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250708.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 8, 2025, Vol. 26, No. 135 Headlines B E L G I U M MEUSE FINCO: Moody's Rates New EUR400MM Sr. Secured Term Loan 'B1' F R A N C E AFFLELOU SAS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable G E R M A N Y SOFTWARE GMBH: Fitch Affirms 'B' LongTerm IDR, Outlook Stable G R E E C E ALPHA SERVICES: Moody's Withdraws 'Ba1' Long Term Issuer Ratings INTRALOT SA: Fitch Puts 'CCC+' LongTerm IDR on Watch Positive I R E L A N D ARBOUR CLO V: Fitch Assigns 'B-sf' Final Rating on Class F-R Notes AVOCA CLO XIV: S&P Assigns B-(sf) Rating on Class F-R-R Notes VEHIS AUTO 2025: S&P Assigns BB(sf) Rating on Class B-Dfrd Notes I T A L Y TIM SPA: S&P Affirms 'BB' ICR on Better Expected Leverage L U X E M B O U R G SANI/IKOS GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable N E T H E R L A N D S BE SEMICONDUCTOR: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ELASTIC NV: S&P Upgrades ICR to 'BB' on Deleveraging Momentum R U S S I A IPAK YULI: Fitch Alters Outlook on 'B' LongTerm IDR to Positive S P A I N JOYE MEDIA: Moody's Lowers CFR to 'B3', Outlook Remains Stable U N I T E D K I N G D O M 100LEMONS COMPANY: Opus Restructuring Named as Administrators CALDER METAL: Leonard Curtis Named as Administrators DIRECT LINE: Moody's Hikes Preferred Stock Rating from Ba1(hyb) ELECTIVA HOSPITALS: Begbies Traynor Named as Administrators EUROBOOZER LIMITED: Moorfields Named as Administrators GLYNN QUINN: Kennway Francis Named as Administrators LONDON PROPERTY: Exigen Group Named as Administrators NES FIRCROFT: Moody's Raises CFR to Ba3 & Alters Outlook to Stable WOW HYDRATE: Leonard Curtis Named as Administrators - - - - - ============= B E L G I U M ============= MEUSE FINCO: Moody's Rates New EUR400MM Sr. Secured Term Loan 'B1' ------------------------------------------------------------------ Moody's Ratings has assigned a B1 instrument rating to the proposed EUR400 million backed senior secured term loan B2 (new term loan) borrowed by Meuse Finco SA, a wholly owned subsidiary of Meuse Bidco SA (Gaming1 or the company), a gaming company. Concurrently, Moody's have affirmed the existing EUR300 million backed senior secured term loan B (existing term loan) and the existing EUR80 million (to be upsized to EUR100 million) backed senior secured revolving credit facility (RCF) both borrowed by Meuse Finco SA. Moody's have also affirmed Gaming1's B1 long term corporate family rating and its B1-PD probability of default rating. The outlooks for Gaming1 and Meuse Finco SA have changed to negative from stable. The net proceeds from the issuance of the new term loan will be used to refinance the existing term loan. The company is also planning to use the remaining proceeds and cash on balance sheet to fund general corporate purposes, which could be used to fund earnings-accretive business acquisitions, but which Moody's anticipates will be used primarily to fund shareholder distributions. RATINGS RATIONALE The affirmation of Gaming1's B1 ratings reflects the company's leading position in the Belgium gaming market, its large exposure to online activities, its good liquidity with solid positive free cash flow (FCF) generation and the long-dated maturity of its debt. The change in outlook to negative from stable factors in the increase in leverage following the proposed transaction. The change in outlook also takes into account weakened operating performance during Q1 2025 due to the temporary closure of a poker club in France and impacts of recently applicable new regulatory restrictions in some of the group's countries of operation. Following the proposed refinancing transaction and the concurrent increase in the company's gross debt, Gaming1 will be more weakly positioned within the B1 rating category. Moody's expects that Gaming1's Moody's-adjusted gross leverage will increase to around 4.5x in 2025 from 3.4x in 2024, which would leave the company outside the levels required for a B1 rating. Moody's also expects the transaction will weaken cash flow generation with an expected decrease of the group's Moody's-adjusted FCF to debt ratio towards 7% over 2025-26 (excluding any dividend linked to the refinancing) from close to 10% in 2024. After a period of solid EBITDA growth in 2024 driven by stable revenues combined with margin improvements, Moody's expects Gaming1's Moody's-adjusted EBITDA to moderately decline in 2025 due to the weaker first quarter and the proposed refinancing transaction costs. This should be balanced by the expected improvements in operating and financial performance in the second to fourth quarter of the year, thanks to the ongoing products improvements and innovation the group is implementing. However, the key downward risks to Moody's projections include the uncertainties related to the impacts of latest regulatory and fiscal evolution in some of the group's countries of operation. Assuming moderate EBITDA growth from 2026 onwards thanks to Gaming1's innovations and further cost savings initiatives, Moody's expects the company's Moody's-adjusted gross leverage to improve towards 4.0x. The company's B1 ratings continue to be also constrained by Gaming1's relatively small scale and its concentration in Belgium and in casino games. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS The decision to change the outlook to negative from stable reflects corporate governance considerations associated with the company's decision to increase leverage, and to consider a material shareholder distribution from the proceeds raised. Financial strategy and risk management is a governance consideration under Moody's General Principles for Assessing Environmental, Social and Governance Risks methodology. LIQUIDITY Gaming1's liquidity is good, supported by its cash and cash equivalents of slightly above EUR100 million as of the end of March 2025, and a EUR80 million fully undrawn revolving credit facility (RCF) available until January 2029. Following the refinancing transaction, Gaming1's RCF is expected to be upsized to EUR100 million. The company's liquidity is also supported by Moody's expectations that the group will generate positive free cash flow in the range of EUR35 million to EUR40 million in the next 12-18 months assuming no dividend distribution. The RCF features a springing senior secured net leverage covenant, which is tested when more than 40% of the RCF is drawn and required to be maintained below 6.5x. The company can avoid a breach using an equity cure. Gaming1's next significant debt maturity is the maturity of its term loan, which will be pushed to July 2030 from July 2029 following the refinancing transaction. STRUCTURAL CONSIDERATIONS Gaming1's B1-PD probability of default rating (PDR) is in line with the CFR, reflecting Moody's assumptions of a 50% recovery rate, as is customary for capital structures that include notes and bank debt. The term loans and RCF are rated B1, in line with the CFR, given they represent most of the company's financial debt. The term loan and RCF benefit from a security package limited to pledges over shares, intercompany receivables and significant bank accounts. They also benefit from upstream guarantees from significant subsidiaries ensuring that a guarantor coverage test of at least 80% of consolidated EBITDA is met. COVENANT Notable terms of the TLB documentation include the below. The following are proposed terms, and the final terms may be materially different. Guarantor coverage will be at least 80% of consolidated EBITDA (determined in accordance with the agreement) and include wholly-owned restricted subsidiaries representing 5% or more of consolidated EBITDA incorporated in Belgium, France and Switzerland. Security will be granted over key shares, receivables and material bank accounts. Incremental facilities are permitted up to the greater of EUR75 million and 75% of EBITDA. Unlimited pari passu debt is permitted if the senior secured net leverage ratio (SSNLR) does not exceed 3.25x. Unlimited restricted payments are permitted up to a SSNLR of 3.0x and unlimited investments are permitted if the SSNLR is 3.0x or less or if the total net leverage ratio is 5.75x or less; in each case, plus amounts funded from the available amount. Asset sale proceeds are only required to be applied in full where the SSNLR is greater than 2.75x. Adjustments to consolidated EBITDA include all "run rate" cost savings and synergies capped at 25% of consolidated EBITDA and reasonably anticipated to be achieved within 24 months. RATIONALE FOR NEGATIVE OUTLOOK The negative outlook on Gaming1 reflects the higher leverage level following the proposed refinancing transaction and Moody's expectations that the group's Moody's-adjusted gross leverage will remain higher than 4.0x for a prolonged period, and its free cash flow (FCF) will decrease to materially below 10%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, upward rating pressure in the next 12-18 months is unlikely. In addition, Moody's expects Gaming1's high leverage, relatively small scale, limited business profile and geographic scope to somewhat constrain the upward pressure on its rating. With continued improvements in scale and diversification, Moody's could upgrade Gaming1's rating over time if its Moody's-adjusted leverage declines well below 3x on a sustained basis, its FCF/debt trends above 20% and it maintains good liquidity. Further downward pressure will develop if its operating performance weakens, or it is hurt by regulatory developments and tax increases. Quantitatively, Moody's could consider downgrading Gaming1's rating if its Moody's-adjusted gross leverage remains above 4.0x on a sustained basis, its FCF/debt fails to improve towards above 10% or its liquidity weakens. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Gaming published in June 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 Gaming1 is a gaming company with online and land-based activities operating casino games, sports betting and poker games primarily in Belgium, but also in the Netherlands, France, Switzerland, Portugal and Spain. In land-based activities, the company operates over 40 gaming halls, casinos and gaming clubs in Belgium, France and Switzerland. In 2024, Gaming1 reported EUR480 million of revenues and a company-adjusted EBITDA of EUR117 million. The company is owned by a fund managed by CVC Capital Partners (55.17%) since 2022, in a partnership with the founding shareholders (44.83%). =========== F R A N C E =========== AFFLELOU SAS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Afflelou S.A.S's Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook. Fitch has also affirmed Afflelou's EUR610 million senior secured fixed-rate notes at 'B+' with a Recovery Rating of 'RR3'. The notes were recently increased by a EUR50 million tap. The affirmation reflects Fitch's expectation that Afflelou's leverage, despite a planned special shareholder distribution of EUR150 million, which is partly funded by additional debt, should remain within tolerable levels at 5.8x in FY25 (year-end July) before reducing to below 5.5x in FY27. The IDR continues to reflect Fitch's view of Afflelou's limited geographical and product diversification and moderately high financial leverage. This is balanced by its leading positions in its core markets, prospects of consistent revenue growth, supported by favourable demand trends, and a sustainably cash-generative business model. The Stable Outlook reflects its expectation of steady operating and credit metrics in a constructive and stable regulatory environment. Key Rating Drivers Special Shareholder Distribution Increases Leverage: The EUR50 million increase in gross debt to help finance the planned shareholder distribution will lead to a 0.4x increase in its projected EBITDAR leverage to 5.8x for FY25, largely exhausting rating headroom. The calculation includes IFRS16 reported liabilities, in line with its revised approach on leases. There is about a 0.5x difference against earlier calculation, where Fitch capitalised its lease proxy using an 8x multiple. The distribution will also be funded by a EUR70 million payment-in-kind shareholder loan to be issued outside the senior secured restricted group which Fitch treats as equity, and by EUR30 million of cash from the balance sheet. Deleveraging Prospects: Fitch believes continuing steady growth prospects in the optical business, mostly under a franchise model in France, alongside the roll-out of hearing-aid sections in stores at limited additional cost, should translate into gradually increasing EBITDAR and, consequently, deleveraging to below 5.5x by 2027. Sustained Positive FCF Generation: Fitch expects Afflelou to maintain healthy EBITDA margins of above 20%, supporting steady cash flow generation. Fitch continues to project FCF margins in the mid-to-high single digits, despite a slightly higher interest burden. This is due to limited capex, despite a slight increase in connection with planned expansion into the non-French speaking areas of Belgium and Switzerland, and manageable working capital requirements. Positive FCF of EUR20 million-30 million a year over 2025 should enable the company to rebuild its cash balances. Resilient Business Model; Sustainable Demand: Afflelou's business model combines the typical features of a retailer with a strong franchisor business, anchored in banner fees and wholesale distribution. At FYE24, over 96% of revenue was from prescription glasses (82%), contact lenses (6%) and hearing aids (8%). An ageing population and medical advancements for optical and hearing aid solutions support long-term demand. Improving Product Diversification: Afflelou is developing its hearing-aid business, using the same franchising model as its optical business by opening separate hearing-aid stores, but also exploiting synergies by adding hearing-aid sections to some of its optical stores. This will continue to diversify its operations, with hearing-aid products also benefitting from a constructive regulatory environment in France. Fitch expects the hearing aid market to gain momentum once consumers who have benefitted from the 100% Sante programme start replacing their devices. The growth potential for the hearing aid market in France is strong due to low penetration of only around 46%. Strong Brand Supports Franchise Model: Afflelou has a strong market position in France and Spain, and high brand awareness in France, given its third position in sales at 10%, behind Krys and Optic 2000. It is Spain's fourth-largest market participant by network revenue but is the largest franchisor banner by stores. Fitch views strong brand awareness as key to Afflelou's franchisor business model, which combines a wide product range with low price sensitivity from consumers due to private insurance and social security reimbursement of purchases. Its product diversification and brand awareness should allow it to outperform the broader market, especially the independents. Efficient Fixed-Cost Absorption: Fitch expects fixed cost absorption to become more efficient, with the rising number of hearing aids stores and corners in optical stores (in total 636 in April 2025 compared with 559 in April 2024), as it will now be supported by two lines of growing businesses. This will continue to support strong profit margins. Shareholder Reorganisation Affects Leverage: The shareholder distribution and tap are accompanied by an increase of ownership by the Afflelou family to 38% from 29%, which Fitch considers as positive for the company's long-term prospects. Fitch expects the family to aim for a gradual increase of ownership over time, potentially involving further shareholder distributions by the company. This restrains the potential for debt reduction. Peer Analysis A favourable reimbursement policy for vision products in France, covered by the state and mutual insurance policies, provides greater operational stability for Afflelou than conventional high street retailers, which face less predictable consumer behaviour and so are exposed to greater sales and earnings uncertainties. Afflelou is much smaller than Auris Luxembourg II S.A. (B/Stable), a supplier of hearing aids, in revenue and EBITDAR, and is less diversified geographically. Gross EBITDAR leverage is also higher for Afflelou after the debt issuance transaction mentioned above, but this is mitigated by better FCF margins, adjusted for special dividends. Afflelou does not directly compete against Takko Holding Luxembourg 2 S.