250710.mbx

250710.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 Thursday, July 10, 2025, Vol. 26, No. 137 Headlines F R A N C E FINANCIERE VOLTA II: S&P Assigns 'B' LongTerm ICR, Outlook Stable NORIA 2025: Fitch Assigns 'B+(EXP)sf' Rating on Class F Notes G E O R G I A GEORGIA GLOBAL: Fitch Alters Outlook on 'BB-' IDR to Positive G E R M A N Y HSE FINANCE: Moody's Appends LD to PDR on Restructuring Completion I R E L A N D AVOCA CLO XIV: Fitch Assigns 'B-sf' Final Rating on Cl. F-R-R Notes BOSPHORUS CLO V: Fitch Affirms 'Bsf' Rating on Class F Notes MAN GLG V: Fitch Affirms B-sf Rating on Class F Debt I T A L Y LA DORIA: Fitch Assigns Rates New EUR675MM Secured Notes 'BB-' LA DORIA: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable OMNIA TECHNOLOGIES: Fitch Affirms 'B' LongTerm IDR, Outlook Stable P O L A N D DL INVEST: Fitch Assigns 'BB-' LongTerm IDR, Outlook Positive R O M A N I A ONIX ASIGURARI: A.M. Best Affirms B(Fair) Fin. Strength Rating U N I T E D K I N G D O M BISHOPSTROW COLLEGE: Grant Thornton Named as Administrators CARNIVAL PLC: Fitch Rates EUR1-Bil. Unsecured Notes Due 2031 'BB+' COGNITA: S&P Assigns 'B-' Rating on Term Loan Facilities DRAIN PEOPLE: Exigen Group Named as Administrators EG GROUP: Moody's Affirms 'B3' CFR & Alters Outlook to Positive GORDON NICOLSON: JT Maxwell Named as Administrators MAISON BIDCO: S&P Downgrades ICR to 'B' on Ongoing Margin Pressure NORTHERN REFRIGERATION: Leonard Curtis Named as Administrators PADWORTH COLLEGE: Grant Thornton Named as Administrators R3 IOT: AAB Business Named as Administrators WD FF LIMITED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable - - - - - =========== F R A N C E =========== FINANCIERE VOLTA II: S&P Assigns 'B' LongTerm ICR, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' long-term issuer credit rating to Financiere Volta II SAS and its 'B' issue rating to its EUR320 million senior TLB issued by Financiere Volta SAS. The recovery rating on the loan is '3', indicating our expectation of about 60% recovery in the event of a payment default. The stable outlook reflects our expectation that Lynxeo's operating performance will improve in the next 12 months, thanks to price increases with key customers and stronger demand conditions, sustaining adjusted EBITDA margins at about 10% and debt to EBITDA well below 5x from 2026 onward and representing sound rating headroom at the 'B' level. Private-equity firm Latour Capital closed the acquisition of specialty cable manufacturer Lynxeo, a spin-off from France-based cable-maker Nexans S.A., via its holding company Financiere Volta II SAS, in a leveraged buyout transaction. The EUR525 million transaction was funded by a EUR320 million term loan B (TLB), issued by Financiere Volta SAS, a fully owned financing subsidiary of Financiere Volta II, and a contribution from Latour Capital that S&P fully sees as equity-like. In addition, the company has about EUR40 million cash on hand at closing and access to a EUR70 million committed revolving credit facility (RCF). S&P said, "We anticipate that Lynxeo's pro forma S&P Global Ratings-adjusted EBITDA margin will remain resilient at about 8.6% in 2025 (8.4% in 2024), despite still-subdued demand conditions, mainly in the automation end market, and transaction costs (treated as expense in our adjusted EBITDA for 2025), before improving to more than 10% from 2026 onward thanks to lower one-off items, volume recovery in some core segments, and positive pricing effects on renegotiated contracts." The company's adjusted leverage is relatively conservative compared with similar transactions, with its S&P Global Ratings-adjusted debt to EBITDA expected to be below 4.0x by 2026 after 4.8x in 2025 pro forma. At the same time, S&P factors in its rating assignment the company's small size and limited diversity, a short track record of operating independently from Nexans, and potential movements in foreign exchange (FX) derivatives, which could lead to more volatile cash flow metrics. S&P said, "The 'B' rating reflects our expectation that Lynxeo will maintain leverage well below 5.0x in 2026 thanks to a rebound in sales and improved profitability. For 2025, we anticipate continued soft demand, due to a delayed recovery in the automation segment following an overall market downturn in 2024, and limited growth in the transport and energy (T&E) Asia-Pacific segment after a record year driven by high activity in the shipbuilding and oil and gas (O&G) markets in 2024. We project that 2025 sales will decline 3.2% to EUR848 million at current metal prices (or a 0.7% decline at constant metal prices and fixed perimeter excluding sales to Nexans), compared with a 4.6% decline in 2024 (or a 0.4% increase at constant metal prices and fixed perimeter excluding sales to Nexans). Overall, S&P Global Ratings-adjusted EBITDA this year should remain relatively resilient at EUR70 million-EUR75 million, broadly in line with 2024 levels, thanks to the company's efforts to further improve its customer mix, translating into an adjusted EBITDA margin of 8.6% (8.4% in 2024). This includes some transaction fees and one-off carve-out costs that we treat as expense in our adjusted EBITDA figure, and no negative FX effects. In 2026, we expect top-line expansion of 6.0%-6.5% will be supported by the anticipated upturn in the automation end market, as well as more favorable pricing terms on some key contracts. Along with lower one-off costs, we anticipate this will result in the adjusted EBITDA margin improving to 10%-11% in 2026. We project EBITDA expansion will enable material deleveraging, with adjusted debt to EBITDA expected at 3.7x at year-end 2026 (compared with 4.8x in 2025). "Our rating on Lynxeo is constrained by the group's private equity ownership. Although we forecast that adjusted leverage will be comfortably below 5x from 2026, which compares positively with other private equity-owned rated peers, we also factor into our assessment that the group is owned by a financial sponsor. We estimate the company will have considerable headroom against the financial covenant included in its senior facilities in 2026. We think this could leave headroom for higher debt depending on the financial sponsor's leverage tolerance, for which we do not yet have a track record, although we understand that it will target to maintain a prudent financial policy. We also think Lynxeo's position as a pure-play industrial cable