stable Performance, Revised Asset Assumptions: The transactions' performance has been stable since closing and in line with its expectations. 30+ days delinquent loans were 0.7% in Pony 2023 and 0.4% in the less seasoned Pony 2024 at the latest payment date in June 2025. Fitch reviewed the transactions' asset assumptions in view of its economic expectations. The labour market has lost some of its previous strength, but real wages have continued improving. The latter drives its default base case of 1.3%, unchanged for Pony 2024 and down from 1.5% for Pony 2023, which originally reflected the possibility of portfolio migration towards replenishment limits. Fitch has revised the default multiples to 6.5x from 6.75x for both deals, primarily due to the end of the revolving periods. The resulting 'AAA' rating default rate is 8.5%, down from 10.1% for Pony 2023 and from 8.8% for Pony 2024. The revision of asset assumptions is the key driver of the upgrades of class E and F notes in Pony 2023. Pro Rata Principal Allocations: The repayment of the notes depends on the length of pro rata allocation of principal, which begins once over-collateralisation for the class A notes increases to at least 11%. At the latest payment date in June 2025, the target had not yet been reached, so both transactions have been amortising sequentially since closing. In its driving 'AAA' scenario, principal is allocated pro rata for 14 months in Pony 2023 and 12 months in Pony 2024. In its 'BB' scenario, allocations are pro rata for a substantial part of the transactions' lifetime. Only the trigger related to the outstanding asset balance ultimately forces the structure into sequential payment once the remaining asset balance falls below 10% of the initial asset balance. Reserve Funding Through Unrated HCBE: Rating triggers for the funding of a commingling and replacement servicer fee reserve by HCBE refer to Santander Consumer Bank AG's rating (SCB; A/Stable), which has a 51% stake in HCBE. SCB will post a commingling and replacement servicer fee reserve if it is rated below 'BBB+'. Fitch consider the reference to SCB's rating adequate for this purpose, based on its assessment of the bank's investment objectives and HCBE's relevance in SCB's long-term strategic targets. Counterparty Risks Addressed: The transactions feature liquidity reserves that provide adequate protection against payment interruption risk and sufficient liquidity support in case of servicing disruption until a subsequent servicer is appointed. Further factors addressing the servicing continuity risk are the availability of third-party servicers in the German market and an appointed facilitator to take care of the servicer replacement process. Remedial actions for the transaction account bank and swap counterparty are adequately defined and in line with its counterparty criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade An unanticipated deterioration in asset performance leading to higher defaults, or a decrease in recovery rates, could have a negative impact on the ratings. This could be due to a worsening macroeconomic environment or an adverse change in business practices, among others. The results are shown below for the class A/B/C/D/E/F notes for Pony 2023 and Pony 2024, respectively: Expected impact on the notes' ratings of default rates increased by 10% and recovery rates reduced by 10%: 'AA+sf'/'AA-sf'/'Asf'/'BBBsf'/'BB+sf'/'BBsf'; 'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BB+sf'/'BBsf' Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The class A notes in both transactions have the highest achievable rating and cannot be upgraded. Better-than-expected asset performance with lower default and an increase in recovery rates could have a positive impact on the ratings of other tranches. The results are shown below for the class A/B/C/D/E/F notes for Pony 2023 and Pony 2024, respectively: Expected impact on the notes' ratings of default rates reduced by 10% and recovery rates increased by 10%: 'AAAsf'/'AA+sf'/'AA-sf'/'Asf'/'BBBsf'/'BBB-sf'; 'AAAsf'/'AA+sf'/'AAsf'/'A+sf'/'BBB+sf'/'BBBsf' USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. 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 transactions 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. 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. TECHEM VERWALTUNGSGESELLSCHAFT: Fitch Rates Sr. Notes 'B+(EXP)' --------------------------------------------------------------- Fitch Ratings has assigned Techem Verwaltungsgesellschaft 675 mbH's proposed EUR1 billion senior secured notes a 'B+(EXP)' expected rating with a Recovery Rating of 'RR3'. Simultaneously, Fitch has affirmed Techem Verwaltungsgesellschaft 674 mbH's (Techem) Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook. Part of the proceeds will be used to repay the company's EUR364 million due 2026 senior unsecured notes, while the remainder, together with its cash on balance, will fund a shareholder distribution of almost EUR730 million. The IDR affirmation reflects its view that Techem's leverage remains comfortably aligned with the rating, despite its re-leveraging, with a 6.2x EBITDA leverage forecast for end-2025. Forecast solid EBITDA increases may provide rating upside, by reducing EBITDA leverage below its 6.0x positive sensitivity. The assignment of a final rating is contingent on the completion of the transaction and the receipt of final documents conforming to information received. Fitch has withdrawn the ratings on Techem's revolving credit facilities as they are no longer considered to be relevant for the coverage. Key Rating Drivers Rational Re-leveraging after Sale Setback: Partners Group and the equity consortium, together the main shareholders of Techem, have decided to remain invested and re-leverage the capital structure in accordance with the limits included in the financial documentation, following the unsuccessful sale of majority ownership to TPG and GIC. Gross debt will rise by around EUR630 million, which represents a EUR250 million increase on the level before the unsuccessful sale, corresponding to 5.5x company-defined EBITDA net secured leverage. Such a level is still comfortably below the Fitch-adjusted EBITDA leverage of 7.0x, which represents the main negative rating trigger. Rating Upside from Margin Expansion: Fitch forecasts Techem's Fitch-adjusted EBITDA leverage will be 6.2x in 2025 (adjusted for leases and run-rate adjustments), down from almost 7.0x in 2022, after it bottomed out at 5.7x in 2024. This was mainly driven by improved EBITDA, reflecting price increases, an expanding installed base, new product launches, digitalisation and cost savings. Further EBITDA growth prospects should allow the company to deleverage below its positive rating sensitivity of 6.0x by 2027, when Fitch expects Fitch-defined EBITDA of about EUR580 million. However, this is subject to Techem maintaining an unaggressive financial policy with no dividends, debt-funded M&A and re-leveraging, which cannot be taken for granted considering shareholding uncertainties. High but Flexible Capex: Fitch expects the company to invest about EUR200 million a year in 2025-2027, mostly in its energy sub-metering, with the replacement cycle in sub-metering and smoke detectors devices driving capex higher. This, alongside interest costs and about EUR40 million in working capital outflows, will lead to around EUR40-50 million of positive free cash flow (FCF) a year, which is likely to be absorbed by bolt-on M&A. Fitch assumes that capex is partially discretionary, leaving the company room to scale back or postpone investments, although lower capex will limit EBITDA expansion. Strong Operating Performance Continues: Techem's operational performance was solid in the six months to March 2025, with a strong increase in revenue and EBITDA driven by its energy services solutions. Revenue rose 10.6% to EUR669 million, while EBITDA increased 11.1% to EUR356 million (company-adjusted figures, while Fitch-defined EBITDA is lower for leases and run-rate adjustments). The positive performance was driven by increased billing revenues and the successful rollout of multi-sensor devices. Prudent cost management, alongside cost-saving initiatives, helped boost the result. Infrastructure-Driven Value Proposition: Fitch expects the company's medium-term strategy to target a wider coverage of dwellings in Germany and abroad and focus on higher-value, cash-generative subsectors. This, together with technological upgrades to smart readers and product expansions, may lead to higher cost efficiencies, potentially covering the full energy value chain for homes. Techem has historically focused on value enhancement through infrastructure development over maximising cash flow generation, which is positive for its long-term development potential. Favourable Operating Environment: The adoption of sub-metering is supported by the EU Energy Efficiency Directive. However, adoption by member states within the EU is slow and affects the timing of revenue expansion for operators like Techem. Stricter market regulations may require additional investments, including potential technical enhancements to allow inter-operability. Fitch continues to view Techem's operating environment as stable and supportive over the medium term, despite the risk of stricter regulation, which cannot be ruled out even in the core Germany market. Senior Secured Rating: Techem's 'B+(EXP)' senior secured debt benefits from a one-notch uplift from its IDR, reflecting pledges over the shares of the issuer and guarantors (totaling around 96% of consolidated EBITDA for the last 12 months to March 2025), and their material bank accounts. The allowed senior secured debt headroom under the indebtedness clause in the financing documentation is limited in the short term after this new issuance, but there is material debt headroom under the senior unsecured debt class. Peer Analysis Techem's business profile is similar to infrastructural and utility-like peers and corresponds to the 'BBB' category. It has proven to be resilient through the Covid-19 pandemic and has shown stable performance through the cycle. It is constrained