à.r.l. (B/Stable) and is smaller, but it is more resilient given the non-discretionary nature of its sales. Both Afflelou and Mobilux Group SCA (B+/Stable) operate in the French market, with the former earning higher profit margins and more resilient to spending patterns but having higher leverage by almost two turns. Key Assumptions Fitch's Key Assumptions Within its Rating Case for the Issuer - Revenue growth to gradually slow to about 3% a year until FY29, with an average of 30 franchised stores opening a year and low single-digit like-for-like revenue growth - Steady EBITDA margin at 21%-22% until FY29 - Slightly negative net working capital outflow and capex at 5%-6% of revenue a year until FY29 - No acquisitions and shareholder distributions after FY25 Recovery Analysis The recovery analysis assumes that Afflelou would remain a going concern in a restructuring and that it would be reorganised rather than liquidated. This is because intangible assets, represented by its relationship with franchisees and suppliers, are key to the value of the company. Fitch has assumed a 10% administrative claim in the recovery analysis. Its going-concern approach updates the post-restructuring EBITDA to EUR70 million from EUR64 million, at which Afflelou's capital structure would become untenable. It also assumes corrective measures have been taken following a period of distress. Fitch assumes that distress would result from a contraction of the franchised network or adverse regulatory changes. The company's EUR30 million revolving credit facility (RCF) is assumed to be fully drawn in a default, and is super senior, ranking ahead of its senior secured notes. Fitch continues to assume a distressed multiple of 5.5x. Its waterfall analysis generated a recovery computation in the 'RR3' band (indicating a B+ instrument rating) for the EUR610 million senior secured notes, which were increased by a EUR50 million tap finalised in June 2025. Fitch sees no rating headroom for further senior secured debt issue at the 'B+' debt rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA below EUR75 million on a sustained basis due to weak network activity or adverse regulatory changes - EBITDAR gross leverage consistently above 6.2x due to debt-funded acquisitions and shareholder distributions or lack of deleveraging - EBITDAR fixed-charge coverage below 1.5x on a sustained basis - Post-dividend FCF margin falling towards the low-single digits or to neutral levels Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA approaching EUR100 million due to network and margin performance and a lack of impact from adverse regulatory changes - Financial policy supportive of EBITDAR gross leverage falling below 4.7x on a sustained basis - EBITDAR fixed-charge coverage consistently above 2.5x - Post-dividend FCF margin at or above 5% for an extended period Liquidity and Debt Structure Fitch anticipates that Afflelou will have EUR13 million of cash on balance sheet at FYE25 (pro forma for the shareholder distribution) and access to a fully undrawn EUR30 million RCF. The level of cash is limited compared with historical balances but is mitigated by its expectations of strong FCF generation. The company will have no refinancing needs until 2029. Fitch treats the EUR70 million holdco payment-in-kind notes issued by Afflelou PIKCO Limited as equity. Summary of Financial Adjustments Fitch has removed the EUR171 million portion of notes due in May 2026 from FYE24 debt. This portion was fully redeemed in May 2025, after the company placed the corresponding cash in escrow and was discharged from its payment obligations in July 2024. 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 ----------- ------ -------- ----- Afflelou S.A.S. LT IDR B Affirmed B senior secured LT B+ Affirmed RR3 B+ ============= G E R M A N Y ============= SOFTWARE GMBH: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Software GmbH's (SAG) Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook and affirmed its senior secured instrument rating of 'B' with a Recovery Rating of 'RR4'. SAG's ratings reflect its temporarily excessive leverage and negative free cash flow (FCF) until the completion of its large cost-cutting programme by end-2027, under Fitch's forecasts. Fitch expects EBITDA leverage to peak at 10.8x in 2025, before reducing to 6.3x in FY26 - a level more consistent with the rating. A high liquidity buffer, which will fund negative FCF and temporary non-recurring costs, offsets high execution risks associated with the expected rapid EBITDA improvement. Negative rating pressure may result from the company underperforming against its EBITDA forecasts and if FCF remains negative for longer than expected, reducing the company's liquidity buffer. However, Fitch expects FCF to normalise by FY28, which should support financial flexibility, though this is contingent on SAG's performance and cost plan implementation. Key Rating Drivers Stranded Costs Weigh on EBITDA: Fitch forecasts EBITDA at EUR95 million for 2025, which partially benefits from the company's cost savings in 2024 and 2025, down from EUR131 million in 2024. SAG has implemented EUR65 million of staff cost cuts and EUR73 million of non-staff savings at May 2025, out of a EUR229 million run-rate cost savings plan. Fitch forecasts that EBITDA will increase to EUR164 million in 2026 and EUR193 million in 2027, driven by the completion of the cost plan and its annualised benefits. The plan is fully funded and will not affect the company's liquidity profile. Its EBITDA forecast is more conservative than management's EUR281 million in 2027, reflecting the execution risks associated with a cost reduction of this scale, including potential delays. High Leverage to Reduce: SAG's EBITDA leverage increased above its 6.5x negative sensitivity for a 'B' rating in 2024 and Fitch expects it will remain above this level in 2025. Anticipated EBITDA increases following revenue growth, and the cost plan will allow for major deleveraging over the next three years. Therefore, Fitch expects EBITDA leverage to peak at 10.8x in 2025, before reducing to 6.3x in 2026 and further to 5.3x in 2027, placing it comfortably within its 'B' rating sensitivities in the next 12 -18 months. FCF Momentarily Constrained: Restructuring costs and temporarily low margins will keep FCF negative for the next three years, before it turns positive in 2028. Fitch expects SAG to boost FCF margins to above 5% (or EUR30 million equivalent by 2028) after restructuring costs subside, supporting liquidity and financial flexibility from 2028. The company will have negligible net working capital needs following its transition to a mainly subscription-based revenue model. This, alongside low capex requirements - since all R&D is expensed - results in a high FCF generation capacity. Strong Revenue Visibility: SAG has longstanding relationships with clients and a high renewal rate, of over 90%, supported by an average contract length of three years. Strong revenue visibility supports the implementation of its cost-cutting plan and its deleveraging prospects. This is reinforced by the mission criticality of A&N, a company product, and its role as a major contributor to SAG's profitability and FCF generation. Higher EBITDA Margins: The disposal of products - except ARIS - within the lower-margin DBP division has lifted SAG's overall expected EBITDA margin, further supported by A&N's higher profitability. This should raise the Fitch-defined EBITDA margin towards or over 30% in 2026, from 17.5% in 2024. A&N's strong profitability makes it an unlikely target for deep cost cutting and limits the scope for large upside in profit margins. However, Fitch assumes SAG will spend around EUR450 million-500 million on reducing its cost base over the next 12 months-18 months, due to stranded costs from disposals at the group level, to facilitate a structural margin improvement. A&N Remains Stable: Fitch forecasts A&N revenues to remain stable or rise in the low-to-mid single digits. The division's ability to acquire new customers is limited, though price increases, alongside new products and applications, will generate moderate revenue increases. A&N's products have low churn, are highly profitable and SAG's' largest contributor of cash flows. However, Fitch expects new investments by customers will be spent on building company data sets and data management systems with newer technologies and data storage systems. Leading Global Position: SAG has a highly diversified customer base and leading global position. It is recognised as a leader in the market for its A&N and ARIS products. It has about 1,000 customers globally in 74 countries, while its recurring revenues across its A&N portfolio should support its defensive market position as the industry develops and expansion opportunities are captured by ARIS. The latter's record of innovation and large set of artificial intelligence features places it favourably for the acquisition of new clients and capturing of higher growth versus A&N. A&N Faces Technology Risk: A&N, which is involved in data management software, is one of SAG's two businesses. It is exposed to risks linked to the availability of newer, alternative technologies. However, high switching costs and complex coding in A&N language mean the company should be able to manage potentially small volume declines with price increases and additional tool offerings. The group has publicly committed to support A&N customers until 2050 and beyond. Stable A&N Client Base: Large data-processing and data-sensitive enterprises legacy workloads tend to be substantial and complex, making full mainframe replacement unlikely. As a result, some enterprises are more likely to maintain a hybrid approach, maintaining mainframe and new technologies. Further, increasing workloads and data volumes - which drive higher mainframe usage - may partly offset impact from the secular decline of mainframes, helped by CPI-linked price rises embedded in most of their contracts with SAG. Peer Analysis SAG's operating profile is comparable to that of Teamsystem S.p.A. (B/Stable), Engineering Ingegneria Informatica S.p.A (B/Stable) and AlmaViva S.p.A.'s (BB/Rating Watch Negative). SAG's A&N revenue base has higher barriers to entry and is more recurring in nature than Teamsystem's products, but this is offset by its exposure to a mature market. In addition, ARIS is a less mission-critical technology than Teamsystem's product suite. SAG is also comparable in size to Teamsystem although has much better product and geographic diversification. However, revenue risks associated with the older product technology in A&N poses higher execution risks to its deleveraging path than Teamsystem. This reflects the latter's strong organic growth and deleveraging prospects as a leader in a market with strong secular expansion trends. SAG's operating profile is in line with that of Engineering and AlmaViva. The latter two have a higher portion of third-party software solutions and consulting services than the former's fully proprietary software solution suite and recurring revenue base while being exposed to markets with higher CAGRs. However, Engineering and AlmaViva have lower margins and face more constrained profitability. Similar to SAG, Kyndryl Holdings, Inc. (BBB/Stable), DXC Technology Company (BBB/F2/Negative) and Hewlett Packard Enterprise Company (BBB+/F2/Stable) are also affected by the secular decline in mature technologies as companies accelerate their migration from on-premise to public cloud data management infrastructures. These higher-rated peers are much larger and better capitalised than SAG and their resulting leverage profiles are also more stable, giving them headroom to restructure loss-making contracts and shift to higher-value services. Key Assumptions - Revenue from ARIS to rise 8%-15% a year in 2025-2027 - Revenue from A&N to increase 4%-6.5% a year in 2025-2027 - Fitch applies a haircut to expected cost savings and staggers the EBITDA benefit for longer compared with management expectations, resulting in a EUR200 million cost saving by end-2028, compared with management's expected EUR230 million by end-2027 - Fitch-defined EBITDA margin to increase to 20.8%, 33.3% and 37.2% in 2025, 2026 and 2027, respectively, from 17.5% in 2024 - Working capital cash flows to neutralise in 2025, followed by inflows of around 0.5%-1% of revenues in 2026-2027 - Capex of about EUR8 million-9 million a year 2025-2027 - Non-recurring expenses totalling EUR480 million between 2025 and 2027 Recovery Analysis The recovery analysis assumes that SAG would be considered a going concern in bankruptcy, and that it would be reorganised rather than liquidated, due to the inherent value of its contract portfolio, its incumbent software licences and strong client relationships. Fitch has assumed a 10% administrative claim. Fitch assessed a going concern EBITDA at about EUR110 million. Fitch estimates that at this level of EBITDA, after the undertaking of corrective measures, SAG would generate neutral-to-negative FCF. Financial distress, leading to a restructuring, may be driven by a shrinking client base as customers accelerate their migration to newer technologies. An enterprise value multiple of 5.0x is applied to the going concern EBITDA to calculate a post-reorganisation enterprise value. This is in line with the lower end of multiples used for other software-focused issuers rated in the 'B' category due to A&N's revenue risks. Its recovery analysis included SAG's EUR1.015 billion senior secured term loan B and its EUR119 million Revolving Credit Facility (RCF), which rank equally with each other. Fitch assumed the RCF would be fully drawn upon distress for the purpose of its recovery computation. Its analysis resulted in expected recoveries for the senior secured term loan B within a 'RR4' Recovery Rating and a 'B' instrument rating, in line with the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Lack of visibility on EBITDA gross leverage reducing to below 6.5x due to slow profit growth or large reductions in revenues - EBITDA/interest paid below 2.0x without any improvement over the next 18 months - Cash flow from operations less capex/gross debt remaining below 2.5% through the cycle - Unsuccessful implementation of the cost plan, leading to a weakening liquidity profile Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 5.0x on a sustained basis - Cash from operations less capex/total debt sustainably higher than 10% - EBITDA/interest paid above 2.5x - Successful implementation of the company's cost plan while continuing to grow the company's revenues organically Liquidity and Debt Structure SAG's liquidity is adequate with around EUR705 million of cash and cash equivalents on its balance sheet at end-2024 and an undrawn EUR119 million RCF. Its cash balance is sufficient to finance its negative FCF and restructuring payments up to 2027. SAG has no large debt maturities until 2029. Issuer Profile SAG is a German software company that provides essential infrastructure software to manage data flows across enterprises. 