manufacturer in a highly fragmented market presents acquisition opportunities, to expand the group's presence in other parts of the value chain or higher-growth end markets and regions. Therefore, we cannot rule out potential incremental debt." Although the industrial cables market is fragmented, Lynxeo holds relatively strong positions as a specialty cable manufacturer in its niche markets. The group is one of the top suppliers of specialty cables for rolling stock and railway applications in Europe and China, and for shipbuilding in South Korea. Lynxeo's products are essential for the operations of infrastructure equipment, as these cables underpin power delivery and data transmission, and therefore carry a high cost of operational failure despite generally representing less than 1% of the total equipment cost. The cables are often tailored to specific design requirements. This increases customer retention, as seen with the company's long-term contractual relationships with tenures of over 10 years with key customers, also serving as a barrier to entry. According to management, Lynxeo maintains a significant share of wallet with key equipment manufacturers across its target sectors. Nevertheless, it is a small-scale player compared with larger rated capital goods peers, and it operates within a highly fragmented industry despite its leading position in its niche markets. S&P said, "Our business risk assessment is therefore constrained by the company's narrower product portfolio than larger peers', consisting of a large range of specialty cables; some geographical concentration, as about 60% of the group's revenue in 2024 was from Europe (split across different countries), where we expect growth to remain more subdued than in other regions; and some customer concentration, with the top 10 accounting for about 40% of sales in 2024, comparing negatively with higher-rated peers." The mission-critical nature of Lynxeo's products and end-market diversity mitigates the group's exposure to cyclical industries. Lynxeo manufactures high-performance cables for diverse industrial applications. At the same time, the company derives about 60% of revenue from end markets sensitive to economic cycles and fluctuations in industrial activity, including railways, automation, shipbuilding, and aerospace, meaning that our forecasts include uncertainty. S&P said, "We think this is partially offset by the nondiscretionary and operationally critical role of industrial cables, which should translate into resilient demand. In addition, despite the cyclical nature of its core end markets, we expect diversification across uncorrelated sectors will limit earnings volatility. Increasing industrial electrification and automation, the transition to renewable energy, and an aging population driving health care needs should support long-term demand for Lynxeo." S&P said, "We anticipate the group will maintain relatively stable S&P Global Ratings-adjusted EBITDA margin of about 10% from 2026 onward. We anticipate that Lynxeo will benefit from the full effects of its contract renegotiations in 2026, so margins will materially improve to above 10% from 8.6% expected in 2025 (8.4% in 2024). We notably expect that Lynxeo will continue to achieve solid operating margins within its aerospace and medical division and in its T&E European division. This, coupled with an improved operating environment in the automation division, should play a key role in driving revenue and EBITDA expansion. The company makes use of automatic pass-through mechanisms for copper prices, thus fully neutralizing the impact of metal price fluctuations on the margins. At the same time, FX gains and losses could cause some margin volatility. We view FX gains and losses as operational and include it in our EBITDA calculation because they arise from FX derivatives used to hedge commercial transactions, including on copper volumes typically settled in U.S. dollars. "We expect Lynxeo's free operating cash flow (FOCF) to remain consistently positive from 2026, thanks to lower one-off expenses and improving profitability, although capital expenditure (capex) will remain relatively high over the next three years. In 2025, we forecast modestly negative FOCF, mainly constrained by nonrecurring expense, including IT-related capex, and a temporary working capital buildup of EUR30 million, driven by the one-off effect of shorter payment terms with Korean suppliers than in the historical period. The company absorbed the impact in early 2025 before the closing of Latour Capital's investment. For 2026, we anticipate that the company's FOCF will turn positive, supported by expanding margins and working capital needs moderating to about EUR15 million per year. Capex requirements will increase as the company plans to invest in production automation and in its IT transformation following the separation from Nexans, with estimated total IT-related capex amounting to EUR22.5 million over 2025-2027. Therefore, we project the capex-to-sales ratio will temporarily increase to 3%-4%, from 1.3% in 2024. "We treat the convertible bonds (CBs) subscribed by financial sponsor Latour Capital as equity-like, in application of our controlling shareholders financing criteria. This is because the CBs bear a payment-in-kind interest and have a maturity date later than that the senior debt. CB holders are subordinated in all rights to senior debt under the terms of the intercreditor and senior facilities agreements. The documentation of the CBs includes an early redemption clause for the CB holders, but this could only be exercised if Lynxeo is in a distressed or default-like situation (corporate filing or equivalent), or its capital structure is being refinanced (IPO, merger, or change in control). In both circumstances, we would fully reassess the issuer credit rating. Also, the senior facility agreement's permitted payments could result in a limited amount of cash returned to CB holders or any other junior creditors, equivalent to a maximum of EUR20 million or approximately 25% of covenant EBITDA (which we estimate could mean only up to EUR20 million-EUR30 million returned anytime). Permitted payments are also capped by a leverage test, with covenant net debt to EBITDA to remain below 2.75x in case of debt-funded payment or 3.25x in case of cash-funded distribution. As a result, we view limited risk of material releveraging from the CB terms and debt