by high gross leverage and pressured FCF generation. Its focus on the expansion of its smart reader network lends itself to comparison with pure telecom networks, such as Cellnex Telecom S.A. and Infrastrutture Wireless Italiane S.p.A. (both rated BBB-/Stable) and TDC NET A/S (BB/Stable). These entities have comparable leverage, and their high capex is demand-driven and led by infrastructural expansion, as is most of Techem's. However, their sector, scale and tenant stability provide for a higher debt capacity. Techem is also comparable with highly leveraged business services operators, such as Nexi S.p.A. (BBB-/Stable), which has a similar billing model on a wide portfolio of customers in a favourable competitive environment. Nexi's secular growth prospects are stronger than Techem's, and the former has lower leverage and higher FCF conversion. Key Assumptions Fitch's Key Assumptions Within its Rating Case for the Issuer - Revenue to rise on average 3.6% for FY25-FY27 - EBITDA margins (as defined by Fitch), improving to about 50% by FY27, driven by the expansion in digital services, price revisions and cost-efficiency programmes - Working capital outflow at an average EUR45 million a year over FY25-FY27 - Capex averaging about EUR210 million a year over FY25-FY27 - M&A averaging around EUR55 million a year until FY27 - Dividend payments of about EUR730 million in FY25 - New EUR1 billion senior secured notes issuance and repayment of the EUR364 million outstanding senior unsecured bond Recovery Analysis The recovery analysis assumed that Techem would be reorganised as a going concern in bankruptcy rather than liquidated, based on its strong cash flow generation through the cycle and asset-light operations. Its installed base and contractual portfolio are key intangible assets of the business, which are likely to be operated after bankruptcy by competitors with higher cost efficiency. Fitch has assumed a 10% administrative claim. Fitch estimates a going concern EBITDA of EUR400 million to fully reflect Techem's structural shift towards a a more resilient business profile. At this level of EBITDA, Fitch expects Techem to generate mildly positive FCF after corrective measures are taken, particularly on central costs and capex, in response to financial distress. Fitch assumed a distressed multiple of 7.0x, considering Techem's stable business profile and comparing it with similarly cash-generative peers with infrastructure and utility-like business models. Its debt waterfall includes a fully drawn increased revolving credit facility of EUR398 million and the proposed issue of new senior secured notes of EUR1 billion. This results in ranked recoveries in the 'RR3' band for the senior secured debt (including the upcoming issue) in 'RR6' for the senior unsecured notes, which will be repaid with the proposed notes issue. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage sustainably above 7.0x with no sign of deleveraging - EBITDA interest coverage trending to or below 2.0x on a sustained basis - Departure from financial policy of debt reduction and zero dividends or debt-funded M&A - Reduced EBITDA leading to an inability to maintain positive FCF on a sustained basis - Deterioration in refinancing conditions or opportunities Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage below 6.0x on a sustained basis, supported by a consistent financial policy - EBITDA interest coverage trending to or above 3.0x - Commitment to financial policy of zero dividends or debt-funded M&A - FCF trending towards neutral to positive territory Liquidity and Debt Structure Fitch assesses Techem's liquidity as satisfactory. It had a cash balance of about EUR127 million at end-March 2025 and an undrawn revolving credit facility of EUR398 million, with EUR10 million blocked by guarantees. The revolving credit facility includes EUR375 million maturing in January 2029 and EUR23.4 million maturing in June 2025. The company uses the facility throughout the year to finance intra-year working capital swings. Techem's senior secured term loan B and senior secured notes both mature in 2029. The company has EUR364 million senior unsecured notes due in 2026, which it will refinance with the proceeds from the proposed EUR1 billion senior secured notes. Issuer Profile Techem is a Germany-based heat and water sub-metering services operator active in submetering installation and services in Europe. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Techem has an ESG Relevance Score of '4' [+] for Energy Management due to the company's role in energy efficiency initiative as a metering service provider, which has a positive impact on the credit profile, , and is relevant to the ratings in conjunction with other factors. Techem has an ESG Relevance Score of '4' [+] for GHG Emissions & Air Quality as the company provides solutions to optimise energy costs, increase energy efficiency and minimise CO2 emissions. This has a positive impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Techem Verwaltungsgesellschaft 674 mbH LT IDR B Affirmed B senior unsecured LT CCC+ Affirmed RR6 CCC+ Techem Verwaltungsgesellschaft 675 mbH senior secured LT B+(EXP)Expected Rating RR3 senior secured LT B+ New Rating RR3 B+(EXP) senior secured LT WD Withdrawn senior secured LT B+ Affirmed RR3 B+ senior secured LT WD Withdrawn senior secured LT B+ Affirmed RR3 B+ TECHEM VERWALTUNGSGESELLSCHAFT: Moody's Affirms 'B2' CFR -------------------------------------------------------- Moody's Ratings has affirmed the B2 corporate family rating, and the B2-PD probability of default rating of Techem Verwaltungsgesellschaft 674 mbH (Techem or the company) and affirmed the Caa1 rating of the backed senior secured second lien notes due 2026 issued by Techem, which Moody's expects to withdraw upon full repayment. Moody's also affirmed the B2 rating of all senior secured notes and senior secured bank credit facilities issued by Techem Verwaltungsgesellschaft 675 mbH. The outlook remains stable. Moody's also assigned B2 ratings to the anticipated combined EUR1000 million senior secured fixed and floating rate notes maturing 2032 that will be used to fund the repayment of the backed senior secured second lien notes and to fund a distribution to shareholders. The issuance follows a special mandatory redemption of EUR750 million temporary notes in May 2025 in connection with a proposed acquisition of Techem by a consortium of TPG and GIC that was subsequently cancelled. RATINGS RATIONALE The affirmation of the B2 CFR with the stable outlook reflects the strong profitability of the group, driven by its leading position in the German sub-metering market and growing supplementary services business; good revenue visibility and stability because of the non-discretionary nature of demand for energy services, long-term contracts with limited customer churn rates and a supportive regulatory environment; solid market position, with strong customer loyalty and high barriers to entry because of the significant investment requirements to replicate Techem's business model; and strong EBITDA growth in the last two years that will result in financial metrics in line with Moody's guidances for the B2 ratings despite the additional debt. Techem's rating is constrained by the group's high Moody's-adjusted leverage ratio of 6.6x pro forma for the transaction; modest geographical diversification outside of Germany; the lower profitability of Techem's energy efficiency solutions business and low free cash flow generation, considering material capital spending. Governance was a driver of the rating action. This reflects the additional debt funded dividend expected to be paid as part of the transaction, while credit metrics are likely to remain within the expectations for the current rating. LIQUIDITY Techem's liquidity is adequate. The group's internal cash sources will comprise around EUR35 million of cash and cash equivalents pro forma for the transaction, as well as Moody's-adjusted cash flow from operations of above EUR250 million for the last twelve months ending March 2025. Internal cash sources and a EUR375 million revolving credit facility (RCF) will cover all expected cash needs in the next 12-18 months. Cash uses mainly include capital spending of around EUR170 million during the 12 months that ended March 2025 that Moody's expects to increase above EUR200 million, next to moderate M&A spending. The liquidity assessment also takes into account that there is one springing covenant (a senior secured net leverage ratio) attached to the RCF, which will be tested if the RCF is drawn by more than 40% and currently has ample capacity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS WHAT COULD CHANGE THE RATINGS UP -- Leverage (Moody's-adjusted gross debt/EBITDA) below 6 x on a sustained basis -- Sustainable solid positive Moody's-adjusted free cash flow -- EBITA/Interest sustainably maintained well above 2x -- Track record of a prudent financial policy, illustrated by its available cash flow being applied to debt reduction WHAT COULD CHANGE THE RATINGS DOWN -- Inability to maintain leverage materially below 7x debt/EBITDA, including dividend distributions that could delay deleveraging -- EBITA/Interest sustainably falling below 1.5x -- Negative Moody's-adjusted FCF on a sustained basis STRUCTURAL CONSIDERATIONS Techem Verwaltungsgesellschaft 675 mbH's senior secured EUR1.85 billion term loan B5 and its EUR375 million senior secured RCF rank pari passu with the current EUR500 million issue of senior secured notes alongside the anticipated EUR1000 million issuance after the company redeemed its EUR750m temporary notes issued in 2024 The term loan B (TLB), the senior secured notes and the RCF share the same security and are guaranteed by certain subsidiaries of the group that account for at least 80% of consolidated EBITDA. The calculations exclude EBITDA generated by certain non-German operations, which results in a group-wide guarantor EBITDA coverage of 74.2% for the twelve months ended 31 March, 2025. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. The difference between the scorecard indicated outcome and the assigned rating mainly reflects the increased risk appetite coming from a private equity ownership that comes with higher tolerance for financial leverage. COMPANY PROFILE Headquartered in Eschborn, Germany, Techem Verwaltungsgesellschaft 674 mbH (Techem) is a leading provider of energy services. Techem operates through two divisions — energy services (accounting for 89% of group sales in the 12 months that ended March 2025) and energy efficiency solutions (11%). In the 12 months that ended March 2025, Techem generated total revenue of EUR1,122 million, of which 76% was generated in Germany. Since 2018, Techem is owned by a consortium led by Partners Group, a private markets firm. TECHEM VERWALTUNGSGESELLSCHAFT: S&P Affirms 'B+' ICR ---------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term issuer credit rating on Techem Verwaltungsgesesellschaft 674 GmbH (Techem) and its 'B+' issue credit rating with a '3' recovery rating (50%-70%; 60%) in the event of a payment default on the EUR3.35 billion senior secured debt (including the proposed incremental EUR1 billion senior secured debt) issued by subsidiary Techem Verwaltungsgesellschaft 675. The terminated share purchase agreement for Techem and its subsidiaries has triggered a mandatory redemption of its EUR750 million senior secured notes and accrued interest due in 2029. The majority ownership remains with Partners Group, while the EUR1.6 billion deferred equity payment to fund the change in ownership ceases to exist. Techem plans to refinance its EUR364 million outstanding senior unsecured notes due in 2026 and distribute about EUR728 million to shareholders by issuing EUR1 billion new senior secured notes due July 2032 and using cash on the balance sheet. S&P Global Ratings revised its outlook on Techem following the termination of the share purchase agreement with TPG Inc. and GIC Private Ltd., announced on May 27, 2025. S&P said, "Our outlook revision reflects that Techem's credit metrics are stronger than we previously forecast for fiscal 2025 due to the terminated transaction, particularly given we considered the EUR1.6 billion deferred equity payment forming part of the purchase price as debt. The termination also triggered a special mandatory redemption of the EUR750 million temporary senior secured notes, issued on Nov. 14, 2024, in connection with the proposed acquisition. As a result, Techem plans to refinance its outstanding EUR364 million senior unsecured notes due in July 2026 and distribute EUR728 million to shareholders by issuing EUR1 billion new senior secured notes and using cash on the balance sheet. Despite the dividend recapitalization, we now anticipate leverage to be 6.0x in fiscal 2025, which is materially lower than the 8.7x we previously forecast under the proposed change of ownership transaction from October 2024. Therefore, we revised the outlook on Techem to stable from negative and affirmed our 'B+' issuer rating and 'B+' issue rating." Strong operating performance in the first half of 2025 underpins Techem's ongoing growth trajectory. During the first six months of fiscal 2025, company-reported revenues grew by 10.6% year over year mainly supported by its core business in Germany. This is on the back of higher volumes as the installed base of submetering devices continues to grow by 2.6% year over year, as well as price increases, newly priced components, and the continued rollout of multisensor devices. Company-reported EBITDA expanded by about EUR40 million due to strong revenue growth, improving operating leverage, and lower exceptional costs. S&P said, "In line with our existing expectations, we anticipate this trend to continue for the second half of fiscal 2025, leading to revenue growth of 10.7% year over year and S&P Global Ratings-adjusted EBITDA margin expansion to 47.7% compared to 46.6% in the first half of fiscal 2025. Thereafter, we forecast revenue growth between 6.5%-9.0% during fiscals 2026 and 2027 supported by further penetration of its existing customer base thanks to its digital capabilities and services that allow price and volume increases, such as monthly billing, ahead of the revised European Energy Directive by 2027, when monthly digital readings will become mandatory. In addition, the replacement cycle of smoke detectors in North Rhine-Westphalia--where Techem will install its new multisensor devices and develop digital solutions for energy efficiency in buildings--will also support the company's prospects, alongside international growth, an increasing share of new services such as EV charging station operations, and contributions from small bolt-on acquisitions. The S&P Global Ratings-adjusted EBITDA margin is expected to expand further to 48.5% in fiscal 2027 from the 47.7% forecast in fiscal 2025 thanks to solid top-line growth and improving operating leverage as the company benefits from its built-out IT platform that supports higher-margin sales of ancillary services, partially offset by exceptional costs of EUR35 million-EUR40 million per year." S&P said, "We expect credit metrics to strengthen over the next years thanks to ongoing good operating performance. Due to the dividend recapitalization, we expect leverage to increase to 6.0x in 2025 from 5.5x in fiscal 2024, with funds from operations (FFO) to debt at about 9%. Thereafter, we forecast leverage to gradually reduce close to 5.0x by fiscal 2027, with FFO to debt close to 11%. We forecast free operating cash flow (FOCF) to stay at EUR75 million-EUR90 million thanks to EBITDA growth despite anticipating higher capital expenditure (capex) close to EUR200 million in fiscal 2025 and EUR230 million-EUR250 million in fiscals 2026 and 2027 on the back of ongoing device replacement cycles and capex-heavy business line growth, such as in the Energy Efficiency Solutions (EES) division. We forecast FFO cash interest coverage to be about 3.0x over the next three years, while liquidity is anticipated to remain solid with no near-term maturities and a fully undrawn revolving credit facility (RCF) of EUR375 million. "The outlook revision to stable reflects our growth forecast of close to 11% in fiscal 2025 and 9% in fiscal 2026 with an adjusted EBITDA margin expansion above 48%, resulting in adjusted debt to EBITDA declining to 5.5x and FOCF of more than EUR70 million by fiscal 2026." S&P could lower the rating if Techem's operating performance is weaker than it expects, resulting in adjusted debt to EBITDA above 7.5x with no clear prospect of deleveraging or sustained negative FOCF. This could happen if the company: -- Incurs higher exceptional costs than expected, depressing adjusted EBITDA beyond S&P's expectations; or -- Experiences more competition and struggles to expand beyond its submetering stronghold, thereby reducing its EBITDA. S&P said, "In addition, we could lower the rating if the company adopts a more aggressive financial policy through shareholder returns or significant debt-funded acquisitions that slow down deleveraging to 7.5x. "We could take a positive rating action if Techem generates sufficient revenue growth such that adjusted debt to EBITDA decreases sustainably toward 5x and FFO to debt increases toward 12%. A positive rating action would hinge on shareholders' commitment to maintain leverage below these levels." ============= I R E L A N D ============= ADAGIO X: Fitch Assigns 'B-sf' Final Rating on Class F-RR Notes --------------------------------------------------------------- Fitch Ratings has assigned Adagio X EUR CLO DAC reset notes final ratings. Entity/Debt Rating Prior ----------- ------ ----- Adagio X EUR CLO DAC Class A-R Loan LT PIFsf Paid In Full AAAsf Class A-R Notes XS2708741850 LT PIFsf Paid In Full AAAsf Class A-RR XS3083226889 LT AAAsf New Rating Class B-1R XS2708742072 LT PIFsf Paid In Full AAsf Class B-2R XS2708742239 LT PIFsf Paid In Full AAsf Class B-RR XS3083227002 LT AAsf New Rating Class C-R XS2708742403 LT PIFsf Paid In Full Asf Class C-RR XS3083227424 LT Asf New Rating Class D-R XS2708742668 LT PIFsf Paid In Full BBB-sf Class D-RR XS3083227853 LT BBB-sf New Rating Class E-R XS2708742825 LT PIFsf Paid In Full BB-sf Class E-RR XS3083227937 LT BB-sf New Rating Class F-R XS2708743120 LT PIFsf Paid In Full B-sf Class F-RR XS3083228075 LT B-sf New Rating Transaction Summary Adagio X EUR CLO DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. At closing, the existing notes, except for the subordinated notes, will be refinanced. The transaction will have a target par amount of EUR330 million. The portfolio is actively managed by AXA Investment Managers Inc. The collateralised loan obligation will have a 4.6-year reinvestment period and an 8.5-year weighted average life test (WAL). KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-calculated weighted average rating factor of the identified portfolio is 24. 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-calculated weighted average recovery rate of the identified portfolio is 62.1%. Diversified Portfolio (Positive): The transaction will include four Fitch matrices. Two are effective at closing, corresponding to an 8.5-year WAL, and the other two are effective one year after closing, corresponding to a 7.5-year WAL and the target par condition. Each of these two WALs will be accompanied by two fixed-rate asset limits of 5% and 12.5%. All matrices will be based on a top-10 obligor concentration limit at 20%. The transaction will also include various other concentration limits, including a maximum of 40% to the three-largest Fitch-defined industries. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction will have a 4.6-year reinvestment period and include reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These conditions include passing the coverage tests and the Fitch 'CCC' bucket limitation test after reinvestment, and a WAL covenant that gradually steps down, before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during the stress period. 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-RR notes, and lead to a downgrade of one notch each for the class C-RR to E-RR notes, and to below 'B-sf' for the class F-RR notes. Downgrades, which are based on the identified portfolio, may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. The class B-RR to E-RR notes each have a rating cushion of two notches and the class F-RR notes have a cushion of one notch due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. 