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 ----------- ------ -------- ----- Software GmbH LT IDR B Affirmed B senior secured LT B Affirmed RR4 B =========== G R E E C E =========== ALPHA SERVICES: Moody's Withdraws 'Ba1' Long Term Issuer Ratings ---------------------------------------------------------------- Moody's Ratings has withdrawn all outstanding ratings of Alpha Services and Holdings S.A. (Alpha Holdings), and has assigned new ratings to Alpha Bank S.A. (Alpha Bank). More specifically, Moody's have withdrawn the following ratings of Alpha Holdings: Ba1 long-term issuer ratings, (P)Ba1 long-term EMTN programme senior unsecured ratings, (P)Ba1 long-term EMTN programme junior senior unsecured ratings and (P)Ba1 long-term EMTN programme subordinated ratings. The outlooks on Alpha Holdings long-term issuer ratings were positive prior to their withdrawal. Moody's have also affirmed the Ba1 long-term subordinated rating on the outstanding Tier 2 notes (ISIN of XS2307437629 & XS2835739660), and the B1(hyb) long-term preferred stock non-cumulative ratings on the outstanding Additional Tier 1 (AT1) notes (ISIN of XS2583633966 & XS2805274326) issued by Alpha Holdings. These existing debt instruments have now been taken over by Alpha Bank, via the issuer substitution clause. Concurrently, Moody's have assigned the following ratings to Alpha Bank: Baa2 long-term issuer ratings with positive outlook, and (P)B1 long-term preferred stock non-cumulative rating under the bank's updated EUR15 billion EMTN programme. All other existing ratings and assessments of Alpha Bank remain unaffected by this rating action. RATINGS RATIONALE This rating action was triggered by the group's decision to simplify the holding and operating bank structure by carrying out a reverse merger between Alpha Bank and Alpha Holdings. The latter has ceased to exist as a legal entity on June 27, 2025, while all its creditors are now creditors of Alpha Bank through their existing type of debt instruments and related priority of claims. Alpha Bank as surviving entity is now listed on the Athens stock exchange and has assumed all outstanding liabilities of the group. It has become the parent company of the Group while retaining its license as a credit institution. ADVANCED LOSS GIVEN FAILURE (LGF) ANALYSIS POINTS TO LOW LOSSES FOR SENIOR UNSECURED DEBT CREDITORS Alpha Bank's newly-assigned long-term issuer ratings of Baa2 are positioned two notches above its Baseline Credit Assessment (BCA) of ba1, indicating very low losses in a resolution scenario based on Moody's Advanced LGF analysis. Alpha Bank has already issued sufficient bail-in-able instruments to meet its Minimum Requirement for owned funds and Eligible Liabilities (MREL), which provides ample loss absorbing cushion to depositors and senior unsecured creditors. Concurrently, the Ba1 rating assigned to the bank's subordinated (Tier 2) debt is positioned at the same level as its BCA, and takes into account the bank's more junior liabilities that provide some level of protection to Tier 2 creditors based on its funding plans over the next 2-3 years. The B1(hyb) rating assigned to the bank's non-cumulative preferred stock or Additional Tier 1 (AT1) capital instruments is positioned three notches below its BCA, and reflects the potentially higher losses that such creditors could sustain in a resolution scenario. POSITIVE RATING OUTLOOK MAINTAINED The positive outlook on the long-term deposit and senior unsecured ratings, unaffected by this rating action, reflects Moody's expectations that Alpha Bank will continue to improve its credit profile in the next 12-18 months. The bank is likely to increase further its earnings and capital levels, and will reduce its problem loans ratio, although at a slower pace than before. These factors, combined with the synergies resulting from the reverse merger, exert upward pressure on the bank's BCA, which is still positioned one notch lower than the Government of Greece rating (Baa3 stable). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The deposit and senior unsecured debt ratings could be upgraded if there is any further improvement in the bank's asset quality and profitability, while it maintains solid capital metrics and continues to comply with its MREL requirements. These trends will improve its solvency and loss absorbing capacity. In addition, any significant increase in the bank's subordinated liabilities, resulting in higher loss absorbing buffer under Moody's Advanced LGF analysis, could exert positive pressure on its deposit and senior unsecured debt ratings. Given the current positive outlook on the long-term deposit and senior unsecured ratings, a downgrade is unlikely at this point. However, Alpha Bank's ratings could be downgraded in the event of a sharp increase in its new problem loans formation, without any significant improvement in its recurring profitability. Any deterioration in the operating environment will also exert downward pressure on the bank's ratings. The ratings could also be downgraded as a result of a reduction in the volume of loss-absorbing liabilities protecting creditors and depositors in case of failure. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in November 2024. 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. INTRALOT SA: Fitch Puts 'CCC+' LongTerm IDR on Watch Positive ------------------------------------------------------------- Fitch Ratings has placed Intralot S.A.'s 'CCC+' Long-Term Issuer Default Rating (IDR) on Rating Watch Positive (RWP). The RWP follows Intralot's announced acquisition of Bally International Interactive (BII), a segment of Bally's Corporation (B-/Rating Watch Negative). Intralot plans to finance the acquisition by issuing up to EUR1.6 billion of new debt and up to EUR400 million new equity. It will contribute cash proceeds and equity in the combined business to Bally's Corporation. Intralot will repay part of its existing debt from the new financing proceeds. After the transaction, Bally's Corporation will be the majority owner of the combined entity. The RWP reflects Fitch's expectations that the company will have an improved business profile and significantly lower financial risk after the transaction, with more sustainable medium-to long-term capital structure. Fitch expects to resolve the RWP after completion of the acquisition, potentially with a multi-notch upgrade of the IDR. Key Rating Drivers Improved Business Profile: The transaction will improve the combined company's business profile, with larger scale and higher product and geographic diversification along with improved operating profitability and free cash flow (FCF) margins. The profile will change with majority of the combined revenue to be derived from B2C versus 90% exposure to B2B for Intralot alone. This reduces revenue generation visibility, which is more predictable for B2B. The combined entity will be more exposed to the market dynamics of the strongly regulated UK market, its most important geography. In the combined entity, Fitch estimates a larger part of revenue will come from sports betting and iGaming, exposing it to a less secure, but mature market, which Fitch expects to grow at a stable pace, assuming no adverse regulatory changes. Longer-Term Capital Structure: A potential near-term upgrade of IDR is driven by its expectation of a medium-to-long-term capital structure to be put in place as part of the transaction that will address Intralot's looming refinancing risk. The current short-term capital structure with near-term debt maturities in January 2026 has been the main factor dragging Intralot's credit profile down to the 'CCC' category. The new capital structure and combined entity's business risk profile will support a medium to high 'b' Standalone Credit Profile (SCP), provided the company adheres to a consistent financial policy, maintaining leverage in line with the post-transaction profile and addressing approaching debt maturities with medium-term refinancing solutions. Healthy FCF Generation: Fitch estimates healthy FCF margins for the combined business with a minimum 35% of net income dividend obligation. In its assumptions Fitch incorporates higher dividend distributions at 50%, given strong Fitch-estimated FCF-before-dividends generation. This could be cut back to the minimum if there was operational underperformance or higher capital intensity. Strong Combined Business Deleveraging: Fitch expects the combined entity will maintain low EBITDAR leverage, gradually reducing to below 3.0x by 2028 from 3.8x in 2025, which on a standalone basis is strong for an entity in the 'b' rating category. Deleveraging will be driven by consolidated EBITDA margin expansion due to integration of BII business and realisation of synergies. Stronger Subsidiary Under PSL Criteria: Fitch views Intralot's SCP pro forma acquisition at medium to high 'b', stronger than its parent's consolidated credit profile. Fitch estimates Bally's Corporation's consolidated profile after the transaction will remain weak. Once the transaction is completed, Fitch is likely to apply its Parent and Subsidiary Linkage (PSL) Rating Criteria to Intralot's rating, using the stronger subsidiary path. If the final structure and the relationship between the parent and the subsidiary remain as expected by Fitch, Intralot's rating could be up to two notches higher than the parent's consolidated profile. B2C Fund B2B/B2G Capex: Intralot is expanding its US operations, participating in tenders for contracts in several US states. Individual contract scale is relatively large compared to Intralot's standalone operations, so Fitch expects new US contracts could add about EUR220 million capex over 2025-2029. This would be fully discretionary. BII's business is not capital intensive. Fitch therefore estimates BII's business to fund Intralot's capex strategy. Less Contract Portfolio Expiration Impact: Fitch views Intralot's B2B revenue as more visible and predictable than that of B2C gaming operators, although subject to licence or contract renewal risks. The company has also not always been able to compete for renewals with local or international peers. The current portfolio has a moderate license and contract expiration profile, but with some material expirations, such as Illinois, which represented 12% of revenue in 2024, in 2027. Intralot's ability to maintain a balanced license expiration profile will be less important for its rating trajectory after the transaction but could affect its credit profile in case of consistent non-renewals or lack of new contracts. UK iGaming Main Market: The combined entity will generate high share of revenue in the UK. It will be materially exposed to the UK online gaming market, the largest in Europe, but also one of the most heavily regulated. Its base case assumes no material adverse changes to UK market regulation or additional fiscal pressure and assumes low- to mid-single-digit growth rate in this segment. Fitch would treat any material unexpected adverse changes to regulation in the UK as event risk. Peer Analysis Pro forma for the announced transaction, combined Intralot will become a closer peer to evoke plc (B+/Negative), with similar revenue concentration in the UK market and exposure to the online segment, making both entities similarly exposed to that regulation. At the same time, evoke has higher EBITDAR leverage above 6.0x in 2024, which Fitch expects to gradually decrease to below 5.0x by 2027. Another close peer of the combined entity will be Allwyn International AG (BB-/Positive), an internationally diversified B2B and B2C provider with a complex group structure, but materially larger than combined Intralot. Meuse Bidco SA (B+/Stable) has less geographical diversification, with concentration on the mature European market and Belgium in particular, and concentration on iGaming. Its strong profitability and low leverage support its rating. Intralot's standalone financial profile is not comparable with those of other more B2C EMEA gaming companies, such as Flutter Entertainment plc (BBB-/Stable), Entain plc (BB/Stable), or its B2B peers International Game Technology plc (BB+/Stable) and Light & Wonder, Inc. (BB/Stable). Key Assumptions - Average mid-single-digit annual revenue growth in 2026-2029 -Improved profitability of combined Intralot - Dividends paid to minority shareholders increasing towards EUR12 million in 2029 from EUR5 million in 2025 - High capex intensity in 2026-2027 driven by the B2B segment moderating from 2028 - Dividend distribution at 50% of net income versus 35% minimally required in 2026-2029 allowed by strong profitability and healthy cash flow generation RATING SENSITIVITIES Fitch expects to resolve the RWP on the acquisition close, which is anticipated to be in Q4 2025. Consequently, resolution of the RWP could exceed six months. If the proposed deal does not happen, Fitch would remove the RWP, and the following rating sensitivities would apply to Intralot as a standalone business: Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - If the transaction does not go ahead, inability to refinance the upcoming maturities by end-3Q25 - EBITDAR leverage above 7.0x - EBITDAR coverage below 1.5x - Sustained negative or volatile FCF and lack of sufficient liquidity to support operations within the next 12-18 months Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - In the transaction does not go ahead, refinancing of the upcoming maturities by end of 3Q25 - Healthy liquidity, underlined by positive FCF and a lack of permanent revolving credit facility drawdowns - EBITDAR leverage below 5.0x - EBITDAR coverage above 1.8x on a sustained basis Liquidity and Debt Structure After the planned transaction, the company will have a completely new capital structure, with a medium-to-long-term maturity profile. Fitch expects strong cash flow generation. The combined entity will have comfortable liquidity. Issuer Profile Intralot is a supplier of integrated gaming systems and services. BII is an international interactive segment of Bally's Corporation, active in iGaming, with the UK its main market. 