documentation. In addition to its contribution via the CB instruments, Latour Capital also provided common equity as part of the transaction. "The stable outlook reflects our expectation that Lynxeo's operating performance will improve in the next 12 months thanks to price increases with key customers and demand improvement sustaining S&P Global Ratings-adjusted margins at about 10% from 2026 onward. As a result, we expect that the group's S&P Global Ratings-adjusted debt to EBITDA ratio will improve well below 5x by 2026, and that its FOCF will remain consistently positive from 2026, while its funds from operations (FFO) cash interest coverage will remain materially above 2.5x." S&P could lower the rating if: -- Lynxeo's debt to EBITDA exceeds 5.5x with no prospect of swift recovery, due to weaker-than-anticipated operating performance related to either protracted market weaknesses or cost overruns, or in case of material debt-funded acquisitions or dividend distributions; -- FOCF turns negative with no prospect of rapid recovery; or -- FFO cash interest coverage deteriorates sustainably below 2x. S&P sees limited rating upside in the next two years considering the smaller scale and scope of Lynxeo than higher-rated peers. Nevertheless, S&P could raise the rating if: -- Lynxeo substantially improves its revenue base and end-market exposure while improving its margin and cash conversion profile, reaching a level comfortably in the low-teens under any market circumstances; -- Debt to EBITDA improves and remains consistently at around 4x under any market condition, supported by a commensurate financial policy and disciplined track record of low leverage; and -- Its FFO cash interest coverage remains sustainably above 3x. NORIA 2025: Fitch Assigns 'B+(EXP)sf' Rating on Class F Notes ------------------------------------------------------------- Fitch Ratings has assigned Noria 2025 expected ratings. The assignment of final ratings is contingent on the receipt of final documentations conforming to the information Fitch has received. Entity/Debt Rating ----------- ------ Noria 2025 Class A FR0014010T56 LT AAA(EXP)sf Expected Rating Class B FR0014010T07 LT AA(EXP)sf Expected Rating Class C FR0014010T15 LT A(EXP)sf Expected Rating Class D FR0014010SY5 LT BBB(EXP)sf Expected Rating Class E FR0014010SZ2 LT BB(EXP)sf Expected Rating Class F FR0014010T49 LT B+(EXP)sf Expected Rating Class G FR0014010T23 LT NR(EXP)sf Expected Rating Transaction Summary Noria 2025 is a 12-month revolving securitisation of French unsecured consumer loans originated in France by BNP Paribas Personal Finance (BNPP PF). The securitised portfolio will consist of personal, debt consolidation and sales finance loans granted to individuals. All loans will bear a fixed interest rate and amortise in constant instalments. KEY RATING DRIVERS Moderate Credit Risks: Fitch set a base-case default assumption of 4.7% and a recovery assumption of 45%, based on the performance of BNPP PF's book and its macroeconomic expectations. Fitch applied a 'AAAsf' default multiple of 5.1x and a recovery haircut close to 50% to stress base-case assumptions at the notes' ratings. Its assumptions and stresses are within the market average. Revolving Period Risks Addressed: The transaction will have a maximum 12-month revolving period. Early amortisation triggers are fairly loose, but the short revolving period, alongside eligibility criteria and available credit enhancement (CE), mitigates the risk introduced by the revolving period. Fitch has also analysed potential changes to portfolio composition during this period and stressed the portfolio's average interest rate. Hybrid Pro Rata Redemption: The notes are paid based on their target subordination ratios (as percentages of the performing and delinquent portfolio balance) during the amortisation period. The subordination ratio for each class is equal to its initial CE, which means all the notes will amortise pro rata if no sequential amortisation event occurs and there is no principal deficiency ledger in debit. Servicing Continuity Risk Mitigated: BNPP PF will be the transaction servicer. No back-up servicer will be appointed at closing. However, servicing continuity risks are mitigated by, among other things, a monthly transfer of borrowers' notification details, the use of a specially dedicated account bank, and a reserve fund to cover liquidity. In addition, the management company is responsible for appointing a substitute servicer within 30 calendar days in the event of a servicer termination. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Sensitivities to higher default rates and lower recoveries are shown below: Defaults increase by 25% Class A; 'AAsf'; Class B: 'Asf'; Class C: 'BBB+sf'; Class D: 'BBB-sf'; Class E: 'BB-sf'; Class F: 'Bsf' Recoveries decrease by 25% Class A; 'AA+sf'; Class B: 'AA-sf'; Class C: 'A-sf'; Class D: 'BBB-sf'; Class E: 'BBsf'; Class F: 'Bsf' Defaults increase by 25% and recoveries decrease by 25% Class A; 'AA-sf'; Class B: 'Asf'; Class C: 'BBBsf'; Class D: 'BB+sf'; Class E: 'B+sf'; Class F: 'CCCsf' Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Sensitivities to lower default rates and higher recoveries are shown below: Defaults decrease by 25% Class A; 'AAAsf'; Class B: 'AA+sf'; Class C: 'AA-sf'; Class D: 'A-sf'; Class E: 'BBBsf'; Class F: 'BB+sf' Recoveries increase by 25% Class A; 'AAAsf'; Class B: 'AAsf'; Class C: 'Asf'; Class D: 'BBB+sf'; Class E: 'BBB-sf'; Class F: 'BBsf' Defaults decrease by 25% and recoveries increase by 25% Class A; 'AAAsf'; Class B: 'AA+sf'; Class C: 'AA-sf'; Class D: 'Asf'; Class E: 'BBB+sf'; Class F: 'BBB-sf' 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 reviewed the results of a third-party assessment conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis. Fitch conducted a review of a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. ============= G E O R G I A ============= GEORGIA GLOBAL: Fitch Alters Outlook on 'BB-' IDR to Positive ------------------------------------------------------------- Fitch Ratings has revised Georgia Global Utilities JSC's (GGU) Outlook to Positive from Stable and affirmed Long-Term Issuer Default Rating (IDR) at 'BB-'. The revision of the Outlook reflects positive pressure on GGU's 'b+' Standalone Credit Profile (SCP) at 'b+', due to moderate funds from operations (FFO) net leverage for the 2025-2027 regulatory period, comfortable liquidity and an FFO