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 a downgrade of up to four notches each for the class A-RR to D-RR notes and to below 'B-sf' for the class E-RR and F-RR notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to an upgrade of up to three notches each for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than- expected losses for the remaining life of the transaction. 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 Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Most of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally 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 on for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Adagio X EUR CLO DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. ARES EUROPEAN XI: Fitch Affirms 'B+sf' Rating on Class F Notes -------------------------------------------------------------- Fitch Ratings has upgraded Ares European CLO XI DAC's class B-1-R, B-2-R and C-R notes and affirmed the rest. Entity/Debt Rating Prior ----------- ------ ----- Ares European CLO XI DAC A-1-R XS2333699267 LT AAAsf Affirmed AAAsf A-2-R XS2333699937 LT AAAsf Affirmed AAAsf B-1-R XS2333700610 LT AAAsf Upgrade AA+sf B-2-R XS2333701261 LT AAAsf Upgrade AA+sf C-R XS2333701931 LT AAsf Upgrade AA-sf D-R XS2333702582 LT BBB+sf Affirmed BBB+sf E XS1958267905 LT BB+sf Affirmed BB+sf F XS1958269273 LT B+sf Affirmed B+sf Transaction Summary Ares European CLO XI DAC is a cash flow CLO comprising mostly senior secured obligations. The transaction is outside its reinvestment period and the portfolio is actively managed by Ares European Loan Management LLP. KEY RATING DRIVERS Performance Exceeds Rating Case: The transaction is 1% below par (calculated as the current par difference below the original target par) but the losses are smaller than its rating case. Exposure to assets with a Fitch-derived rating of 'CCC+' and below is 5.7%, according to the June trustee report, compared with the 7.5% limit. There are about EUR2 million of defaulted assets in the portfolio. At the latest payment date in April 2025, the class A-1-R notes have paid down by around EUR51.2 million since the last review in September 2024. Increases in credit enhancement due to deleveraging and the transaction's better-than-expected performance since the last review support the rating actions. Large Cushion Supports Stable Outlooks: All notes have large default-rate buffers to support their ratings and should be capable of absorbing further defaults in the portfolio. The notes have sufficient credit protection to withstand potential deterioration in the credit quality of the portfolio at their ratings. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The weighted average rating factor (WARF) of the current portfolio is 26.9, as calculated by Fitch under its latest criteria. High Recovery Expectations: Senior secured obligations comprise 99.7% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the current portfolio is 61.5%. Diversified Portfolio: The portfolio is well diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 13.7%, and no obligor represents more than 1.8% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 29.4%, according to the trustee report. Fixed-rate assets reported by the trustee are at 5.8% of the portfolio balance, versus a limit of 7.5%. Transaction Outside Reinvestment Period: The reinvestment period ended in October 2023 but the manager can continue to reinvest unscheduled principal proceeds and sale proceeds from credit-improved or credit-impaired obligations, subject to compliance with the reinvestment criteria. Given the manager's ability to reinvest, Fitch's analysis is based on a stressed portfolio using the agency's collateral quality matrix specified in the transaction documentation. Since the recovery definition of this transaction is not in line with the current criteria and could result in an inflated WARR compared with the current criteria, a 1.5% haircut was applied across all Fitch test matrices. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades, which are based on the current portfolio, may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. 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 on for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Ares European CLO XI DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. CVC CORDATUS XXXV: S&P Assigns B-(sf) Rating on Class F Notes ------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to CVC Cordatus Loan Fund XXXV DAC's class A-1, A-2, B, C, D, E, and F notes. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which consists primarily of broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which 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 2,857.76 Default rate dispersion 461.92 Weighted-average life (years) 4.82 Obligor diversity measure 109.46 Industry diversity measure 22.58 Regional diversity measure 1.11 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.75 Actual target 'AAA' weighted-average recovery (%) 37.15 Actual target weighted-average spread (net of floors; %) 3.91 Actual target weighted-average coupon 4.73 Rating rationale Under the transaction documents, the rated notes pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semi-annual payments. The portfolio's reinvestment period will end approximately 4.66 years after closing. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted our credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR400 million target par amount, the actual weighted-average spread (3.91%), the actual weighted-average coupon (4.73%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all classes of notes (see "Related Criteria"). 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. "Until the end of the reinvestment period on Feb. 20, 2030, the collateral manager may substitute assets in the portfolio for so long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes. This test looks at the total amount of losses that the transaction can sustain as established by the initial cash flows for each rating, and it compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "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. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate with higher rating levels than those we have assigned. However, as the CLO will be in its reinvestment phase starting from closing, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes. The class A-1, A-2, and F notes can withstand stresses commensurate with the assigned ratings. "Taking the above factors into account and following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that the assigned ratings are commensurate with the available credit enhancement for all the rated classes of notes. "In addition to our standard analysis, to provide an indication of how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, 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 or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." The transaction securitizes a portfolio of primarily senior secured leveraged loans and bonds and is managed CVC Credit Partners Investment Management Ltd. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A-1 AAA (sf) 236.00 41.00 Three/six-month EURIBOR plus 1.33% A-2 AAA (sf) 10.00 38.50 Three/six-month EURIBOR plus 1.60% B AA (sf) 46.00 27.00 Three/six-month EURIBOR plus 1.75% C A (sf) 24.00 21.00 Three/six-month EURIBOR plus 2.15% D BBB- (sf) 28.00 14.00 Three/six-month EURIBOR plus 3.00% E BB- (sf) 19.00 9.25 Three/six-month EURIBOR plus 5.50% F B- (sf) 11.00 6.50 Three/six-month EURIBOR plus 8.26% Sub notes NR 29.90 N/A N/A *The ratings assigned to the class A-1, A-2, 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. TULLY PARK: Fitch Assigns 'B-sf' Final Rating on Class F Notes -------------------------------------------------------------- Fitch Ratings has assigned Tully Park CLO DAC final ratings. Entity/Debt Rating Prior ----------- ------ ----- Tully Park CLO DAC A XS3046362037 LT AAAsf New Rating AAA(EXP)sf B XS3046362201 LT AAsf New Rating AA(EXP)sf C XS3046362540 LT Asf New Rating A(EXP)sf D XS3046362896 LT BBB-sf New Rating BBB-(EXP)sf E XS3046363191 LT BB-sf New Rating BB-(EXP)sf F XS3046363431 LT B-sf New Rating B-(EXP)sf Subordinated XS3046363787 LT NRsf New Rating NR(EXP)sf Transaction Summary Tully Park CLO DAC is a securitisation of mainly senior secured obligations (at least 96%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. The transaction has a target par of EUR400 million. The portfolio is actively managed by Blackstone Ireland Limited. The collateralised loan obligation (CLO) has a reinvestment period of about 4.6 years and a 7.5-year weighted average life test (WAL), which can be extended by one year, about 12 months after closing, subject to conditions. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/ 'B-'. The Fitch weighted average rating factor (WARF) of the identified portfolio is 25.2. High Recovery Expectations (Positive): At least 96% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate of the identified portfolio is 62.5%. Diversified Portfolio (Positive): The transaction includes various concentration limits, including a maximum exposure to the three largest Fitch-defined industries in the portfolio at 40%, a top 10 obligor concentration limit at 20%, and a maximum fixed-rate asset limits of 12.5% These covenants ensure the asset portfolio will not be exposed to excessive concentration. The transaction has four matrices. Two are effective at closing and two are effective six months after closing, all with fixed-rate limits of 5% and 12.5%, provided that the portfolio balance is above target par. All four matrices are based on a top 10 obligor concentration limit of 20%. The closing matrices correspond to a 7.5-year WAL test while the forward matrices correspond to a seven-year WAL test WAL Step-Up Feature (Neutral): The transaction can extend the WAL by one year on the step-up date, which is one year after closing. The WAL extension is subject to conditions, including passing the collateral quality and coverage tests and the adjusted collateral principal amount being at least equal to the reinvestment target par balance. Portfolio Management (Neutral): The transaction has a 4.6-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL used for the transaction's matrix and the Fitch-stressed portfolio analysis is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing both the coverage tests and the Fitch 'CCC' bucket limitation test post reinvestment and a WAL covenant that progressively steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A notes and would lead to downgrades of one notch each for the class B to E notes. Downgrades, which are based on the identified portfolio, may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. the class B, C, D, E and F notes each display a rating cushion of two notches due to the better metrics and shorter WAL of the identified portfolio than the Fitch-stressed portfolio. 