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 Prior ----------- ------ ----- Intralot S.A. LT IDR CCC+ Rating Watch On CCC+ ============= I R E L A N D ============= ARBOUR CLO V: Fitch Assigns 'B-sf' Final Rating on Class F-R Notes ------------------------------------------------------------------ Fitch Ratings has assigned Arbour CLO V DAC reset notes final ratings. Entity/Debt Rating Prior ----------- ------ ----- Arbour CLO V DAC A XS1836410180 LT PIFsf Paid In Full AAAsf A-R XS3081803879 LT AAAsf New Rating B-1 XS1836410933 LT PIFsf Paid In Full AAAsf B-2 XS1836411584 LT PIFsf Paid In Full AAAsf B-R XS3081804091 LT AAsf New Rating C XS1836412475 LT PIFsf Paid In Full A+sf C-R XS3081804414 LT Asf New Rating D XS1836412988 LT PIFsf Paid In Full BBB+sf D-R XS3081804687 LT BBB-sf New Rating E XS1836413283 LT PIFsf Paid In Full BB+sf E-R XS3081804844 LT BB-sf New Rating F XS1836413010 LT PIFsf Paid In Full B+sf F-R XS3081805064 LT B-sf New Rating Transaction Summary Arbour CLO V DAC is a securitisation with about 90% senior secured obligations and a component of senior unsecured, mezzanine, second-lien loans, first-lien last-out loans and high-yield bonds. Note proceeds were used to redeem the existing notes, except the subordinated notes, and to fund the portfolio with a target par of EUR400 million. The portfolio is managed by Oaktree Capital Management (UK) LLP. The collateralised loan obligation (CLO) has a 4.9 year reinvestment period and a nine-year weighted-average life (WAL) test. 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 of the identified portfolio is 25.4. High Recovery Expectations (Positive): At least 90% 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 61.8%. Diversified Asset Portfolio (Positive): The transaction has a concentration limit for the 10 largest obligors of 10%. The transaction also includes various other concentration limits, including a maximum exposure to the three largest Fitch-defined industries in the portfolio of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has two matrices effective at closing and another two effective 12 months after closing, all with fixed-rate limits of 5% and 10% and a obligor concentration limit of 20%. The closing matrices correspond to a nine-year WAL test while the forward matrices correspond to an eight-year WAL test. The transaction has a reinvestment period of about 4.9 years 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 Fitch modelled is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged after the reinvestment period. These include passing both the coverage tests and the Fitch 'CCC' limit after 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 An increase of the default rate (RDR) by 25% of the mean RDR and a decrease of the recovery rate (RRR) by 25% at all ratings in the current portfolio would lead to downgrades of one notch each for the class C-R to E-R notes and to below 'B-sf' for the class F-R notes. Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. Due to the better metrics and shorter life of the current portfolio than the Fitch stressed portfolio, the class B-R, C-R, D-R, E-R and F-R notes each have a cushion of two notches. Should the cushion between the current portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of four notches each for the class A-R to D-R notes and to below 'B-sf' for the class E-R and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A reduction of the RDR by 25% of the mean RDR and an increase in the RRR by 25% at all rating levels in the current portfolio would result in upgrades of up to four notches for all 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. 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 Arbour CLO V 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. AVOCA CLO XIV: S&P Assigns B-(sf) Rating on Class F-R-R Notes ------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Avoca CLO XIV DAC's class A loan and class X-R, A-R-R, B-1-R-R, B-2-R-R, C-R-R, D-R-R, E-R-R, and F-R-R notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. This transaction is a reset of the already existing transaction that closed in November 2017. The issuance proceeds of the refinancing notes were used to redeem the refinanced notes (the original transaction's class X, A-1-R, A-2-R, B-1-R, B-2-R, C-1-R, C-2-R, D-R, E-R, and F-R notes, for which we withdrew our ratings at the same time), and pay fees and expenses incurred in connection with the reset. The ratings assigned to Avoca CLO XIV's reset loan and notes reflect our assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated loan and notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, is in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,860.68 Default rate dispersion 473.44 Weighted-average life (years) 4.07 Weighted-average life (years) extended to cover the length of the reinvestment period 4.53 Obligor diversity measure 178.78 Industry diversity measure 22.70 Regional diversity measure 1.22 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.96 Target 'AAA' weighted-average recovery (%) 37.04 Target weighted-average spread (net of floors; %) 3.70 Target weighted-average coupon (%) 4.17 Rationale Under the transaction documents, the rated loan and notes will pay quarterly interest unless a frequency switch event occurs. Following this, the loan and notes will switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.5 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 its credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we modeled a target par of EUR400 million. Additionally, we modeled the target weighted-average spread (3.70%), the covenanted weighted-average coupon (4.50%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Until the end of the reinvestment period on Jan. 15, 2030, the collateral manager may substitute assets in the portfolio as long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the loan and notes. This test looks at the total amount of losses that the transaction can sustain--as established by the initial cash flows for each rating--and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our counterparty criteria. "The transaction's legal structure and framework are bankruptcy remote, in line with our legal criteria." The CLO is managed by KKR Credit Advisors (Ireland) Unlimited Co., and the maximum potential rating on the liabilities is 'AAA' under our operational risk criteria. S&P said, "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe the ratings are commensurate with the available credit enhancement for the class A loan and class X-R to F-R-R notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B-1-R-R to E-R-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from closing--during which the transaction's credit risk profile could deteriorate--we have capped our ratings on the loan and notes. "Given our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for all the rated classes of loan and notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A loan and class X-R to E-R-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R-R notes." Environmental, social, and governance S&P said, "We regard the transaction's exposure to environmental, social, and governance (ESG) credit factors as broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental and social credit factors is viewed as below average, while governance credit factors are average. For this transaction, the documents prohibit or limit certain assets from being related to certain activities. Accordingly, since the exclusion of assets from these activities 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." Avoca CLO XIV is a European cash flow CLO securitization of a revolving pool, comprising mainly euro-denominated leveraged loans and bonds. The transaction is a broadly syndicated CLO that is managed by KKR Credit Advisors (Ireland) Unlimited Co. Ratings list Amount Credit Class Rating* (mil. EUR) Interest rate§ enhancement (%) X-R AAA (sf) 3.25 Three/six-month EURIBOR N/A plus 0.90% A-R-R AAA (sf) 118.00 Three/six-month EURIBOR 38.00 plus 1.38% A Loan AAA (sf) 130.00 Three/six-month EURIBOR 38.00 plus 1.38% B-1-R-R AA (sf) 30.00 Three/six-month EURIBOR 28.00 plus 1.75% B-2-R-R AA (sf) 10.00 4.70% 28.00 C-R-R A (sf) 26.00 Three/six-month EURIBOR 21.50 plus 2.30% D-R-R BBB- (sf) 28.50 Three/six-month EURIBOR 14.38 plus 3.30% E-R-R BB- (sf) 17.50 Three/six-month EURIBOR 10.00 plus 5.75% F-R-R B- (sf) 12.25 Three/six-month EURIBOR 6.94 plus 8.22% Sub. NR 54.10 N/A N/A *The ratings assigned to the class A loan and class X-R, A-R-R, B-1-R-R, and B-2-R-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R-R, D-R-R, E-R-R, and F-R-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. VEHIS AUTO 2025: S&P Assigns BB(sf) Rating on Class B-Dfrd Notes ---------------------------------------------------------------- S&P Global Ratings assigned its 'AA- (sf)' credit ratings to Vehis Auto Leasing 2025 DAC's class A1 and A2 floating-rate notes, and its 'BB (sf)' rating to the class B-Dfrd floating-rate notes. At closing, the issuer also issued unrated asset-backed floating-rate class Z notes. At closing, Vehis Auto Leasing 2025 purchased a portfolio of Polish auto lease receivables originated by Vehis. This is the first Polish lease securitization that S&P has rated, and the first public transaction originated by Vehis. S&P said, "Our ratings address timely payment of interest on the class A notes and ultimate payment of interest by the legal final maturity date on the class B-Dfrd notes. For all classes, our ratings address ultimate payment of principal by the legal final maturity date." Vehis is an auto leasing company established in Poland in 2019. Its management team has long expertise in the Polish leasing market. The transaction securitizes receivables arising from leasing contracts over new and used vehicles granted to small and micro companies, and a small portion of consumer clients in Poland. The residual values of the leased vehicles corresponding to the lease receivables were sold to the issuer at closing, so direct market value risk is present in this transaction. The transaction does not feature any revolving period. The notes will amortize sequentially from the first payment date. There is no swap in place. Interest on the notes is indexed to one-month Warsaw Interbank Offered Rate (WIBOR) while the assets are indexed to three-month WIBOR. This mismatch exposes the issuer to basis risk. A combination of note subordination, the general reserve, and excess spread provides credit enhancement for the rated notes. The transaction has a split waterfall, one for interest and one for principal collections. Liquidity for the rated notes is available in the form of the general reserve as well as the use of principal collections in case of any shortfalls in payments of senior costs and interest on the most senior class of notes. Sovereign, counterparty, and operational risks do not constrain the ratings. The issuer is an Irish company limited by shares, which is bankruptcy remote, in line with S&P's legal criteria. Ratings Class Rating* Amount (mil. PLN) A1 AA- (sf) 637 A2 AA- (sf) 424.5 B-Dfrd BB (sf) 213.5 Z NR 104 *S&P's ratings on the class A1 and A2 notes address timely payment of interest and ultimate payment of principal, while our rating on the class B-Dfrd notes addresses the ultimate payment of interest and principal no later than the legal final maturity date. PLN--Polish zloty. NR--Not rated. ========= I T A L Y ========= TIM SPA: S&P Affirms 'BB' ICR on Better Expected Leverage --------------------------------------------------------- S&P Global Ratings affirmed its 'BB' long-term and 'B' short-term issuer credit ratings on Italy-based telecom operator TIM SpA, as well as its 'BB' ratings on the group's senior unsecured debt. The stable outlook reflects our expectation that TIM will focus on turning around its domestic business in line with our expectations, while maintaining robust trading in Brazil. This should lead to adjusted leverage remaining around 3.5x in 2025, FOCF to debt strengthening to more than 5%, and further improving credit metrics in 2026 and 2027. TIM SpA outperformed our EBITDA and free operating cash flow (FOCF) forecast for 2024. This led to better-than-expected adjusted leverage at about 3.5x versus 3.9x in our previous base case for 2024. S&P said, "The affirmation reflects improvements in deleveraging and our upward revision of the business risk assessment. TIM's financial performance exceeded our earnings forecast for 2024. This is largely due to better-than-expected organic cash generation in the second half following the Netco separation. As a result, adjusted leverage came in lower at 3.5x (from 3.9x in the previous base case) and adjusted FOCF to debt at 4.3% (-2.9%) in 2024. Notwithstanding the highly competitive nature of the domestic Italian market, TIM's continued efforts to contain customer churn should improve the domestic business. For instance, with the lower regulatory constraints on its domestic fixed operations after the Netco separation, the company has started to improve its bundling capabilities that combine mobile services with fiber to the home (FTTH) broadband and TV contents. This will enhance customer retention. In addition, TIM's focus on domestic fixed technology upgrades and coverage is progressing well with TIM's FTTH market share improved to 26.5% (from 26.0% last year) and fixed wireless access to 19.3% (18.9%) as of December 2024 according to AGCOM, Italian Communications Regulatory Authority. This, along with its repricing efforts, positively impacted fixed domestic average revenue per user (ARPU), increasing by 7.2% year on year in 2024 and 4.1% in the first quarter of 2025. Notwithstanding ARPU and ultra broadband subscriber base improvements, we continue to forecast decreasing total fixed subscribers base in 2025-2026 reflecting the decline in the legacy fixed telephony segment. In addition, we continue to observe weak mobile segment performance with negative ARPU developments and a declining total mobile subscriber base in 2024 and 1Q25 albeit less material than in the past years. Therefore, we expect the improvements in mobile segment will be gradual. "Taking everything into consideration, we forecast below 1% consumer domestic revenue growth on average between 2025 and 2027. We continue to expect healthy growth from the domestic enterprise segment, supported by the strong growth of its information and communications technology segment over the same period. Excluding Sparkle and given the anticipated weakening of the Brazilian real currency effect, we forecast TIM's revenue will decline by 8%-9% in 2025 before growing at about 1%-2% in 2026 and 2027. "We now anticipate adjusted FOCF will reach EUR700 million–EUR1.0 billion in 2025 and 2027, translating into adjusted FOCF to debt in the range of 5.0%-8.0%. This, along with moderate EBITDA growth in 2026-2027 reflecting the gradual improvements in domestic segment as well the benefits from saving costs and cash proceeds from Sparkle's disposal, should lead to a better deleveraging trend. We forecast S&P Global Ratings-adjusted net debt to EBITDA will remain at 3.5x in 2025 before declining to 3.2x in 2027 (which we previously foresaw only beyond 2027). We acknowledge that according to the revised base case scenario the forecasted credit metrics in 2025-2027 are now well within the threshold that we regard as commensurate with a higher rating. Nevertheless, limited track record since the Netco separation in July 1, 2024, and limited cushion to our projections in the context of the highly competitive Italian telecom market constrain rating upside for now. We do not include potential extraordinary cash inflows related to a potential windfall from licensing