interest coverage of around 3.0x following its bond refinancing in July 2024. Additional visibility on a constructive upcoming regulatory period for water activities starting in 2027 could lead to an upgrade of the IDR. The 'BB-' IDR reflects a one-notch uplift from GGU's SCP, which underlines shareholder FCC Aqualia S.A.'s (BBB-/Stable) perceived strategic incentive to support its weaker subsidiary. Key Rating Drivers Strong SCP: Fitch anticipates GGU's FFO net leverage to average slightly below its positive sensitivity of 3.5x in 2025-2027, representing a moderate increase from 3.0x in 2024, and project interest coverage to remain sound at 2.9x-3.2x. This reflects a significant rationalisation of investments for 2025-2027, with average annual capex reduced to GEL165 million from the previously expected GEL210 million. Fitch forecasts pre-dividend free cash flow (FCF) to be negative at GEL75 million over 2025-2027. However, Fitch forecasts large dividend distributions from 2027 up to the 3.5x net debt documented covenant under its base case. Robust Business Profile: GGU's business mix remains fairly defensive, with regulated water supply and wastewater services accounting for about 85% of group revenues, supported by tariff visibility until end-2026, its natural monopolistic position in Tbilisi, and direct ownership of the water and wastewater infrastructure. The remaining business relates to the generation and sale of electricity, with an installed capacity of 149MW. About 40% of GGU's electricity is generated for the group's own consumption, while excess electricity is sold predominantly through 12-month bilateral agreements with industrial customers. Regulated water distribution carries no volume or price risk and is well protected against inflation and interest-rate risks, even though regulatory adjustments are delayed to the next regulatory period and the risk of political intervention in the subsector. Hydroelectric generation, in both current and anticipated market configurations, will continue to bear price and volume risks — primarily related to the availability of water — though this is mitigated by the operational adaptability of the Zhinvali reservoir. Unchanged Strategy: GGU's investment strategy continues to focus on refurbishing its water network infrastructure (to reduce leaks), modernising pumping stations (to achieve energy savings and increase electricity sold to customers), and improving metering and fraud detection. The liberalisation of electricity markets in Georgia, including balancing and ancillary services markets, and the related adoption of daily margin pricing are opportunities for GGU to achieve higher electricity prices, further offsetting FX risk. However, neither these developments nor a full regulatory allowed tariff increase for households are included in its assumptions for prudence. Manageable FX Risk: GGU effectively mitigates FX risk on its financial debt and interest charges resulting from the US dollar appreciation against the Georgian lari by holding USD24 million of its own notes and maintaining substantial short-term bank deposits denominated in US dollars (USD64 million held at end-May). In addition, the natural hedge provided by dollar-denominated electricity revenues should cover 50%-60% of interest payments, based on its estimates. Fitch does not expect moderate US dollar appreciation to undermine GGU's financial profile, even though its US dollar reserves will be progressively deployed over 2025-2027 for investments. Ring-Fenced Bond Structure: GGU's USD300 million bond includes restrictive covenants, and Fitch's rating approach treats GGU as a non-recourse subsidiary for Aqualia, notwithstanding an expected full minority buyout. Noteholders benefit from restricted payment and debt incurrence tests. In particular, the restricted group may make aggregate restricted payments of up to 50% of consolidated net income, provided the issuer meets the debt incurrence test, among other conditions. The restricted group may incur additional debt if consolidated net leverage is less than 3.5x and may also make unlimited restricted payments if consolidated net leverage does not exceed 2.5x. Strategic Links with Aqualia: The rating uplift reflects its view that Aqualia has a 'Medium' strategic incentive to support GGU, while Fitch assesses legal and operational incentives to support as 'Low'. Fitch considers the financial contribution from GGU to the Aqualia group as reasonable, at about 14% of consolidated EBITDA and up to 20% of the investment plan. GGU's business is also aligned with Aqualia's core water and sewage management expertise. In its view, GGU offers moderate growth potential for Aqualia, given the subsidiary's need to modernise its water infrastructure, narrow significant water losses, and lower its own electricity consumption. Peer Analysis A close peer of GGU is ENERGO-Pro a.s. (EPas, BB-/Negative), a utility headquartered in the Czech Republic with operating companies in Bulgaria, Georgia, Spain and Turkiye. Its core activities are power distribution, grid support services and electricity generation. ENERGO-Pro's higher debt capacity than GGU's reflects its larger size and its diversification by geography and type of business. Other peers for GGU in the CIS regions are the Uzbekistan-based distribution and supply company, Regional Electrical Power Networks JSC (IDR BB/Stable, SCP: ccc). The latter has a larger asset base and greater geographical coverage than GGU, but this is more than offset by GGU's more established regulated asset base framework, driving the difference between their SCPs, alongside the Uzbek company's weak liquidity. Its IDR is aligned with Uzbekistan's due to the state's 'Very Strong' decision-making and oversight and precedents of support and 'Strong' preservation of government policy role. Key Assumptions - Regulatory allowed revenue of the water utility business increasing by a conservative 10% in the 2027-2029 regulatory period compared with the 2024-2026 regulatory period, without fully factoring in regulatory provisions - Energy production of 400GWh annually, of which around 240GWh sold externally; electricity price to rise GEL17/KWh in 2027, from GEL14/KWh in 2024, without factoring in the eventual benefit from market liberalisation - EBITDA margin on average at 68% during 2025-2027 - Capex averaging GEL165 million a year over 2025-2027 - No dividend distributions in 2024-2026. Dividends