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 a downgrade of up to four notches each for the rated 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 an upgrade of up to three notches each for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-tha-n expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period, may result from a stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Tully Park CLO DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. ========= I T A L Y ========= ALMAVIVA SPA: S&P Downgrades ICR to 'BB-', Outlook Stable --------------------------------------------------------- S&P Global Ratings lowered its ratings on Almaviva SpA and its debt to 'BB-' from 'BB'. At the same time, S&P assigned its 'BB-' issue and '3' recovery ratings to the EUR300 million TAP issuance on the senior secured notes, which would be used to fund the pending Tivit acquisition and is conditional upon the transaction's completion. The stable outlook reflects S&P's expectation of 8%-9% revenue growth and about 100 basis points (bps) EBITDA margin expansion in 2025, translating into deleveraging to 3.5x, and reflects our anticipation that FOCF will turn positive on normalized supplier payables following key contract changes in 2024. Almaviva S.p.A. suffered a sharp and unexpected leverage spike in 2024 on weaker operating performance, and S&P anticipates only gradual credit metrics improvement in 2025 on margin expansion and working capital normalization, with free operating cash flow (FOCF) still below adequate levels for the 'BB' rating through 2026. Almaviva's adjusted leverage increased to 3.7x in 2024, pro forma the acquisition of Brazil-based Magna and U.S.-based Iteris, from 1.8x in 2024, and S&P expects it to moderately decrease to 3.5x in 2025. The spike in leverage is explained by multiple factors that have weighed on the company's margin and increased adjusted debt: -- Almaviva spent EUR19 million in exceptional costs in 2024 to reorganize its products and services perimeter, layoff or retire employees earlier than anticipated, and optimize certain sites. -- Almaviva is shifting its Almawave subsidiary strategy to proprietary technologies, from third-party solutions, which together with developments on other proprietary platforms, led to a EUR15 million increase in capitalized development costs in 2024, not offset by additional revenue, while its multilingual large language model, Velvet, is being built. -- The U.S. market underperformed, mainly due to delayed transport projects resulting from the Californian wildfires that occurred in November 2024, and S&P expects delayed projects with public administration following cost-reduction programs implemented in 2025 after review by the U.S. Department of Government Efficiency. -- Significant working capital outflows in 2024 led to weaker cash on the balance sheet, therefore not deducted from S&P's adjusted debt metric. Almaviva has renegotiated payment terms with certain key suppliers, including cloud-infrastructure providers, trading shorter payment terms against better contract terms. This, alongside increased receivables linked with revenue growth and perimeter changes led toEUR143 million working capital outflow in 2024. -- Almaviva's recent debt-financed acquisition of Magna and Iteris, and the proposed acquisition of Tivit, have contributed to the increase in leverage. S&P said, "We expect Almaviva's leverage to sharply reduce to 2.7x in 2026, from 3.5x in 2025 on the back of 8%-9% organic revenue growth, modest margin expansion across all verticals, broadly stable capitalized development costs, and conservatively assumed limited synergies from recent acquisitions. We anticipate that FOCF will turn positive in 2025 and increase to 12% of debt in 2026 because suppliers' contract renegotiations had a significant impact in 2024. Contracts will then normalize and we do not expect further renegotiations in 2025-2026. That said, FOCF will remain below our 15% requirement for a 'BB' rating." The proposed acquisition of Tivit will lead to minimal releveraging of 0.2x and improves Almaviva's market position in Brazil and overall diversification, but also features execution and integration risks. Almaviva will become the second player in Brazil after Accenture and will gain exposure to fast-growing markets in Latin America, while its overall revenue base will become more diversified in terms of geographies, verticals and clients. That said, Almaviva has acquired two other significant businesses in 2024, Magna, based in Brazil, and Iteris, based in the U.S., and we believe multiplying relatively material acquisitions in a short timeframe increases execution and integration risks. S&P said, "The stable outlook reflects our expectation of 8%-9% revenue growth and about 100 bps EBITDA margin expansion in 2025, translating into deleveraging to 3.5x, and reflects our anticipation that FOCF will turn positive on normalization of supplier payables following key contract changes in 2024. "We see a downgrade as unlikely over the next 12 months, given Almaviva's financial policy and commitment to deleveraging. However, we could lower the rating on Almaviva if its adjusted debt to EBITDA increased to above 4x or if working capital changes became persistently negative leading to FOCF to debt of below 10%. This could happen due to a decline in competitiveness, integration challenges, and adverse foreign exchange impacts. "We could raise our rating if adjusted debt to EBITDA increases to above 3x and adjusted FOCF to debt improves sustainably to 15% or above. This could happen if continued organic profitability improvements are coupled with higher cost synergies than we currently expect, without significant spending in integration costs to offset these. An upgrade is also dependent on Almaviva adhering to a financial policy in line with such credit metrics." =================== K A Z A K H S T A N =================== OIL INSURANCE: S&P Upgrades ICR to 'BB-' on Stable Performance -------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit and insurer financial strength ratings on Kazakhstan-based Oil Insurance Company JSC to 'BB-' from 'B+'. The outlook is stable. At the same time, S&P raised its Kazakhstan national scale rating on the company to 'kzA-' from 'kzBBB+'. S&P said, "We expect Oil Insurance Company will continue its steady performance seen over 2024. Its net combined ratio under International Financial Reporting Standard-17 slightly improved to 83.2% in 2024 from 86.4% in 2023, and the company continued demonstrating a solid investment yield of over 10%, something we expect to continue. As of year-end 2024, Oil Insurance Company maintained solid capital buffers redundant at the 99.8% confidence level under our model. While the regulatory solvency margin dropped below 1.5x in early 2025, we understand it has been on its track to recover, reaching 1.4x by June 1, 2025. "We believe that Oil Insurance Company will maintain sufficient capital buffers over 2025-2027. Capital adequacy is projected to remain at the 99.5% confidence level. This is despite our projections of some modest deterioration of underwriting performance that we incorporate in our projections (85-86% for 2025-2027 compared with 83% in 2024) owing to weaker performance of obligatory motor third-party liability insurance in Kazakhstan as a result of the existing trend reflecting tariff increases lagging the cost of spare parts. These projections are contingent on dividend payouts but, given Oil Insurance Company's growth projections, we expect it to retain more than 55% of its net profits, given the need to adhere to its solvency target of 1.5x. "We expect Oil Insurance Company to maintain the high quality of its investment portfolio. Bonds rated 'BBB-' and above represented about 80% of the portfolio as of May 1, 2025, and we don't expect this to change. We envisage a strong supply of government-related entity issuance in Kazakhstan over the next few years while the decrease in rates--and consequently the incentive to seek speculative-grade bonds--will be modest, considering revised mid-term inflation forecasts. "The stable outlook reflects our expectation that Oil Insurance Co. will maintain a sufficient capital buffer above the 99.5% benchmark in our model while maintaining its market share and demonstrating profitable operating performance." S&P can take a negative rating action on Oil Insurance Co over the next 12 months if: -- Its capital adequacy deteriorates for an extended period below the 99.5% benchmark, which could occur, for example, as a result of aggressive growth, high underwriting or investment losses, or lower-than-expected retained earnings; or -- Oil Insurance Co's competitive position weakens, for example, if its combined ratio sustainably exceeds 100% due to prolonged deterioration of operating performance, or if premium volumes materially decline, signifying loss of market share. S&P said, "We are unlikely to take a positive rating action in the next 12 months. This is because, even if we were to see stronger capital buffers at Oil Insurance Co, its capital is unlikely