fee litigation, due to the uncertainty on the size and timing at this stage and consequently the impact to our credit metrics. "We revised upward our business risk assessment to satisfactory because we reassessed our view of TIM's business risk compared with peers in the European telecom market. The group's considerable size and strong footing in its domestic market and diversification to the more rational market in Brazil remain a key consideration for our business risk profile. TIM has a sizable consumer base with around 15.9 million domestic and 62.0 million Brazil mobile customers, as well as around 7.1 million domestic and 1.5 million Brazil fixed retail customers as of March 31, 2025. The company generated EUR13.7 billion revenue (excluding Netco) in 2024. This compares favorably with other large European telco peers such as iliad S.A. (BB/Positive/B), Koninklijke KPN N.V. (BBB/Stable/A-2), and Proximus PLC (BBB+/Negative/A-2). Having said that, TIM's weaker profitability level with reported EBITDA margin at around 30% in 2024 versus iliad (48%) and KPN (47%) reflects the very challenging competitive environment in Italy and continues to weigh down its business risk assessment. "We do not consider TIM to be an asset-light telco operator because it continues to own crucial infrastructure elements, similar to most other mobile operators. TIM still owns the bulk of its mobile network (excluding the passive tower infrastructure), including about 22,000 items of radio access equipment and a mobile spectrum. Regarding the fixed network, TIM continues to own its transport and national and regional internet protocol backbones, as well as an extensive content delivered network and 16 large data centers. Nevertheless, the group has sold to Fibercorp the downstream part of its fixed network, including all optical line termination (OLT) and digital subscriber line access multiplexer (DSLAM) active equipment. Therefore, we consider TIM to be still a significantly asset-intensive operator, albeit to a lesser extent than its infrastructure-based telecom peers as regards the downstream part of the fixed network. We think TIM's still-significant asset intensity underpins its service differentiation, scalability, and therefore growth prospects and we believe that the group will retain its strong position as the incumbent telecommunications operator in its domestic Italian market. As of Dec. 31, 2024, TIM had 26.8% mobile market share and 37.5% fixed retail market share according to AGCOM. "We also consider that it has sound geographic and business diversity, with significant exposure to the enterprise segment and strong contribution from its growing Brazilian subsidiary that further support our business risk assessment. Although Brazil's telco market remains competitive as it is highly exposed to prepaid mobile services, the continued growing postpaid mobile subscribers, representing about 49.6% of TIM Brasil's total mobile subscribers in the first quarter of 2025, partially addressed this risk. In addition, the change in market structure in Brazil to three mobile network operators in 2022 has alleviated the competitive pressure, resulting in a more rational market. "We view TIM's liquidity as adequate for the next 12 months. The company maintains adequate liquidity thanks to availability of the downsized EUR3.0 billion revolving credit facility, which is currently fully undrawn, and cash balance of EUR3.8 billion as of March 31, 2025. This, in conjunction with the anticipated positive FOCF generation and cash proceeds from Sparkle's disposal, will adequately address material debt maturities of about EUR3.8 billion over the next 12 months. "We revised upward our management and governance assessment to neutral from moderately negative. This reflects the company's improving track record of delivering its financial performance guidance and target leverage over the past quarters. We believe the management has developed a prudent risk management approach by carefully monitoring and mitigating churn rates risks , thereby further improving its domestic business which supports the neutral assessment. The recent change in the ownership structure, with Poste Italiane is anticipated to hold 25% of TIM's ordinary shares has moderately improved our assessment, as we expect there to be better strategic alignment that should benefit TIM's operations and improve management and strategy stability. "The stable outlook reflects our expectation that TIM will continue its focus to turn around its domestic business in line with our expectations, demonstrated by a stabilization in its customer base and ARPU, while maintaining robust trading in Brazil. This should lead to adjusted leverage remaining around 3.5x in 2025, FOCF to debt strengthening to more than 5%, and further improving credit metrics in 2026 and 2027. We therefore forecast ample headroom within the rating parameters. "Although we consider it unlikely over the next 12 months, we could lower our rating on TIM if it failed to grow its EBITDA and FOCF after leases in line with our base case, such that S&P Global Ratings-adjusted debt to EBITDA reached above 4.5x. This could happen if TIM failed to decrease its churn or if ARPU remained under pressure in the domestic market, or if the Brazilian real was materially devalued against the euro. "We consider an upgrade likely within the next 12–18 months if TIM performs in line with our projections, such that S&P Global Ratings-adjusted debt to EBITDA fell below 3.5x on sustainable basis and FOCF to debt strengthened comfortably above 5%." =================== L U X E M B O U R G =================== SANI/IKOS GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Sani/Ikos Group Newco S.C.A.'s Long-Term Issuer Default Rating (IDR) at 'B-' with a Stable Outlook. The 'B-' IDR reflects Sani/Ikos Group's smaller scale and a weaker financial profile than peers', with free cash flow (FCF) consistently under pressure from an asset-heavy business model. The weak financial profile is balanced by the company's strong niche in luxury lodging, which typically enjoys lower demand sensitivity to economic cycles. The Stable Outlook balances the resilience of business performance with leverage that is persistently high for Sani/Ikos' rating due to the time gap between debt-funded capex and operational cash inflows. Key Rating Drivers Deleveraging Delayed by New Projects: Fitch projects elevated leverage levels in the next four years on acquisitions of new property and commencement of new hotel projects. Leverage peak is still due in 2025, with EBITDAR leverage expected at 9.5x this year (compared to 9.0x in its previous rating case). The four hotels under development are timetabled to open throughout 2026-2029, gradually contributing to organic deleveraging. The rating affirmation reflects its estimate of intact, sustained positive FCF from operating assets contributing 75% to Sani Ikos's hotel portfolio and over 80% of asset value, and ability to delever in the absence of material development projects. Resilient Performance of Luxury Segment: Luxury lodging tends to exhibit higher resilience to economic slowdown due to high-net-worth individuals comprising material part of its customer base. Sani Ikos's performance in 2025 seasons remains solid and Fitch forecasts mid-to-high single digit increases in RevPAR across its brands. In 2026-2028, Fitch forecasts slower RevPAR growth in the low-to-mid single digit range, but new hotel openings will support top line growth, leading to a CAGR of 15% for revenue rises in that period in the Fitch case. Seasonal Operations, High Profitability: Sani Ikos's resorts operate six to seven months a year, with occupancy close to 95% in the holiday season (converting to annualised occupancy of 50%-60%). This high density allows for material cost optimisation, which is not easily scalable but highly variable off-season. This results in higher profitability than close peers, like Mandarin Oriental, and comparable with its strongest peers, such as Whitbread PLC (BBB/Negative). Fitch expects Sani Ikos's EBITDA margins to improve towards 35%, from 32%-32%, as it ramps up new sites. Growth Pipeline Affecting FCF Generation: Fitch has revised its capex forecast to incorporate recent property acquisitions for new hotel development, increasing 2025-2027 capex from EUR570 million to EUR750 million. This will lead to sharply negative FCF margins of -20%-30%, improving to high negative single digits by 2028. Although Sani Ikos generates sustained positive FCF from its operating assets and has the ability to achieve near break-even FCF in the absence of development projects, the latter represent higher business and execution risk, and, in combination with elevated leverage and low liquidity headroom, could put the rating under pressure. Niche Positioning, Small Scale: Sani Ikos's rating is constrained to 'b' rating category, given its small asset portfolio of 12 upscale resorts, of which seven are luxury all-inclusive hotels. Its business scale remains modest versus Accor SA (BBB-/Positive), Minor Hotels Europe & Americas, S.A. (BB-/Positive) or Hyatt Hotels Corporation (BBB-/Stable) and EBITDA is more comparable with smaller operators like FIVE Holdings BVI Limited (B+/Stable). However, high hotel density per resort (300 rooms or more with low break-even occupancy) and above-average revenue per available room (RevPAR) make Sani Ikos operationally more efficient than peers. Niche positioning within its luxury subsector and limited price sensitivity support organic average daily rate (ADR) growth. Fully-Ownedbut Encumbered Assets: Sani Ikos directly manages and mostly fully owns its hotel portfolio, which allows control over asset development and day-to-day operations. This approach helps ensure consistently high levels of service and efficiency. Fitch estimates that the fairly new real estate portfolio should allow the company to keep maintenance capex at around 3% of revenue, which is low relative to peers. All of Sani Ikos's owned operating real estate is mortgaged at the OpCo level. Peer Analysis Sani/Ikos Group's business profile compares well with that of FIVE Holdings (BVI) Limited (B+/ Stable), which is also a small hotel chain concentrated on a single market (Dubai). FIVE has slightly fewer rooms and greater room concentration on sites than Sani/Ikos Group. It operates only under one brand, while Sani/Ikos Group has two. FIVE also has fewer repeat bookings, as it targets young and affluent guests, while Sani/Ikos Group benefits from greater loyalty of mid-to high-income families with children. Conversely, Sani/Ikos Group relies on guests from Britain and Germany, while FIVE is more diversified. Sani/Ikos Group is present only in the luxury subsector, like FIVE. Its predominantly all-inclusive offer results in higher ADR than FIVE, but the latter's total revenue generated per available room nights (TrevPar) is higher due to its food and beverage revenue and the year-round operations of FIVE's properties compared with Sani/Ikos Group operating six months a year. Sani/Ikos is far smaller in number of rooms and business size than higher-rated globally diversified peers such as Accor SA (BBB-/Positive), Hyatt Hotels Corporation (BBB-/Stable), and Wyndham Hotels & Resorts Inc. (BB+/Stable). It also has a weaker financial structure, with higher leverage and more limited financial flexibility. This results in significant rating differential with these peers. Sani Ikos's decision to continue expanding its asset portfolio results in significant capex and provides limited financial flexibility as its assets are encumbered. Key Assumptions - ADR to rise 4% to 5% increase a year in 2025-2028, with average occupancies at 92% declining slightly to 91% in 2026, 2028 and 2029, following new hotel openings. - EBITDA margin to reduce to 32% in 2025 following investment in sales and marketing activities, then rising to 35% in 2027. Fitch forecasts a slight decline of margin in 2028, with two new hotels opening in the year. - Capex, including secured projects only and revised development and acquisition cost on existing and new locations, of around EUR955 million over 2025-2028. - Additional net debt proceeds of EUR405 million to fund expansion plans mostly in 2027-2028, following an anticipated net debt increase of EUR360 million by mid-2026. Recovery Analysis Fitch's Key Recovery Rating Assumptions: - A bespoke recovery analysis for Sani/Ikos Group creditors reflects a 'traded asset valuation', which is similar to a liquidation, backed by a substantial asset base, although the group's senior secured noteholders have no direct recourse to ring-fenced assets. Senior noteholders could seize ownership of its main operating entities by exercising share pledges and attempt to sell the special purpose vehicles that hold the assets (net of asset-backed debt that would need to be redeemed on change of control). - A 10% administrative claim. - Although opco creditors in a liquidation could seize their respective assets and obtain full recovery before the remainder of the proceeds is distributed among noteholders, Fitch assumes assets could be sold either individually or in aggregate. - Real estate value, externally estimated at EUR2.7 billion at end-2024 (excluding sites under development), has an advance rate of 55%. Discount rate is up from previously used 50%, to reflect part of 2026 expected development, given approaching completion and high level of capex spent to date. - Asset-backed opco debt of EUR1,183 million (including used capex facility lines and drawn EUR13 million revolving credit facility (RCF)) ranks first, followed by EUR25 million RCF at holding level, subsequently EUR15 million vendor financing and a EUR5 million shareholder loan from the Ikos Pinomar minority shareholder issued at opco level, which Fitch estimates on enforcement would rank ahead of holding company (holdco)-level senior secured notes. All of Sani/Ikos Group's operating real estate that it owns is currently mortgaged at the opco level. - The waterfall-generated recovery computation for the holders of the new senior secured notes assumes average recovery prospects on default and hence no notching from the IDR for the bond, resulting in a 'B-'/'RR4' debt rating. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Material underperformance with occupancy and ADR deterioration in the portfolio or from newly opened hotels, resulting in EBITDA margin falling below 30%. - No visibility of EBITDAR gross leverage trending below 7.5x within the next four years. - Sustained deterioration in FCF margin before growth capex. - EBITDAR fixed-charge cover below 1.5x. - Liquidity deterioration with minimal available liquidity to cover business requirements, interest and committed capex over the next 24 months. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Visibility of EBITDAR gross leverage trending below 6x. - Sustained positive FCF margin before growth capex and more limited negative FCF generation including growth capex with the margin trending towards low negative single digits under current capex assumptions. - EBITDAR fixed-charge cover above 2.0x on a sustained basis. Liquidity and Debt Structure Sani/Ikos Group had EUR37 million available cash at end-2024 (excluding EUR8 million of estimated restricted cash). At end of June, the group had drawn about EUR130 million from multiple asset financing facilities maturing in 2031 and a EUR90 million acquisition bridge loan maturing in March 2026. Additionally, it has access to over EUR220 million through an undrawn committed capex facility and EUR8 million undrawn from its EUR25 million RCF at holding level. Once the bridge acquisition loan is refinanced, operational cash flow, capex lines and new secured debt are expected to cover the planned capex and debt maturities over the next 18 months only, which are a limited liquidity position. The company has a record of raising new asset-backed debt, which partially alleviates liquidity risk from acquisition line refinancing and should building cost inflation increase its capex. Sani/Ikos Group has long-dated maturities, apart from its bridge loan. Its EUR350 million senior secured notes mature in 2030, while the majority of opco debt matures in 2031. The EUR25 million RCF matures in 2027. Issuer Profile Sani Ikos is an integrated owner and hotel operator in the luxury subsector (all-inclusive) focused on key leisure destinations. It owns a portfolio of 12 resorts (10 in Greece and two in Spain) and four secured developments in the pipeline in Greece, Portugal and Spain. 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 ----------- ------ -------- ----- Sani/Ikos Group Newco S.C.A. LT IDR B- Affirmed B- Sani/Ikos Financial Holdings 1 S.a r.l. senior secured LT B- Affirmed RR4 B- ===================== N E T H E R L A N D S ===================== BE SEMICONDUCTOR: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed BE Semiconductor Industries N.V.'s (BESI) Long-Term Issuer Default Rating (IDR) at 'BB+'. The Outlook is Stable. Fitch has also affirmed BESI's senior unsecured rating at 'BB+' with the Recovery Rating at 'RR4'. The affirmation reflects BESI's strong market share in semiconductor assembly equipment manufacturing, long-standing customer relationships, high profitability and low leverage. These strengths are balanced by its high exposure to the inherently cyclical industry, smaller scale of operations with limited diversification and a reliance on key markets and major customers. The timing and trajectory of a mainstream assembly upturn is difficult to predict due to new tariff uncertainties. Nevertheless, the Stable Outlook reflects that demand for advanced packaging for artificial intelligence (AI) applications remains strong, and Fitch expects this to offset much of the weakness in mainstream assembly. Fitch therefore forecasts a semiconductor market rebound in 2026 and 2027, supported by next-generation technologies. Key Rating Drivers AI Offsets Slowdown: Fitch expects AI investment to offset weakness in the mainstream communications, industrial and automotive markets in 2025. Demand for AI-related applications - especially in data centres, smartphones and automotive electrification - should drive semiconductor growth and support recovery in the industrial and automotive subsectors that Fitch anticipates in late 2025 and in 2026. BESI is well positioned to capture this demand, with strong orders for advanced packaging solutions, such as hybrid bonding for AI, memory and logic devices. Fitch expects accelerating AI adoption to offset the slowdown in mainstream equipment caused by tariff risk, helping to drive a semiconductor rebound in 2026 and 2027. Strong Position in Niche Market: BESI's advanced packaging platforms, including hybrid bonding, are firmly placed to meet rising demand for sophisticated assembly solutions in the next technology cycle. Fitch expects the group to maintain a stable share in the niche semiconductor assembly equipment market, supported by strong brand recognition and longstanding relationships with major customers, which create barriers to entry for competitors. BESI's focus on high-value applications - even though this is a small subsector of the semiconductor industry - stands to benefit from industry trends moving toward advanced packaging. Unique Business Model: Fitch sees BESI's business model strengths in its asset-light structure, which leads to lower capex and investment relative to peers, by using a global supply chain. This increases financial flexibility and resilience in downturns by allowing for faster reduction in costs and is reflected in the group's higher earnings margins. EBITDA Margins Resilient: BESI has maintained strong profitability despite recent industry declines, with average EBITDA margins above 40% due to effective cost management. Fitch expects the EBITDA margin to remain broadly stable at end-2025, and to average 46% to 2029, supported by revenue growth from the next technology cycle and an improved product mix. Fitch expects revenue to grow at an annual average of 16% for 2025-2029, reflecting a recovering assembly market and BESI's sustained market share. Financial Policy Unchanged: The stability of BESI's cash deployment policy is key to its rating. Fitch expects the group to continue balancing the needs of its business and shareholders, while maintaining a conservative capital structure with a net cash position of over 10% of revenues over the rating horizon. Fitch forecasts BESI will generate annual pre-dividend free cash flow (FCF) of EUR160 million on average across 2025-2029, or the equivalent of around 16% of revenue. Limited Diversification: BESI's ratings are constrained by its high exposure to the inherently cyclical industry, a fairly undiversified product portfolio and significant dependence on key markets and major customers. At end-2024, 67% of revenue was derived from Asia, while the top 10 customers have contributed over 50% of total revenues for the past four years. This is not uncommon in the sector but is a rating constraint compared with broader global diversified industrial groups. Both geographic and customer concentration remain a key risk to the rating, but are mitigated by long-standing customer relationships. Peer Analysis BESI's credit profile is in line with that of many issuers rated in the 'BB' category. The group is positioned less favourably than semiconductor manufacturing peers due to its niche focus in the wider semiconductor assembly market. BESI's conservative balance sheet, historically low leverage ratios and strong profitability place it ahead of peers in its rating category. Unlike companies such as ASML Holding N.V. (A+/Stable) and NXP Semiconductors N.V. (BBB+/Stable) that are also involved in the semiconductor market, ASML focuses on the front end of equipment manufacturing, while NXP is a leading integrated device manufacturer business. Both have leading market shares in their respective markets, supported by high barriers to entry from cumulative investments and better end-market diversification. BESI specialises in the back end of the semiconductor business and its business profile is limited by size compared with ASML and NXP. However, its profitability is stronger. The diversified industrials peer group includes ams-Osram AG (B/Stable), which, despite having high technology content in its end-products, has a significantly weaker financial profile. Other higher-rated peers in the diversified industrials sector, such as KION GROUP AG (BBB/Stable) and GEA Group Aktiengesellschaft (BBB+/Stable), are larger and more diversified, with less exposure to cyclical markets. However, these companies also have much lower EBITDA margins at typically between 10% and 13%. Key Assumptions - Revenue to increase by an annual average of 16% in 2025-2029, driven by a growing market - Average EBITDA margin at 46% to 2029, driven by a favourable product mix and revenue growth - Capex, including capitalised research and development expenditure, at around 4% of revenue on average - A continued balance between treasury buybacks and dividends distribution, in line with historical trends - Completion of its EUR80 million share repurchase plan in 2025 - No large M&A RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Loss of major customer contracts leading to EBITDA margin trending towards 30% on a sustained basis - Reduced customer/market diversification - Sharp increase in debt or decline in EBITDA, driving EBITDA leverage to around 2x on a sustained basis - Increased shareholder distribution leading to low single-digit FCF margins on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Increased share of aftermarket services to overall sales on a sustained basis and broader product and customer diversification - FCF margins consistently in the mid single digits - Cash flow from operations less capex/debt above 80% on a sustained basis - Net cash position on a sustained basis Liquidity and Debt Structure BESI maintains a strong liquidity profile, supported by a substantial cash balance and an undrawn committed revolving credit facility. At end-2024, its debt totalled EUR552 million, primarily comprising EUR199 million of outstanding senior unsecured convertible notes and EUR350 million of senior notes due 2031. Total cash and equivalents totalled EUR672.3 million, with an additional undrawn EUR80 million revolving credit facility maturing in 2026. Issuer Profile Based in Netherlands and operating globally, BESI is engaged in the development, manufacturing and service of semiconductor assembly equipment for multinational chip and electronics manufacturers. 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 ----------- ------ -------- ----- BE Semiconductor Industries N.V. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ ELASTIC NV: S&P Upgrades ICR to 'BB' on Deleveraging Momentum ------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating and issue-level ratings on Elastic N.V. to 'BB'. The upgrade reflects S&P's expectation that the company will sustain its S&P Global Ratings-adjusted leverage below 3x while continuing to deliver low-teens revenue growth, EBITDA margin expansion, and free operating cash flow (FOCF) above $200 million. Elastic lowered leverage promptly over the course of fiscal 2025 (ended April 2025) with support from mid-teens percent revenue growth and EBITDA margin expansion. Despite S&P's forecast for top-line growth deceleration fiscal 2026, it believes the company's lower leverage levels, strong free cash flow generation, and generally conservative financial policy support the higher rating. Elastic's transition to a balanced growth model has continued to improve earnings. In the second half of 2023, Elastic announced a strategic pivot to curb growth investments in pursuit of enhanced profitability. The decision marked a deliberate move to transition from a hyper-growth approach to a more disciplined operating model. Accordingly, operating expenses as a percent of sales fell to 78% in 2025 from 93% in 2022, and while revenue growth decelerated as expected, Elastic still increased sales 17% in fiscal 2025. Top-line performance had support from strong momentum in Elastic Cloud, which grew 23% in the fourth quarter, as well as from GenAI tailwinds across its Search business, particularly among larger customer cohorts with annual contract values (ACV) of $100,000 or greater and $1 million or greater. Similarly, tighter cost controls drove a 4% improvement in EBITDA margins to 15%, which contributed to nearly $260 million of FOCF and leverage of about 2.6x by year end. S&P said, "Despite softer-than-expected fiscal 2026 guidance, Elastic's strengthened credit profile supports the upgrade Elastic guided to 12% revenue growth in fiscal 2026, coming in short of our forecasts of about 15%. Macroeconomic challenges are primarily driving this conservative forecast, with Elastic facing sales cycles and close rate pressure across its U.S. public sector business, particularly among civilian agencies. "Despite the downshift in revenue trajectory, we expect Elastic to deliver strong profitability metrics over the course of fiscal 2026. By year end, we expect Elastic to reach adjusted EBITDA margins of 16.5% and generate roughly $280 million of FOCF, translating to FOCF to debt of about 48%. As Elastic settles into its strategic profitability shift, we expect the pace of deleveraging to slow, with debt to EBITDA projected to fall to low-2x by the end of fiscal 2026. High cash balances and a disciplined financial policy further support the upgrade. We believe Elastic will maintain its sizable net cash position--currently in excess of $1 billion--and expect only smaller tuck-in mergers and acquisitions (M&A) with limited potential for more transformative acquisitions. "The Stable outlook on Elastic reflects our expectation that the company will sustain its S&P Global Ratings-adjusted leverage below 3x while continuing to deliver low-teens percent revenue growth, EBITDA margin expansion, and FOCF above $200 million." S&P could lower the rating if: -- S&P no longer believe Elastic can sustain leverage below 3x due to weakening consumption trends or increasing platform investments; -- Its liquidity deteriorates due to transformative M&A activity and significant cash outflows; or -- Its revenue declines persistently because of intensified competition and material loss of market share. S&P could raise its rating if: -- S&P believes the company has strengthened its competitive position relative to its peers. This could occur if it sustains its above-average growth trajectory, increases its EBITDA margins, and generates higher FOCF; or -- It sustains and publicly commits to leverage below 2x over the next 12 months, either through earnings growth, increased cash flow generation, or debt repayment. =========== R U S S I A =========== IPAK YULI: Fitch Alters Outlook on 'B' LongTerm IDR to Positive --------------------------------------------------------------- Fitch Ratings has revised Joint Stock Innovation Commercial Bank Ipak Yuli's Outlooks to Positive from Stable, while affirming its Long-Term (LT) Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B'. Fitch has also affirmed the bank's Viability Rating (VR) at 'b'. The revision of the Outlooks reflects its expectations that favourable economic conditions in Uzbekistan will persist and result in a sustained strengthening of Ipak Yuli's business profile, its robust internal capital generation, and stable funding and liquidity. Key Rating Drivers Ipak Yuli's LT IDRs of 'B' are driven by the bank's intrinsic creditworthiness, as captured by its 'b' VR. The VR reflects the bank's limited franchise, high balance-sheet dollarisation, potentially vulnerable loan quality and substantial reliance on wholesale funding. It also incorporates high profitability, an adequate liquidity buffer and reasonable capitalisation. Improving Operating Environment: The operating environment for Uzbek banks has materially strengthened over the past two to three years and Fitch expects further improvements, particularly in addressing structural risks and enhancing the quality of regulation and governance. This, alongside a robust economy, should support business growth and translate into stronger earnings and capital generation, making banks' credit profiles more resilient. Therefore, Fitch has revised the outlook on the operating environment score to positive from stable. Small Bank, SME Lending Focus: Ipak Yuli is a small, privately owned bank in the concentrated Uzbek banking system (2.9% of sector assets). The bank grants corporate and SME loans (end-1Q25: 73% of gross loans) but is also developing its retail lending. It benefits from partial