of GEL144 million assumed by Fitch in 2027 while adhering to the 3.5x net debt /EBITDA bond covenant - Georgian lari/US dollar annual average exchange rate of 2.9 in 2025 and 2.99 in 2026 and 2027 RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade is unlikely given the Positive Outlook, unless Aqualia's incentives to support GGU are reassessed as 'Low', which would lead Fitch to rate GGU on a standalone basis and result in a downgrade of its IDR. - The Outlook would be revised to Stable if Fitch lacks visibility on a supportive regulatory framework for 2027-2029, or if there is a sustained decline in profitability and cash flow (e.g., persistent water losses or weaker cash collection), leading to FFO net leverage (excluding connection fees) above 3.5x. on a sustained basis Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Mainteinance of FFO net leverage (excluding connection fees) sustainably below 3.5x, accompanied by a coherent financial policy - Improved visibility around supportive regulatory evolution and material improvement in asset quality (i.e. significantly smaller network losses or lower own electricity consumption) - Stronger links with Aqualia Liquidity and Debt Structure At end-2024, GGU's cash and cash equivalent totalled GEL219 million, of which GEL169 million is held in short-term deposits at Georgian banks. This would mostly cover negligible debt maturities in 2025-2027 and cumulative negative FCF of GEL220 million expected in the next three years. Issuer Profile GGU is a water utility and renewable energy business that supplies potable water and provides wastewater collection and processing services to about 1.3 million people in Georgia. More than half of the electricity generated by GGU is sold to third parties, with the rest used by its water supply and sanitation services business to power its water distribution network. 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 GGU has an ESG Relevance Score of '4' for Water & Wastewater Management due to heavily worn-out water infrastructure and large water losses, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Georgia Global Utilities JSC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- ============= G E R M A N Y ============= HSE FINANCE: Moody's Appends LD to PDR on Restructuring Completion ------------------------------------------------------------------ Moody's Ratings has appended a limited default (LD) designation to HSE Finance S.a r.l. (HSE or the company)'s probability of default rating, revising it to Caa3-PD/LD from Caa3-PD. There is no change to the company's Caa3 corporate family rating or the Caa3 ratings on its backed senior secured debt instruments. The negative outlook is unaffected. RATINGS RATIONALE On July 3, 2025, HSE announced the completion of the restructuring of its capital structure. Of the total pre-restructuring debt of EUR630 million, EUR340 million has been reinstated as operating company debt and the maturity has been extended to October 2029. Of the remaining EUR290 million, EUR192 million has been converted to payment in kind (PIK) notes at the holding company level, while the remaining EUR98 million has been converted to equity like instruments. Moody's classify this transaction as a distressed exchange, an event of default under Moody's definitions, which is reflected in the LD designation. Headquartered in Ismaning, Germany, HSE is a multichannel home shopping operator that offers a wide range of own, exclusive and third-party brand products on its TV platform, online, via smartphone and tablet applications, and through smart TV. For the last twelve months ending March 31, 2025, HSE generated revenue of EUR619 million and Moody's adjusted EBITDA of EUR65 million. HSE has been owned by the private-equity firm Providence Equity Partners since 2012. ============= I R E L A N D ============= AVOCA CLO XIV: Fitch Assigns 'B-sf' Final Rating on Cl. F-R-R Notes ------------------------------------------------------------------- Fitch Ratings has assigned Avoca CLO XIV DAC final ratings. Entity/Debt Rating Prior ----------- ------ ----- Avoca CLO XIV DAC A Loan LT AAAsf New Rating A-R-R XS3076935009 LT AAAsf New Rating AAA(EXP)sf B-1-R-R XS3076935264 LT AAsf New Rating AA(EXP)sf B-2-R-R XS3076935421 LT AAsf New Rating AA(EXP)sf C-R-R XS3076935348 LT Asf New Rating A(EXP)sf D-R-R XS3076935694 LT BBB-sf New Rating BBB-(EXP)sf E-R-R XS3076935850 LT BB-sf New Rating BB-(EXP)sf F-R-R XS3076935777 LT B-sf New Rating B-(EXP)sf Sub Notes XS1235911192 LT NRsf New Rating NR(EXP)sf X-R XS3076935181 LT AAAsf New Rating AAA(EXP)sf Transaction Summary Avoca CLO XIV DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine and second-lien loans and high-yield bonds. All except the subordinated notes were refinanced, with the remaining proceeds invested in additional assets until the target par amount is reached. The portfolio is actively managed by KKR Credit Advisors (Ireland) Unlimited Company. The collateralised loan obligation (CLO) has a 4.5-year reinvestment period and an 8.5-year weighted average life test (WAL) at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-weighted average rating factor (WARF) of the identified portfolio is 25.1. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. The recovery prospects for these assets are more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate of the identified portfolio is 60.9%. Diversified Asset Portfolio (Positive): The transaction has a concentration limit for the 10 largest obligors at 20%. The deal also includes other concentration limits, including a maximum exposure of 40% to the three largest Fitch-defined industries in the portfolio. These covenants ensure the portfolio will not be excessively concentrated. Portfolio Management (Neutral): The transaction has two matrices effective at closing and two that are effective 18 months after closing, all with fixed-rate limits of 0% and 10%. All four matrices are based on a Top 10 obligor concentration limit of 20%. The closing matrices correspond to an 8.5-year WAL test, while the forward matrices correspond to a seven-year WAL test. The deal has a reinvestment period of about 4.5 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 deal structure against its covenants and portfolio guidelines. Cash-flow Modelling (Positive): The WAL for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged after the reinvestment period. These include passing the coverage tests and Fitch 'CCC' limit after the reinvestment period, and a WAL covenant that progressively steps down, before and after the end of the reinvestment period. These conditions would reduce the effective risk horizon of the portfolio during periods of stress. 