to exceed US$25 million, a level we would typically associate with stronger capital assessments." =================== L U X E M B O U R G =================== MOBILUX GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Mobilux Group SCA's (Mobilux) Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also affirmed Mobilux Finance S.A.S.'s EUR750 million senior secured notes at 'BB-' with a Recovery Rating of 'RR3'. The ratings reflect Mobilux's enlarged scale following the combination of BUT and Conforama, a strengthened market position in France, a resilient operating model and potential for continued cash flow generation, enhanced by integration synergies. The rating assumes leverage for the new combined entity at just under 4.0x by FY25 (year-end June), providing adequate headroom in the face of persistent market uncertainty and underpinning the Stable Outlook. Key Rating Drivers Resilient Performance in Difficult Market: Mobilux's business model has proven resilient despite the continuing decline of the French furniture market since mid-2023. The group outperformed Fitch's FY24 EBITDA expectations by 13%, despite a 5% like-for-like revenue decline exceeding its anticipated 3% drop. Fitch anticipates a 5% EBITDA contraction and modest margin erosion in FY25 due to lower sales volumes. In FY25, Fitch expects profitability to decline to 6.2% due to ongoing market weakness, although realised synergies and efficiency on procurement will partly offset these pressures. Fitch anticipates Mobilux will continue to manage its costs efficiently, benefiting from lower purchasing costs and synergies from the Conforama integration, which should help limit margin erosion. Prospects for a decisive recovery of demand are uncertain, but Fitch believes these benefits could drive a recovery of profit once the market starts to stabilise, possibly from 2026. Adequate Financial Leverage: Fitch projects EBITDAR adjusted gross leverage at 3.9x for FY25. This provides comfortable headroom against its 4.5x rating threshold amid weak consumer sentiment and market uncertainties. The metric is slightly higher than its estimated pro forma leverage of 3.8x for FY24, which Fitch calculates including Conforama's EBITDA (mostly excluded from the 4.9x leverage calculated with the company's reported data). Fitch expects gross leverage to fall towards 3.5x by FY28, driven by synergies and market recovery. Fitch now reflects Mobilux's flexible lease terms and IFRS lease liabilities in its leverage calculations, in line with its new criteria on leases. This reduces its calculated gross leverage by 1.7x, compared with its earlier calculation where Fitch capitalised its lease proxy using an 8x multiple. Fitch also includes in its debt calculation the EUR91 million preferred equity certificates issued in June 2024, given their maturity is ahead of the company's senior secured notes. Conforama Integration Boosts Market Share: The combination of BUT with Conforama has doubled the size of Mobilux, making it the second-largest furniture retailer in France, with a market share close to that of the market leader. The combined entity had pro forma sales of EUR3.5 billion in 2024, compared with BUT's EUR2.1 billion alone. Management will keep the two brands commercially separate but is realising cost synergies in support functions. Stronger Business Profile: The combined group has two banners, both benefitting from strong brand awareness across France, and has achieved an even more extensive network of stores in the country and cost synergies. Mobilux offers a wide range of products, from furniture and appliances to home decoration, with the latter making a smaller contribution to group sales. The broad offering meets the needs of diverse clients at affordable prices. The company's extensive discount policy, especially at Conforama, enhances its appeal to shoppers. These strengths are important in a shrinking market hit by discounting and should benefit Mobilux as some competitors fail and risk exiting the market. Lower Combined Margin: Fitch estimates a combined EBITDA margin at 6.4% in FY24, following the merger, which is lower than BUT's 8.9% in FY23, due to Conforama's heavier cost structure, particularly in logistics, and its lower-margin product mix. Cost Management to Improve Margins: The combined entity has identified certain measures to improve profitability at Conforama to match BUT's by optimising costs through logistic and supply-chain efficiencies, harmonising IT and reducing duplicate functions. Both entities are part of the GIGA France purchasing group and benefit from procurement activities in Asia by BSL, Mobilux's purchasing and supply-chain platform for furniture, which helps optimise procurement and secure better purchasing conditions. These measures, alongside a stabilising furniture market, will improve the combined EBITDA margin to 6.7%-7.3% in FY26-FY28. Positive FCF Despite Higher Capex: Fitch expects the combined free cash flow (FCF) margin will remain positive in the low single digits, supporting Mobilux's rating, despite its higher capex intensity (3% of revenue versus BUT's 2%), to compensate for under-investment in Conforama. The positive FCF will add to an already large cash balance. Peer Analysis Mobilux's closest peer is Maxeda DIY Holding B.V. (B-/Negative), a Dutch retailer. Both companies have similar market-leading positions in concentrated geographies and exposure to home-improvement related spending, which had peaked after the pandemic, before it started to decline in an unfavourable macroeconomic environment. Both companies generate broadly similar EBITDAR margins, but Mobilux has larger scale, particularly after its merger with Conforama, and healthier FCF margins. Maxeda's higher EBITDAR leverage with limited deleveraging capacity and tighter liquidity are reflected in its two-notch rating differential with Mobilux. Mobilux has higher leverage than larger peers, such as European DIY retailer Kingfisher plc (BBB/Stable). Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Net revenue down 2% and, on a like-for-like basis, 5% in FY25, followed by around 1% revenue decline in FY26 as the furniture market stabilises - Sales to grow in low single digits for FY27-FY29 - Fitch-adjusted EBITDA margin at 6.2% in FY25, before improving to 7% by FY27 - Working-capital normalisation in FY25-FY26, followed by broadly neutral to slightly negative working capital to FY29 - Capex at around 3% of revenue in FY25-FY29 - No dividends over the next four years Recovery Analysis Fitch assumed Mobilux would be considered a going concern in bankruptcy and that it would be reorganised rather than liquidated. Fitch has assumed a 10% administrative claim in the recovery analysis. Its bespoke going-concern recovery analysis estimated post-restructuring EBITDA available to creditors at the combined entity, after corrective measures, of about EUR145 million. This is EUR5 million higher than in its previous analysis, due to the growing scale of operations of the purchasing subsidiary BSL, which now also serves additional third-party clients. Fitch applied a 5.5x multiple to the going-concern EBITDA to derive the enterprise valuation, compared with the 5.0x used for BUT. The higher multiple reflects the larger size and better market position of the combined entity. Based on the debt waterfall, Fitch treated other debt as priority (EUR1 million) and its revolving credit facility of EUR210 million as super senior to its senior secured debt. After deducting 10% for administrative claims, its analysis generated a ranked recovery for the senior secured notes in the 'RR3' band, indicating a 'BB-' instrument rating, one notch above the IDR. The senior secured notes rank equally among themselves. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Inability to maintain EBITDAR gross leverage below 4.5x on a sustained basis - Sharp deterioration in revenue and profitability, reflecting, for example, an increasingly competitive operating environment that translates into an EBITDAR margin consistently below 10% - EBITDAR fixed charge coverage below 2.0x on a sustained basis - FCF margin trending towards neutral - Tightening liquidity due to material operational underperformance or significant distributions to shareholders increasing leverage Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Wider geographic diversification leading to higher EBITDAR of at least EUR500 million - Commitment to a financial policy that is conducive to EBITDAR gross leverage remaining below 3.0x - FCF margin above 3% on a sustained basis - EBITDAR margin improving towards 13.5% - EBITDAR fixed charge coverage consistently above 2.5x Liquidity and Debt Structure Mobilux had EUR240 million (excluding Fitch-restricted cash of EUR50 million) cash on its balance sheet at end-March 2025. This, together with its fully undrawn EUR210 million revolving credit facility, is sufficient to cover short-term liquidity needs. Combined with expected low single-digit positive FCF margins, overall liquidity is comfortable. Mobilux has no material debt maturities until 2028, when its euro-denominated senior secured notes come due. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Mobilux Finance S.A.S. senior secured LT BB- Affirmed RR3 BB- Mobilux Group SCA LT IDR B+ Affirmed B+ =========== T U R K E Y =========== TURKIYE SINAI: Fitch Affirms B+/BB- LongTerm IDRs, Outlook Positive ------------------------------------------------------------------- Fitch Ratings has affirmed Turkiye Sinai Kalkinma Bankasi A.S.'s (TSKB) Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at 'B+' and Long-Term Local-Currency (LTLC) IDR at 'BB-'. The Outlook on the LTFC IDR is Positive, and that on the LTLC IDR is Stable. Fitch has also affirmed the bank's Viability Rating (VR) at 'b+'. Key Rating Drivers VR Drives LTFC IDR: TSKB's LTFC IDR is driven by its 'b+' VR and underpinned by support. The VR reflects the bank's niche policy role and development focus, fairly stable earnings, and adequate capitalisation and FC liquidity. The VR also considers the bank's small market share, exposure to the Turkish operating environment and its highly dollarised balance sheet. The Positive Outlook on the LTFC IDR reflects that on the operating environment. Government Support Drives LTLC IDR: TSKB's 'b+' Government Support Rating (GSR) reflects its policy role, strategic importance to the state, limited unguaranteed FC wholesale funding due within 12 months, development lending expertise and the significant share of Turkish Treasury-guaranteed development financial institution (DFI) funding. The GSR also considers the sovereign's still moderate, although improved, reserves position, and TSKB's private ownership. TSKB's LTLC IDR is driven by government support and one notch above its LTFC IDR, reflecting the sovereign's stronger ability to provide support in LC. The Stable Outlook reflects that on the sovereign LTLC IDR. Improving but Challenging Operating Environment: The normalisation of monetary policy has reduced near-term macro-financial stability risks and external financing pressures. However, recent political developments have increased financial market volatility, which, if sustained, could disrupt the country's disinflation and economic rebalancing processes. Banks remain exposed to high inflation, potential further Turkish lira depreciation and slowing economic growth. Privately Owned Policy Bank: TSKB has a unique role as Turkiye's sole privately owned development and investment bank. It is 51.4% owned by Turkiye Is Bankasi Group (Isbank; BB-/Stable) and has expertise in sustainable banking and development lending, with a focus on renewable energy. Project finance and corporate loans, policy driven and disbursed on a commercial basis, comprise most lending and are almost entirely in FC. Asset-Quality Risks: Non-performing loans (NPL) declined to 1.7% of gross loans at end-1Q25 (end-2024: 2.2%), reflecting collections and stable loan performance, but also nominal growth of 15% (sector-average: 10%). Stage 2 loans comprised 8% of gross loans (36% covered by reserves; 50% restructured). Lending largely comprises lumpy, slowly amortising project finance. Risks stem from concentrations in single-name borrowers, FC lending (88% of gross loans) and energy exposures (but largely covered by a feed-in tariff set in US dollars). Fitch expects the impaired loans ratio to rise to about 2.5% by end-2025, on slower GDP growth. Above-Sector-Average Profitability: TSKB's operating profit declined to a still high 7.3% of risk-weighted assets (RWAs) in 1Q25 (2024: 8.2%), on provision reversals (equal to an annualised 13% of pre-impairment operating profit) and lower swap costs (reported under trading losses), which offset margin contraction amid declining rates and CPI linker gains. Performance is underpinned by medium- to long-term concessional and thematic DFI funding and exposure to more stable FC interest rates than lira rates, supporting TSKB's solid net interest margin of 6.4% at end-1Q25 (sector average: 5.6%). Fitch expects TSKB's operating profit to be around 5% of RWAs in 2025 and 4% in 2026. Moderate Buffers: TSKB's common equity Tier 1 (CET1) ratio declined to 15.9% (12.7% net of forbearance) at end-1Q25 from 19.1% at end-2024, reflecting the tightening of regulatory forbearance on FC RWAs and a one-off operational RWA adjustment. Its total capital ratio of 22.2% at end-1Q25 is supported by USD300 million of additional Tier 1 (AT1) notes (5% of RWAs). Capitalisation remains sensitive to lira depreciation, which inflates FC RWAs, and asset quality. Fitch expects TSKB to maintain its moderate capital buffers over the next two years and forecast the CET1 ratio to be about 17.9% (including forbearance) by end-2025, supported by internal capital generation. Fully Wholesale Funded: TSKB is primarily funded in FC by DFIs, largely under Treasury guarantee, which accounted for 47% of non-equity funding at end-1Q25. Fitch views FC liquidity as only adequate given its reliance on FC loan repayments to cover short-term FC debt. Undrawn DFI funding is an additional buffer but consists of tied facilities. FC liquid assets comprise cash, placements at foreign banks, unpledged government securities and FX swaps, largely with foreign counterparties. Shareholder Support: TSKB's Shareholder Support Rating (SSR) of 'b+' reflects its strategic importance to and role within the Isbank Group, reputational risks for Isbank, and the bank's small size relative to its parent's. It also considers TSKB's significant operational independence and Isbank's only 51.4% stake in the bank. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the LTFC IDR would require a simultaneous downgrade of the VR, GSR and SSR. TSKB's LTLC IDR is primarily sensitive to a downgrade of the sovereign's LTLC IDR, and also to a change in the ability or propensity of the authorities to provide support in LC. TSKB's VR is primarily sensitive to a weakening of the Turkish operating environment. TSKB's VR could be downgraded due to a material erosion of the bank's capital and FC liquidity buffers, most likely from a weakening in the bank's financial performance and asset quality if not offset by government or shareholder support. TSKB's GSR is sensitive to a sovereign downgrade and to a weakening in the ability and propensity of the authorities to provide support, but this is not its base case. TSKB's SSR is sensitive to a change in Isbank's LTFC IDR, Fitch's view of the parent's ability and propensity to provide support, and of the strategic importance of TSKB to its parent. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A positive change in the sovereign's IDRs would likely lead to an upgrade of the GSR and similar action on the bank's IDRs. TSKB's VR upside is limited by exposure to Turkish operating environment risks. An upgrade would require an improved operating environment score, driven by lower market or exchange-rate volatility, sustained lower inflation and better investor sentiment, in combination with a healthy financial profile. TSKB's GSR could also be upgraded if Fitch considers the government's ability and propensity to support the bank in FC to have strengthened. TSKB's SSR is sensitive to a positive change in Isbank's ability to provide support, although this is not its base case given the Stable Outlook on the parent bank's ratings, and also in its propensity to provide support. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS TSKB's senior unsecured debt ratings are aligned with its IDRs. The Recovery Rating of the notes is 'RR4', reflecting average recovery prospects in a default. TSKB's AT1 capital notes' rating is three notches below its VR anchor rating. Fitch has only notched down the debt rating three times (twice for loss severity and only once for non-performance risk), instead of four, due to rating compression, as TSKB's VR is below the 'BB-' anchor rating threshold. The bank's 'AA(tur)' National Long-Term Rating is driven by government support and is in line with state-owned commercial bank peers'. TSKB's 'B' Short-Term IDRs are the only possible option mapping to Long-Term IDRs in the 'B' and 'BB' rating categories. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES TSKB's senior unsecured debt ratings are primarily sensitive to changes in its IDRs. The AT1 capital notes' rating is sensitive to changes in TSKB's VR. It is also sensitive to an unfavourable revision in Fitch's assessment of incremental non-performance risk. The National Long-Term Rating is sensitive to changes in TSKB's LTLC IDR and its creditworthiness relative to other Turkish issuers'. The Short-Term IDRs are sensitive to a multi-notch downgrade of the bank's respective Long-Term IDRs. VR ADJUSTMENTS The operating environment score of 'b+' for Turkish banks is lower than the category-implied score of 'bbb', due to the following adjustment reason: macroeconomic stability (negative). The adjustment reflects heightened market volatility, high dollarisation and the high risk of FX movements in Turkiye. The earnings and profitability score of 'b+' is lower than the category-implied score of 'bb', due to the following adjustment reason: revenue diversification (negative). Public Ratings with Credit Linkage to other ratings TSKB's LTLC IDR is linked to the Turkish sovereign's, as it is sensitive to its assessment of sovereign support. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Turkiye Sinai Kalkinma Bankasi A.S. LT IDR B+ Affirmed B+ ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA(tur) Affirmed AA(tur) Viability b+ Affirmed b+ Government Support b+ Affirmed b+ Shareholder Support b+ Affirmed b+ senior unsecured LT B+ Affirmed RR4 B+ subordinated LT CCC+ Affirmed CCC+ senior unsecured ST B Affirmed B =========================== U N I T E D K I N G D O M =========================== BCP V MODULAR: Moody's Affirms 'B2' CFR, Outlook Remains Negative ----------------------------------------------------------------- Moody's Ratings has affirmed the B2 corporate family rating of BCP V Modular Services Holdings III Limited (Modular). In addition, Moody's affirmed Modulaire Group Holdings Limited's (Modulaire) B2 backed senior secured bank credit facility ratings of its EUR1.8 billion Term Loan B and its EUR350 million backed senior secured revolving credit facility (RCF). Moody's also affirmed the B2 backed senior secured debt ratings of the EUR750 million and GBP250 million senior secured notes issued by BCP V Modular Services Finance II PLC (BCP V II) and the Caa1 backed senior unsecured debt rating of the EUR435 million senior unsecured notes issued by BCP V Modular Services Finance PLC (BCP V), which are subsidiaries of Modular. In the same rating action, Moody's assigned a B2 backed senior secured bank credit facility rating to Modulaire's new Term Loan B. The outlook on the issuers remains negative. This rating action is driven by Modular's planned EUR1.9 billion senior secured debt issuance, the proceeds from which will be used to repay its existing EUR1.8 billion Term Loan B. RATINGS RATIONALE The affirmation of Modular's B2 CFR reflects the expected improvement in the company's debt maturity profile and liquidity following its proposed refinancing of the majority of the group's 2028 debt obligations. At the same time, the CFR continues