ownership by international financial institutions, which hold around 31% of shares, although its ownership structure is complex and lacks transparency. Rapid Growth, Notable Dollarisation: The bank had high FX-adjusted loan growth, averaging 28% in 2022-2024 and outpacing the sector's 15%. Loan expansion slowed to 4% in 1Q25, but Fitch expects it to accelerate until end-2025, with an increased focus on retail lending. Loan dollarisation was a high 35% at end-1Q25, but below the sector's 42%. Moderate Impaired Loans; Good Coverage: Ipak Yuli's impaired loans (Stage 3 loans under IFRS 9) remained stable, at 3.7% of gross loans at end-2024 (end-2023: 3.7%), while the total reserve coverage ratio declined to 82% (end-2023: 97%). Fitch expects some Stage 2 loans (end-2024: 10% of gross loans) to migrate to Stage 3, but the bank's impaired loans ratio is likely to remain below 6% in 2025-2026, supported by write-offs and loan growth. Strong Profitability: The bank's focus on high-yielding products supports wide margins (2024: 10%). This, alongside reasonable operating efficiency, leads to a high pre-impairment profit (2024: 8.3% of average loans). The bank's credit losses were limited at 0.6% of average loans, resulting in a high operating profit at 4.1% of risk-weighted assets (RWAs) in 2024 (2023: 4.6%). Fitch expects the bank's operating profitability to remain robust in 2025-2026, although this could be weighed down by larger credit losses. Reasonable Capitalisation: Ipak Yuli's Fitch Core Capital ratio reduced slightly to 14.1%, at end-2024 (end-2023: 14.7%), following a 33% RWA growth. The bank's regulatory Tier 1 capital ratio rose to 13.4% at end-1Q25 (end-2024: 12.1%), supported by strong profits, and comfortably exceeded the regulatory threshold of 10%. Fitch expects the Fitch Core Capital ratio to fall on anticipated loan expansion, but stay above 13% in 2025-2026. Wholesale Funding, Adequate Liquidity Buffer: Ipak Yuli's reliance on market borrowings was a notable 30% of liabilities at end-1Q25 (end-2023: 32%) under local GAAP, and comprised mostly long-term funds from international financial institutions. Non-state customer deposits made up 55% of liabilities, higher than at larger peers. The bank's liquidity cushion was an adequate 29% of assets at end-2024 and, net of wholesale repayments, covered 23% of non-state customer deposits. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Fitch would likely revise the Outlook on Ipak Yuli's IDRs to Stable, if there were no material improvements in the operating environment for Uzbek banks, or if there were a persistent decline in the bank's Fitch Core Capital ratio sharply below 12%, driven by weaker internal capital generation and aggressive growth. The bank's LT IDRs and VR could be downgraded as a result of material deterioration in asset quality, leading to a substantial increase in impairment charges and loss-making performance. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of Ipak Yuli's LT IDRs would require an improvement in Fitch's assessment of the local operating environment, while maintaining a stable financial profile. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS The Government Support Rating of 'no support' reflects Ipak Yuli's limited systemic importance in the highly concentrated Uzbek banking sector. The bank's market share was a low 2.9% of sector assets at end-1Q25. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES The Government Support Rating's upside is limited, unless there is a substantial increase in the systemic importance of the bank and an extensive record of timely and sufficient capital support to private banks by the sovereign authorities. 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 Prior ----------- ------ ----- Joint Stock Innovation Commercial Bank Ipak Yuli LT IDR B Affirmed B ST IDR B Affirmed B LC LT IDR B Affirmed B LC ST IDR B Affirmed B Viability b Affirmed b Government Support ns Affirmed ns ========= S P A I N ========= JOYE MEDIA: Moody's Lowers CFR to 'B3', Outlook Remains Stable -------------------------------------------------------------- Moody's Ratings has downgraded to B3 from B2 the long-term corporate family rating and to B3-PD from B2-PD the probability of default rating of Joye Media S.L. (Joye Media, Mediapro, or the company), a leading global integrated sports, media and entertainment group. Concurrently, Moody's downgraded to B3 from B2, the ratings on the EUR525 million guaranteed senior secured term loan B (TLB) due in August 2029, issued by Subcalidora 2 S.a r.l. The outlook for both entities remains stable. "The downgrade reflects the material operating underperformance of the group in 2024, which has led to a notable weakening of the company's key credit metrics and the expectation that they will not improve over the next 12 to 24 months to levels commensurate with a B2 rating," says Víctor García Capdevila, a Moody's Ratings Vice President-Senior Analyst and lead analyst for Mediapro. RATINGS RATIONALE In 2024, operating performance deteriorated beyond Moody's previous expectations, primarily due to the non-renewal of key audiovisual contracts. Additional contributing factors included weaker advertising sales, reduced marketing sponsorship, lower studio occupancy, and delays in project execution. The company reported revenues of EUR1,068 million in 2024, falling 15% short of Moody's EUR1,260 million forecast. Moody's-adjusted EBITDA also underperformed, reaching EUR111 million—36% below the projected EUR174 million. However, nearly EUR40 million of this shortfall is attributable to unusual and non-recurring expenses, which are not added back to Moody's-adjusted EBITDA. Despite these operational challenges, Moody's-adjusted free cash flow held up relatively well at negative EUR19 million, compared to the anticipated negative EUR11 million. This was supported by lower capital expenditures and a favorable change in working capital. However, credit metrics weakened significantly with Moody's-adjusted gross leverage increasing to 5.6x in 2024, up from 3.5x in 2023 and significantly above Moody's original estimate of 3.5x. This increase was driven by both lower EBITDA generation and a higher Moody's-adjusted gross debt level, which rose to EUR622 million from EUR557 million. The increase in debt was primarily due to the refinancing process completed in August 2024, in which the existing EUR500 million senior secured term loan A was replaced with a new EUR525 million senior secured term loan, along with the utilization of a factoring facility. Moody's base case scenario for 2025 and 2026 assumes modest revenue growth of approximately 1.5% and 1.0%, reaching EUR1,085 million and EUR1,093 million, respectively. Moody's-adjusted EBITDA is expected to increase slightly to EUR119 million in 2025 and EUR115 million in 2026. This limited top-line growth is primarily driven by the full-year impact of significant contract losses in 2024, further compounded by the unsuccessful bid in 2025 to retain production rights for the Spanish football league over the next five seasons. While the financial impact of this loss is only partially reflected in 2025, it will be fully realized in 2026. Although growth initiatives such as The Mediapro Studio's strategic investments in the US and Canada are underway, they are not expected to sufficiently offset the revenue shortfall from these lost contracts. A key downside risk to Moody's forecasts is a slower-than-expected ramp-up in the content production business in North America. The deterioration in the company's key credit metrics is unlikely to reverse to levels consistent with a B2 rating over the next 12–18 months. Moody's estimates that Moody's-adjusted gross leverage will remain elevated at approximately 5.2x in 2025 and 5.4x in 2026. Interest coverage, measured as EBITA to interest expense, is also expected to remain weak at 1.3x in 2025 and 1.2x in 2026. Mediapro's ratings reflects its large scale of operations; global footprint, with good geographical diversification; well-integrated operations across the value chain; and improving business risk profile, with an increased focus on the content production and audiovisual services divisions, and away from the less-predictable and more capital-intensive sports rights brokerage business. The ratings also reflects the company's weak operating performance and outlook, driven by the loss of major audiovisual contracts. Additional credit challenges include high Moody's-adjusted gross leverage, weak profitability and interest coverage metrics, a high concentration of earnings and cash flow from the LaLiga international contract, and persistent negative free cash flow (FCF). LIQUIDITY Mediapro's liquidity position remains adequate but has weakened due to lower expected financial flexibility under its covenants. As of March 2025, the company reported a cash balance of EUR121 million. Under Moody's base case scenario, Moody's projects negative free cash flow (FCF) of EUR4 million in 2025 and EUR16 million in 2026. The company continues to operate without access to a revolving credit facility (RCF). Following the refinancing transaction completed in August 2024, Mediapro faces no debt maturities until August 2029, when the current Term Loan B (TLB) matures. The TLB is subject to a net leverage maintenance covenant set at 3.75x. As of December 2024, the company reported a net leverage ratio of 2.74x, providing a 37% cushion relative to the covenant threshold. However, Moody's base case anticipates a significant reduction in covenant headroom to approximately 10% in 2025, with further compression expected in 2026, leaving only marginal headroom by year-end. STRUCTURAL CONSIDERATIONS Mediapro's capital structure comprises a EUR525 million guaranteed senior secured TLB due in August 2029. The B3-PD probability of default rating is in line with the B3 long-term corporate family rating (CFR), reflecting the 50% family recovery rate used. The B3 rating of the senior secured TLB is in line with the company's CFR, reflecting the absence of any other debt instrument in the capital structure. The security package is limited to share pledges, intercompany receivables and bank accounts. The group is subject to a minimum EBITDA guarantor coverage test of 80%. RATIONALE FOR STABLE OUTLOOK The stable outlook reflects Moody's expectations that the group's operating performance will stabilize over the next 12–18 months, supported by new growth initiatives that will offset revenue losses from non-renewed contracts. Moody's also anticipates the group will maintain an adequate liquidity profile at all times and gradually improve key credit metrics over the same period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure on the rating is unlikely in the short term. However, it could materialize if Mediapro's Moody's-adjusted gross leverage falls below 5.0x. In addition, the company would need to demonstrate a material and sustained improvement in its interest coverage ratio measured as EBITA to interest expense exceeding 1.5x, along with a consistent ability to generate positive free cash flow. The rating could face downward pressure if the company's operating performance continues to deteriorate, leading to a further increase in Moody's-adjusted gross leverage above 6.0x, a decline in the interest coverage ratio measured as EBITA to interest expense below 1.0x, sustained negative free cash flow, or a significant weakening of the company's liquidity profile. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in November 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 Joye Media S.L. (Mediapro) is a leading integrated international media group with operations in sports rights management, audiovisual services, content production and technology. It is present in more than 150 countries and employs nearly 7,000 people worldwide. In 2024, Mediapro reported revenue and Moody's-adjusted EBITDA of EUR1.1 billion and EUR111 million, respectively. Mediapro is majority-owned by Southwind Media Holdings Ltd (85%), followed by WPP Plc (10%) and the senior management team (5%). =========================== U N I T E D K I N G D O M =========================== 100LEMONS COMPANY: Opus Restructuring Named as Administrators ------------------------------------------------------------- 100lemons Company Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD), Court Number: CR-2025-004426, and Bradley Parrott and Charles Hamilton Turner of Opus Restructuring LLP were appointed as administrators on June 30, 2025. 100lemons Company's trading name is Embassy London. 100lemons Company engaged in the retail sale of footwear in specialised stores. Its registered office is at Unit 696 Salisbury House, London Wall, London, England, EC2M 5QQ Its principal trading address is at Ground Floor Units, Dexter Business Centre, 4-5 Sandpit Road, Dartford, Kent, DA1 5BU; 207 Chalk Farm Road, Camden, NW1 8AB; 2A Greenwich Market, London, SE10 9HZ; 11 Mercery Lane, Canterbury, Kent, CT1 2JL; and 22 Bond Street, Brighton, BN1 1RD The administrators can be reached at: Charles Hamilton Turner Bradley Parrott Opus Restructuring LLP 322 High Holborn London WC1V 7PB For further details, contact: Rizwana Patel Email: rizwana.patel@opusllp.com CALDER METAL: Leonard Curtis Named as Administrators ---------------------------------------------------- Calder Metal Spinning Company Ltd fka Rodney Bay Ltd was placed into administration proceedings in the High Court of Justice Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number: CR-2025-000640, and Anthony Milnes and Richard Pinder of Leonard Curtis were appointed as administrators on June 26, 2025. Calder Metal fka Rodney Bay Ltd engaged in joinery installation. The Company's registered office will be changed to c/o Leonard Curtis, 9th Floor, 7 Park Row, Leeds, LS1 5HD. It is currently Calder Metal, Unit 1 Calder Trading, 370 Bradford Road, Brighouse, Huddersfield, HD6 4DJ Its principal trading address is at Unit 1 Calder Trading Estate, 370 Bradford Road, Huddersfield, HD6 4DJ The joint administrators can be reached at: Anthony Milnes Leonard Curtis 1 & 2 Lion Chambers John William Street Huddersfield, HD1 1ES -- and -- Richard Pinder Leonard Curtis 21 Gander Lane, Barlborough Chesterfield, S43 4PZ For further details, contact: The Joint Administrators Email: recovery@leonardcurtis.co.uk Tel No: 0113 323 8890 Alternative contact: Melissa Smithers DIRECT LINE: Moody's Hikes Preferred Stock Rating from Ba1(hyb) --------------------------------------------------------------- Moody's Ratings has upgraded Direct Line Insurance Group plc's (DLG) ratings, including the Insurance Financial Strength Rating (IFSR) of key operating entity U K Insurance Limited to Aa3 from A2 and DLG's GBP350 million restricted Tier 1 securities – preferred stock non-cumulative rating to Baa1(hyb) from Ba1(hyb). In the same rating action, Moody's upgraded to A3(hyb) from Baa2(hyb) the rating on the GBP260 million backed subordinated Tier 2 notes due 2032 initially issued in 2020 by DLG which have been transferred to Aviva Plc (senior unsecured rating A2, stable outlook) on completion of the transaction on July 01, 2025. The Tier 2 notes are guaranteed by DLG. The outlook on all entities is stable. Previously the ratings were on review for upgrade. The rating action follows the completion of Aviva Plc's acquisition of DLG Group. From