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 rating levels in the current portfolio would have no impact on the class X-R to A-R-R notes, lead to downgrades of up to two notches for the class B-1-R-R to E-R-R notes and to below 'B-sf' for the class F-R-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-R, D-R-R, E-R-R and F-R-R notes have a rating cushion of two notches, and the class C-R-R notes have a cushion of one notch. 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 for the class B-1-R-R to D-R-R debt, three notches for the class A-R-R notes and to below 'B-sf' for the class E-R-R and F-R-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 Fitch-stressed portfolio would result in upgrades of up to four notches for all notes, except for the 'AAAsf' rated notes, which are at the highest level on Fitch's scale and cannot be upgraded. 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 The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and other Nationally Recognised Statistical Rating Organisations and European Securities and Markets Authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and 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, its 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 Avoca CLO XIV 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. BOSPHORUS CLO V: Fitch Affirms 'Bsf' Rating on Class F Notes ------------------------------------------------------------ Fitch Ratings has upgraded Bosphorus CLO V DAC's class B-1 and B-2 notes and affirmed the rest. Fitch has also revised the class C notes' Outlook to Positive from Stable. Entity/Debt Rating Prior ----------- ------ ----- Bosphorus CLO V DAC A-1 XS2073812336 LT AAAsf Affirmed AAAsf A-2 XS2082334249 LT AAAsf Affirmed AAAsf B-1 XS2073813060 LT AAAsf Upgrade AA+sf B-2 XS2073813730 LT AAAsf Upgrade AA+sf C XS2073814381 LT A+sf Affirmed A+sf D XS2073814977 LT BBB+sf Affirmed BBB+sf E XS2073816162 LT BB+sf Affirmed BB+sf F XS2073816329 LT Bsf Affirmed Bsf Transaction Summary Bosphorus CLO V DAC is a cash flow CLO comprising senior secured obligations. The transaction is actively managed by Cross Ocean Adviser LLP and exited its reinvestment period in June 2024. KEY RATING DRIVERS Amortisation Benefits Senior Notes: The transaction has started to deleverage and the class A-1 and A-2 notes have been paid down by EUR86.7 million jointly since the last review in August 2024. The amortisation has resulted in an increase in credit enhancement for the notes and therefore the upgrade of the class B-1 and B-2 notes, even though the portfolio is currently 1.8% below par (calculated as the current par difference over the original target par). Cushions Support Stable Outlooks: All notes have comfortable default-rate buffers to support their ratings and should be capable of absorbing further defaults in the portfolio. The notes have sufficient credit protection to withstand deterioration in the credit quality of the portfolio at their ratings. Mild Deterioration; Limited Refinancing Risk: The portfolio has deteriorated mildly since the last review. The transaction was failing the weighted average life (WAL) test and Fitch weighted average rating factor (WARF) test, according to the trustee report as of June 2025. Exposure to assets with a Fitch-derived rating of 'CCC+' and below was 7.4%, versus a limit of 7.5%. The transaction has limited near- and medium-term refinancing risk with no assets maturing in 2025 and 4.3% of assets maturing in 2026. Transaction Out of Reinvestment Period: The transaction exited its reinvestment period in June 2024 and has not reinvested since September 2024. Fitch based the upgrade analysis on the current portfolio, which Fitch stressed by downgrading any obligor with a Negative Outlook by one notch, with a floor of 'CCC-', and flooring the portfolio's WAL at four years, assuming the transaction will not reinvest. However, the WAL test was in compliance at the end of the reinvestment period, according to the manager, and thus the transaction may be eligible for reinvestment again. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the transaction's underlying obligors at 'B'/'B-'. The WARF, as calculated by Fitch under its latest criteria, is 25.3. High Recovery Expectations: The portfolio comprises 100% senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The weighted average recovery rate, as calculated by Fitch, is 62.2%. Less Diversified Portfolio: The portfolio becomes more concentrated as it deleverages. The top 10 obligor concentration is 26%, versus a limit of 20%. The largest obligor represents 3% of the portfolio balance and exposure to the three largest Fitch-defined industries is 25.7%, under Fitch's calculations. Fixed-rate assets reported by the trustee were at 2.4% of the portfolio balance, versus a limit of 7.5%. Cash Flow Analysis: Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par-value and interest-coverage tests. Deviation from Model-Implied Rating: The class C notes are three notches below their model-implied rating (MIR) due to the uncertainty over whether the transaction will reinvest again. Fitch will upgrade the class C notes if they continue to deleverage and the portfolio does not become excessively concentrated. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades, which are based on the current portfolio, may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. 