to remain constrained by Modular's high leverage and weak interest coverage, which has not improved since its debt-funded acquisition of Mobile Mini UK in Q1 2023. The expected deleveraging following the transaction did not materialize due to lower than expected EBITDA growth, primarily driven by the prolonged weak demand in the construction sector. As of the end of March 2025, Modular's gross Debt/EBITDA leverage exceeded 7x (on the trailing twelve-month basis), while its interest coverage was below 2x in the same period. Given a high degree of operating leverage in its business, Modular's profitability should materially improve and its leverage decline with increased fleet utilization. Should a rebound of construction activity be delayed, Moody's expects the company will increase utilization of its fleet in other sectors. That Modular has remained cash flow-positive despite the lengthy slowdown in construction activity, demonstrates its business model resilience. Modular's CFR of B2 continues to incorporate a one-notch positive adjustment for business diversification, concentration and franchise positioning. The adjustment reflects the strength of Modular's franchise, including its diversification across sectors and geographies and its leading position as a lessor of modular and storage units in most European and Australian markets. The CFR also reflects Moody's views that Modular has low residual-value risk related to its modular and storage units, as the company is able to redeploy most of its units with minimal capital expenditures, thus extending their useful lives. Modulaire's backed Term Loan B and backed revolving credit facility, as well as BCP V II's backed senior secured notes, are pari-passu and all rated B2, reflecting their asset pledges and structural priority over unsecured debt. Following the planned refinancing, Moody's expects the relative ranking of the rated obligations to remain the same. BCP V's Caa1 backed senior unsecured notes rating reflect their subordinated position within Modular's liability structure and higher expected loss. OUTLOOK The negative outlook reflects the lack of improvement in Modular's cash flow and leverage due to a continued contraction in demand for its modular space and storage units in the construction sector and other key markets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating pressure is unlikely given the negative outlook. Moody's could change the outlook to stable if Moody's conclude that Modular has a path to reduce its leverage to at least 6.5x in the next 12 months, and if the company materially improves its debt servicing capacity. Moody's could downgrade Modular's CFR if Moody's conclude that the company is unable to improve its leverage and debt servicing capacity on a sustained basis, which would be indicative of long-term structural challenges related to overcapacity and reduced utilization rates in its key markets. The group's debt ratings will likely be downgraded together with the CFR. Moody's could also downgrade the debt ratings if there are significant changes in the company's liability structure, which would result in a decrease in expected recoveries for secured and senior unsecured creditors in a default scenario. LIST OF AFFECTED RATINGS Issuer: BCP V Modular Services Holdings III Limited Affirmations: LT Corporate Family Rating, Affirmed B2 Outlook Actions: Outlook, Remains Negative Issuer: Modulaire Group Holdings Limited Assignments: Backed Senior Secured Bank Credit Facility (Foreign Currency), Assigned B2 Affirmations: Backed Senior Secured Bank Credit Facility (Foreign Currency), Affirmed B2 Outlook Actions: Outlook, Remains Negative Issuer: BCP V Modular Services Finance II PLC Affirmations: Backed Senior Secured (Foreign Currency), Affirmed B2 Backed Senior Secured (Local Currency), Affirmed B2 Outlook Actions: Outlook, Remains Negative Issuer: BCP V Modular Services Finance PLC Affirmations: Backed Senior Unsecured (Foreign Currency), Affirmed Caa1 Outlook Actions: Outlook, Remains Negative PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Finance Companies published in July 2024. FINSBURY SQUARE 2025-1: S&P Assigns Prelim. 'B-' Rating on F Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary credit ratings to Finsbury Square 2025-1 PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd notes. At closing, Finsbury Square 2025-1 will also issue unrated class G-Dfrd, Z, and S notes and residual certificates. S&P's preliminary ratings address timely payment of interest and ultimate payment of principal on the class A notes, and they reflect ultimate payment of interest and principal on all other rated notes. Once the class B-Dfrd to F-Dfrd notes become the most senior, interest must be paid on a timely basis. The GBP597.4 million preliminary pool consists of owner-occupied (72.57%) and buy-to-let (27.43%) mortgage loans secured against properties in the U.K. Kensington Mortgages Company Ltd. (KMC), a specialist lender, originated the loans in the pool. It has a significant track record in both owner-occupied and buy-to-let origination and servicing. Servicing for this transaction will be performed in house. Most of the pool was originated between 2022 and 2025 (76.4%), with the remainder dating back to 2011, showing a higher concentration in more recent vintages. The transaction features a nonamortizing general reserve fund that will provide credit enhancement and liquidity for the class A to F-Dfrd notes. A further liquidity reserve, available for the class A and B-Dfrd notes, will be funded if the general reserve fund drops below 0.5% of the class A to G-Dfrd notes' outstanding balance. The transaction's high level of excess spread and sequential payment mechanism also provide credit enhancement. The pool has been negatively selected from the originator's broader book, with a primary focus on loans in arrears. 18.7% of the pool is in arrears, with 11.1% more than 90 days in arrears. Preliminary ratings Class Prelim. Rating Prelim. class size (%) A AAA (sf) 83.00 B-Dfrd* AA (sf) 6.00 C-Dfrd* A (sf) 4.00 D-Dfrd* BBB- (sf) 2.75 E-Dfrd* BB- (sf) 1.75 F-Dfrd* B- (sf) 1.50 G-Drfd* NR 1.00 Z NR 1.00 S NR N/A§ Residual Certs NR N/A *S&P's preliminary rating on this class considers the potential deferral of interest payments. §Amount equal to mortgage loans' current balance at the beginning of the payment period. NR--Not rated. N/A--Not applicable. GC NO. 24 LIMITED: KR8 Advisory Named as Administrators ------------------------------------------------------- GC NO. 24 Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number: CR-2025-LDS-000621, and James Saunders and Michael Lennon of KR8 Advisory Limited were appointed as administrators on June 20, 2025. GC NO.24 Limited engaged in the buying and selling of real estate. Its registered office is c/o St Andrew's House, 20 St Andrew Street, City of London, London, EC4A 3AG Its principal trading address is at 1 Newhall Street, Birmingham, B3 3NH The joint administrators can be reached at: James Saunders Michael Lennon c/o KR8 Advisory Limited 7th Floor, 20 St Andrew Street London, EC4A 3AG For further details, please contact: Ion Giamalakis-Short Email: ion.gs@kr8.co.uk Tel: 0161 504 9799 PLM GLOBAL (HOLDINGS): RSM UK Named as Administrators ----------------------------------------------------- PLM Global (Holdings) Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number: CR-2025-000623, and Gordon Thomson and Damian Webb of RSM UK Restructuring Advisory LLP were appointed as administrators on June 20, 2025. PLM Global (Holdings) is a holding company. Its registered office is C/O Dains Accountants, Cubo Standard Court, Park Row, Nottingham NG1 6GN (previously: 3rd Floor, Butt Dyke House, 33 Park Row, Nottingham, NG1 6EE (until April 7, 2025)) Its principal trading address is at 8 Morris Court, Private Road No 3, Colwick Industrial Estate, Nottingham, NG4 2JN The joint administrators can be reached at: Gordon Thomson Damian Webb RSM UK Restructuring Advisory LLP 25 Farringdon Street London EC4A 4AB Correspondence address & contact details of case manager: Samir Akram RSM UK Restructuring Advisory LLP 25 Farringdon Street London EC4A 4AB Tel: 020 3201 8000 SIG PLC: Egan-Jones Retains B+ Senior Unsecured Ratings ------------------------------------------------------- Egan-Jones Ratings Company on June 10, 2025, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by SIG plc. EJR also withdrew the rating on commercial paper issued by the Company. Headquartered in Sheffield, United Kingdom, SIG plc distributes specialty building products. SPARKLE BERRY: FRP Advisory Named as Administrators --------------------------------------------------- Sparkle Berry Homes Ltd was placed into administration proceedings in the Court of Session, Edinburgh, No P595 of 2025, and Michelle Elliott and Callum Angus Carmichael of FRP Advisory Trading Limited were appointed as administrators on June 16, 2025. Sparkle Berry specialized construction of domestic buildings. Its registered office is at 61 Burte Court, Bellshill, ML4 3GB 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: +44 (0)330 055 5455 cp.glasgow@frpadvisory.com SWALLOWTAIL PRINT: McTear Williams Named as Administrators ---------------------------------------------------------- Swallowtail Print Limited was placed into administration proceedings in the High Court of Justice, Court Number: CR-2025-003976, and Jo Watts and Andrew McTear of McTear Williams & Wood Limited were appointed as administrators on June 24, 2024. Swallowtail Print is a manufacturer of paper stationery; and a manufacturer of other articles of paper and paperboard; and engaged in printing. Its registered office and principal trading address is at Unit 3 Drayton Industrial Estate, Taverham Road, Drayton, Norwich, NR8 6RL. The joint administrators can be reached at: Jo Watts Andrew McTear McTear Williams & Wood Limited Prospect House, Rouen Road Norwich, NR1 1RE Enquiries should be sent to: McTear Williams & Wood Limited Prospect House, Rouen Road Norwich, NR1 1RE Email: jennyrandell@mw-w.com Tel: 01603 877540 Fax: 01603 877549 ********* 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 * * *