July 01, 2025, Direct Line Insurance Group plc is a wholly owned subsidiary of Aviva Insurance Limited (IFSR Aa3, stable), which is Aviva Plc's UK general insurance operating entity. Direct Line Insurance Group plc remains the direct parent company of U K Insurance Limited. RATINGS RATIONALE -- INSURANCE FINANCIAL STRENGTH RATING The upgrade of U K Insurance Limited's IFSR reflects Moody's expectations that the entity will benefit from the support of Aviva Plc, evidenced in part by the group's intention to transfer its insurance portfolio into Aviva Insurance Limited via a Part VII portfolio transfer. DLG's standalone ratings reflect (i) its position as a leading personal lines property and casualty (P&C) insurer in the UK, with powerful brands and good market share in motor and home insurance, and (ii) the group's strong solvency position, relatively conservative investment portfolio and low financial leverage. These strengths are offset by (i) underwriting performance which, while historically strong, is recovering following a significant deterioration due to claims inflation and difficult pricing conditions in 2022 and 2023, and (ii) concentration in the UK personal lines P&C market. -- TIER 2 SUBORDINATED NOTES DLG's Tier 2 subordinated notes have been transferred to Aviva Plc and carry a guarantee from DLG. The A3(hyb) rating on the subordinated notes reflects Moody's standard notching practice for such instruments, with reference to Aviva Plc's rating. The notching reflects: (i) the subordination of the notes; (ii) the optional and mandatory (in case of breach of regulatory capital requirements) coupon skip mechanisms; and (iii) the cumulative nature of deferred coupons, in case of deferral. The dated subordinated notes rank pari passu with all existing dated subordinated debt of Aviva Plc, and will constitute Tier 2 capital for Aviva Plc under Solvency UK. -- RESTRICTED TIER 1 DEEPLY SUBORDINATED NOTES The Baa1(hyb) rating on the restricted Tier 1 notes reflects their optional, non-cumulative coupon skip mechanisms and structural subordination to the Tier 2 subordinated notes. The notes carry mandatory deferral and conversion features, which were linked to DLG's regulatory solvency ratios. However, in Moody's views, the related triggers are no longer meaningful given that DLG is no longer subject to group supervision under Solvency UK (group regulation post-acquisition is at the Aviva Plc level) and hence will not be reporting, or be subject to, any metrics that could have triggered mandatory conversion or coupon deferral. As such, Moody's have considered the debt as subordinated debt with a non-cumulative optional coupon skip and notched further for their relative subordination to DLG's guarantee of Tier 2 notes which were transferred to Aviva Plc. Moody's do not expect the notes to constitute regulatory capital for Aviva Plc under Solvency UK. -- OUTLOOK The stable outlook is in line with that of Aviva Plc. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The following factors could lead to an upgrade of the rating: (1) An upgrade of the ratings of Aviva Plc and/or Aviva Insurance Limited. Conversely, the following factors could lead to a downgrade of the rating: (1) A downgrade of the ratings of Aviva Plc and/or Aviva Insurance Limited; (2) lower integration of DLG into the Aviva group than expected; and (3) significant deterioration in DLG's standalone credit profile, such as very weak performance or a significant deterioration in its market position. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Property and Casualty Insurers published in April 2024. 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. ELECTIVA HOSPITALS: Begbies Traynor Named as Administrators ----------------------------------------------------------- Electiva Hospitals 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-000629, and Bob Maxwell and Richard Kenworthy of Begbies Traynor (Central) LLP were appointed as administrators on June 25, 2025. Electiva Hospitals engaged in hospital activities. Its registered office is at Floor 2, 10 Wellington Place, Leeds, LS1 4AP. The joint administrators can be reached at: Bob Maxwell Richard Kenworthy Begbies Traynor (Central) LLP Floor 2, 10 Wellington Place Leeds, LS1 4AP For further details, contact: Grace Sellars Begbies Taynor (Central) LLP Email: grace.sellars@btguk.com Tel No: 0113 244 0044 EUROBOOZER LIMITED: Moorfields Named as Administrators ------------------------------------------------------ Euroboozer Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England & Wales, Insolvency and Companies List (ChD), No CR-004322 of 2025, and Andrew Pear and Michael Solomons of Moorfields were appointed as administrators on June 25, 2025. Euroboozer Limited specialized in wholesale of wine, beer, spirits and other alcoholic beverages. Its registered office and principal trading address is at Units 2 & 3 Northbridge Road, Berkhamsted, HP4 1EF. The joint administrators can be reached at: Andrew Pear Michael Solomons Moorfields 82 St John Street London EC1M 4JN Tel No: Telephone: 020 7186 1144 For further details, contact: Tess Mitchell Moorfields 82 St John Street London EC1M 4JN Email: tess.mitchell@moorfieldscr.com Tel No: 020 7186 1182 GLYNN QUINN: Kennway Francis Named as Administrators ---------------------------------------------------- Glynn Quinn Foods Ltd was placed into administration proceedings in the High Court of Justice, Court Number: CR-2025-000064, and Melissa Jackson of Kennway Francis Limited were appointed as administrators on June 27, 2025. Glynn Quinn is a licensed restaurant. Its registered office is at East Lodge Bedlars Green, Great Hallingbury, Bishop's Stortford, CM22 7TL Its principal trading address is at 47 Raleigh Road, Southville, Bristol, BS3 1QS The joint administrators can be reached at: Melissa Jackson Kennway Francis Limited Ground Floor, Kings House 101-135 Kings Road, Brentwood Essex, CM14 4DR For further details, contact: Email: melissa.jackson@kennwayfrancis.co.uk Tel No: 020 7129 7366 LONDON PROPERTY: Exigen Group Named as Administrators ----------------------------------------------------- London Property Services (Repair And Maintenance) Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Court Number: CR-2025-000914, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on July 1, 2025. London Property Services engaged in combined facilities support activities. Its registered office is at Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD Its principal trading address is at 2nd Floor Beaumont House, 1b Lambton Road, London, England, SW20 0LW The joint administrators can be reached at: David Kemp Richard Hunt Exigen Group Limited Warehouse W, 3 Western Gateway Royal Victoria Docks London E16 1BD For further details, contact: David Kemp Tel No: 0207 538 2222 NES FIRCROFT: Moody's Raises CFR to Ba3 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Ratings has upgraded to Ba3 from B1 the long term corporate family rating and to Ba3-PD from B1-PD the probability of default rating of NES Fircroft BondCo AS (NESF). Concurrently Moody's have upgraded to B1 from B2 the rating of the $350 million guaranteed senior secured Nordic Bond (Nordic Bond) due in September 2029. The outlook has changed to stable from positive. "NESF has consistently exceeded Moody's growth expectations since Moody's rated the company in 2022 and it remains on track to reduce its exposure to the oil and gas sector below 60% of its total revenue while maintaining stable EBITDA margins", says Stefano Cavalleri, a Moody's Ratings Vice President – Senior Analyst and lead analyst for NESF. RATINGS RATIONALE The rating upgrade reflects the consistent strong performance of the business since Moody's rated the company in 2022, in terms of free cash flow (FCF) generation and EBITDA growth, improved liquidity profile and with a Moody's-adjusted debt to EBITDA ratio expected to reduce to 3.5x at the end of October 2025. Moody's views NESF's exclusive focus on recruiting highly skilled engineers as a key differentiator; strong demand for such skillsets along with well continued operational efficiencies has positioned NESF as one of the very few staffing companies in Moody's rated universe that achieved a positive organic growth in the past 18-24 months. Additionally NESF's business profile has continued to improve via reducing exposure to oil & gas; Moody's understands the company's net fee income (NFI) generated from non oil & gas work to be already at 40% and a further reduction is expected in the next 12-18 months. The Ba3 CFR rating of NESF is supported by its (1) established niche market-leading position as a global oil and gas staffing company that is increasingly diversifying into other engineering industries such as life sciences, renewables and chemicals; (2) countercyclical working capital profile, which ensures adequate liquidity in a downturn, combined with a highly flexible cost structure; (3) long-standing relationships with blue-chip clients based on multiple local contracts and relationships; and (4) high level of satisfaction of contractors and repeat business from a pool of more than 23,000 active contractors (currently billing). At the same time NESF's rating is constrained by the company's (1) relatively small size in a highly fragmented industry; (2) still generating the majority of its NFI from the cyclical oil and gas industry; (3) use of invoice discounting facilities (IDFs) which weaken recovery value in case of bankruptcy for other debtholders in the capital structure; and (4) possible future acquisitions given the company's acquisitive track record which is partially mitigated by a track record of returning to a long term net debt to EBITDA ratio (as adjusted by the company) of less than 2.5x, in line with the company's financial policy. ESG CONSIDERATIONS Governance is a key consideration for this rating action. Moody's positively view management track record in attaining to its financial policy of a company's adjusted net debt leverage of 2.5x and improving its liquidity profile. Additionally Moody's acknowledge the main beneficial owner, AEA Investors with 54%, has adopted a rather conservative financial policy during its ownership of over 10 years and Moody's expects no changes to such approach. LIQUIDITY NESF has good liquidity. Cash on balance sheet at the end of January 2025 was $150 million, in addition to a committed $100 million super senior revolving credit facility (RCF) expected to remain undrawn. Additionally, in 2024, the company has obtained a new committed $100 million borrowing base/asset based lending facility (ABL) maturing in September 2027, reducing its reliance on short term invoice discounting facilities (IDFs). NESF largely finances its working capital needs to support the typical salaries payment cycle through IDFs that are linked to receivables, which carry a much lower interest rate than the RCF. NESF has a number of IDFs in place with multiple lenders, for a total capacity of about $119 million (local currencies, USD equivalent), subject to eligible receivables. Such facilities are recorded as shorter credit lines (less than 12 months) as they can be shrunk or withdrawn by the lenders at a 12-month interval (review period). Although Moody's do not consider IDFs as liquidity lines because of their short-term contractual commitment, Moody's do recognise that it is highly unlikely for such facilities to be withdrawn entirely because of the credit risk residing with a portfolio of high-quality receivables mostly from blue-chip companies and with a credit rating better than that of NESF. STRUCTURAL CONSIDERATIONS The 8% $350 million Nordic Bond instrument rating of B1 is one notch lower than the CFR because of its subordination in right of payment to the super senior RCF and its structural subordination. The recovery rate is assumed at 50% for a capital structure with both bonds and bank debt. RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects Moody's expectations that NESF's net fee income will continue to growth in the low to mid single digit while maintaining stable EBITDA margins, and Moody's adjusted debt to EBITDA will decrease to around 3.0x by the end of October 2026. The stable outlook also assume that NESF will largely fund its M&A activity from cash available on its balance sheet and would adhere to its financial policy of a net debt to EBITDA of 2.5x within 12 months from an acquisition. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The Ba3 CFR could be upgraded if NESF further improve its business profile, reducing as well the proportion of net fee income from the oil and gas segment below 50%, and demonstrate continued year on year growth while maintaining current level of profitability. An upgrade would also requires the company to maintain Moody's-adjusted leverage at or below 2.5x on a sustainable basis and to meet a Moody's adjusted Free Cash Flow to Debt in the double digit percentages. In addition an upgrade would require some strengthening of liquidity including reduced reliance on short-term facilities. The rating could be downgraded if the company's cash on balance sheet deteriorates to less than $60 million and Moody's-adjusted leverage increases above 3.5x on a sustainable basis. A rating downgrade could also occur if there is a deterioration in profitability (Moody's-adjusted EBITA margin), liquidity or the company engages in a large M&A transaction that is entirely debt funded. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in November 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 NESF is the bond issuer within the NES Fircroft Group. The NES Fircroft Group places skilled contract engineers and project managers with blue chip and multi-national clients globally, principally in the oil and gas industries and also in the power, chemicals and infrastructure sectors, including renewables. Founded in 1978, it has 85 offices across the globe and employs over 2,000 staff. The company operates across three main divisions (1) Contract Engineering – where NESF provides placement services of white-collar contractors needed for complex engineering projects; (2) Managed Solutions – where the company provides outsourced, exclusive global recruitment services, including recruitment process outsourcing; and (3) Permanent Placement – through which NESF provides permanent staffing services. For the 12 months that ended January 2025, the company recorded $3.1 billion of revenue and company-adjusted EBITDA of $144 million. WOW HYDRATE: Leonard Curtis Named as Administrators --------------------------------------------------- WOW Hydrate Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number: CR-2025-MAN-000932, and Andrew Poxon and Andrew Knowles of Leonard Curtis were appointed as administrators on June 30, 2025. WOW Hydrate engaged in the retail sale in non-specialised stores. The Company's registered office and principal trading address is at Create Business Hub, Ground Floor 5 Rayleigh Road, Hutton, Brentwood, Essex, CM13 1AB The joint administrators can be reached at: Andrew Knowles Andrew Poxon Leonard Curtis Riverside House, Irwell Street Manchester, M3 5EN For further details, contact: The Joint Administrators Tel No: 0161 831 9999 Email: recovery@leonardcurtis.co.uk Alternative contact: Avery Lewis ********* 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 * * *