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 Bosphorus 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. MAN GLG V: Fitch Affirms B-sf Rating on Class F Debt ---------------------------------------------------- Fitch Ratings has upgraded Man GLG Euro CLO V DAC's class B-1 to B-3 notes and revised the class F notes' Outlook to Negative from Stable. Entity/Debt Rating Prior ----------- ------ ----- Man GLG Euro CLO V DAC A-1-R XS2313671526 LT AAAsf Affirmed AAAsf A-2-R XS2313672250 LT AAAsf Affirmed AAAsf B-1 XS1881728221 LT AAAsf Upgrade AA+sf B-2-R XS2313672334 LT AAAsf Upgrade AA+sf B-3 XS1885673399 LT AAAsf Upgrade AA+sf C-1 XS1881728908 LT A+sf Affirmed A+sf C-2-R XS2313673142 LT A+sf Affirmed A+sf C-3 XS1885673985 LT A+sf Affirmed A+sf D-1 XS1881729203 LT BBB+sf Affirmed BBB+sf D-2-R XS2313672680 LT BBB+sf Affirmed BBB+sf E XS1881732256 LT BB+sf Affirmed BB+sf F XS1881732330 LT B-sf Affirmed B-sf Transaction Summary Man GLG Euro CLO V DAC is a cash flow CLO comprising mostly senior secured obligations. The transaction is actively managed by GLG Partners LP and exited its reinvestment period in December 2022. KEY RATING DRIVERS Deleveraging Increases Senior Notes Buffer: The class A-1-R notes have repaid EUR35.1 million, resulting in an increase in credit enhancement (CE) of 3.3% for the class B-1 to B-3 notes, to 33.9% currently from 30.6% in the January 2025 review. The transaction's deleveraging has resulted in an increased default-rate cushion for the senior notes, which can absorb further defaults in the portfolio. This supports the upgrades of the class B-1 to B-3 notes. Par Erosion Weakens Junior OC: The transaction is currently 4.4% below par (calculated as the current par difference over the original target par) and has EUR7.1 million of defaulted assets. It has incurred par losses on sales since the last review, which has reduced the default-rate cushion for the junior notes. The class F par value test ratio has declined to 103.1% from 103.2%. The transaction was breaching its Fitch weighted average recovery rating, weighted average rating factor (WARF) tests and its weighted average life (WAL) test, according to the last trustee report of 4 June 2025. Exposure to assets with a Fitch-derived rating of 'CCC+' and below is 7.2%, according to the trustee report, up from 5.8% in January, but below the limit of 7.5%. The Negative Outlook on the class F notes reflects the par losses and the resulting thin cushion on their par value test. These same factors also underline the continuing Negative Outlook for the class E notes. Available CE is still sufficient to maintain the current ratings on both class E and F notes. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The WARF of the current portfolio is 27, as calculated by Fitch under its latest criteria. High Recovery Expectations: Senior secured obligations comprise 98.7% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the current portfolio is 58.9%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 17.9%, and no obligor represents more than 2% of the portfolio balance. Exposure to the three-largest Fitch-defined industries is 35.4% as calculated by the trustee. Fixed-rate assets, as reported by the trustee, are at the 10% ceiling. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in December 2022. However, the manager can continue to reinvest unscheduled principal proceeds and sale proceeds from credit-risk obligations after the end of the reinvestment period, subject to compliance with the reinvestment criteria. The transaction is currently failing the WARF and Caa tests of another rating agency which limit reinvestment, but the manager may resume trading after asset sales or positive credit migration. Given the possibility of reinvestment, its upgrade analysis was based on a stressed portfolio, by testing Fitch-calculated WARF, Fitch-calculated WARR, weighted average spread (WAS) and fixed-rate asset share to their covenanted limits, and assuming a four-year floor for the WAL. Fitch also applied a 1.5% haircut to the WARR covenanted limits specified in the Fitch collateral quality test matrices, as the calculation of the WARR in the transaction documentation is not in line with the agency's latest CLO Criteria and could result in an inflated WARR compared with the current criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades, which are based on the current portfolio, may occur if loss expectations are larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher CE 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 Man GLG Euro 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. ========= I T A L Y ========= LA DORIA: Fitch Assigns Rates New EUR675MM Secured Notes 'BB-' -------------------------------------------------------------- Fitch Ratings has assigned La Doria S.p.A.'s new five-year EUR675 million senior secured notes a final instrument rating of 'BB-' with a Recovery Rating of 'RR3'. The final rating is in line with the expected rating assigned on 30 June 2025, as the pricing of the instruments and the final documentation largely conform with the information already received. La Doria's 'B+' Long-Term Issuer Default Rating (IDR) reflects its niche scale and concentrated retail customer base, which is mitigated by its longstanding customer relationships and adequate operating profitability for a private-label food-processing company. The Stable Outlook reflects its expectations of sustained EBITDA growth, driven mostly by product premiumisation and margin-accretive acquisitions, alongside credit metrics that align with a higher rating from end-2025. It also reflects its expectations of consistently positive free cash flow (FCF) generation, limited execution risk and adherence to a consistent financial policy that is conducive to maintaining EBITDA gross leverage below 5.0x. Key Rating Drivers Rating-Neutral Refinancing: Fitch views the increased issue of EUR675 million floating-rate senior secured notes as credit neutral to La Doria. This is because most of its proceeds are being used to repay the company's existing EUR650 million 2029 senior secured notes. The refinancing includes an amend-and-extend of its super senior revolving credit facility (RCF) to EUR122.5 million. Stabilising Operating Margins: La Doria's ability to improve profitability is critical to its rating. Fitch anticipates EBITDA margins will remain slightly below 12% in 2025-2026, in line with its performance in 2023-2024. This should be followed by a rise above 12% to 2028, driven by changes to the product mix, alongside premiumisation, efficiency initiatives and renegotiated contract terms reducing the lag between input and output prices, limiting EBITDA margin volatility. Moderate Leverage: Fitch expects La Doria's leverage to stay below 5.0x and EBITDA interest cover well above 3.0x, after refinancing. The metrics will be supported by stable profitability and margin accretion following the integration of the recently acquired Pastificio Lensi and Fege. Fitch expects these additions to add 20bp-25bp to La Doria's profitability in 2025 and 2026. Positive FCF: Fitch forecasts that La Doria will generate sustainably positive FCF margins of 2.5%-4%, except in 2025, when it will be 0.8% as capex will be higher at 3% of sales. The group's credit profile benefits from its ability to generate FCF due to its strong profitability for the rating category, contained working-capital outflows and modest capex intensity. The newly issued notes will reduce debt service costs, reinforcing the positive FCF profile. Shareholder Distributions Possible: The group's approach to acquisitions is opportunistic, and Fitch expects any new acquisitions to be modest, limiting integration and execution risks. Fitch expects the group to use its rising cash balances for shareholder distributions, subject to compliance with financial documentation. Slow Cost Pass-Through: La Doria benefits from its costs mainly being variable. Its supplier base is fairly diversified, with the top five suppliers accounting for around 18% of cost of goods sold. Tomato sourcing is strong due to framework agreements with several producers, but pulses suppliers are more concentrated. However, the company is exposed to fluctuations in the price and yield of tomatoes and other commodities, with slow cost pass-through of up to a year. This may affect profitability in low-yielding seasons or at times of geopolitical tension. Fitch expects the gap between input and output prices to reduce as sales contracts are renegotiated, enhancing margin stability. Currency Exchange Risk: La Doria's operations are exposed to FX risks. Its financial liabilities are denominated in euros, as are most of its expenses, while sourcing costs are in euros and US dollars, and about two-thirds of its turnover is in foreign currencies, mainly sterling. This increases its risk of FX-related profitability volatility. The group has a hedging policy based on forward-rate agreements. However, this results in certain FX-driven earnings and cash flow volatility. Niche Product, Concentrated Customers: La Doria's ratings are constrained to the 'B' rating category by its niche position in food processing and modest business scale. It has a highly concentrated customer base, with its top 10 clients representing about 46% of revenue. However, this is mitigated by La Doria's longstanding customer relationships and no contract cancellations, backed by its logistic and production capabilities. The group's margins of above 10% are high for the rating, underscoring its attractive product offering, even though its customers have stronger bargaining power. Peer Analysis La Doria compares well with a number of consumer, food and beverage leveraged buyouts in Fitch's public and private ratings coverage. Sigma Holdco BV (B/Stable) has a materially larger scale, greater geographic diversification and higher margins, due to its branded portfolio and a different cost base. Fitch allows Sigma a higher debt capacity, even though it is mainly focused on a single offering that is experiencing secular difficulties. Nomad Foods Limited (BB/Stable), which is strong in branded and private-label frozen food, is larger and has stronger profitability. Nomad's leverage is also lower, justifying its larger debt capacity and higher rating. Flamingo Group International Limited (B-/Positive) operates in a highly fragmented, agriculture-like floriculture market with a concentrated customer base and limited expected FCF generation. It is smaller than La Doria, with limited diversification across geographical locations and its product portfolio. It also faces seasonality and is vulnerable to weather conditions. Sammontana Italia S.p.A. (B+/Stable), which is rated at the same level as La Doria, has comparable credit metrics and similar scale, but a slightly stronger business profile due to its wider product offering, stronger brand awareness and lower customer concentration. Its profits are also less exposed to the volatility of input prices than La Doria's. These aspects are partly offset by La Doria's lower execution risks as Sammontana is pursuing market consolidation and expansion, including in overseas markets. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth of 8.6% in 2025 and 10.2% in 2026, due mainly to acquisitions, followed by normalisation to 5.5% until 2028 - EBITDA margin at 11.7%-12.2% over 2025-2028 - Capex at EUR40 million in 2025, before normalising to about EUR30 million a year to 2028 - FCF margins at 0.8% in 2025 before normalising towards 4% to 2028 - M&A of EUR111 million in 2025 and slightly above EUR33 million a year to 2028, funded by the FCF and readily available cash - No dividends Recovery Analysis Its recovery analysis assumed that La Doria will be considered a going concern in bankruptcy, and that it would be reorganised rather than liquidated. This is because most of its value lies within its client-and-supplier relationships and production and logistic capabilities. Fitch assumed a 10% administrative claim. Fitch assessed going concern EBITDA at EUR115 million, after corrective measures and a restructuring of La Doria's capital structure that allow it to retain a viable business model. Loss of customer contracts, materials-sourcing challenges and difficulties in passing on its input costs may drive financial distress, leading to a restructuring that may result in its capital structure becoming untenable. Fitch applied a recovery multiple of 5.0x, which is the mid-range for packaged food companies in EMEA. Fitch assumed the increased RCF of EUR122.5 million (previously EUR112.5 million) is fully drawn on default. The RCF ranks super senior, ahead of the senior secured notes. Fitch expects La Doria's existing receivables factoring facilities of about EUR152 million to remain available during and after distress without requiring alternative funding, although it may be available at a reduced amount. This assumption is driven by the strong credit quality of the group's client base. Its waterfall analysis generated a ranked recovery for the senior secured noteholders in the 'RR3' category, leading to a 'BB-' instrument rating, one notch above the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Increase in EBITDA gross leverage to above 5x, due to lower profitability or debt-funded acquisitions - EBITDA margin below 12%, resulting in lower FCF margins at below 2% - EBITDA interest coverage weakening towards 3.0x or below Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch does not envisage an upgrade to the 'BB' rating category unless the group achieves: - Wider scale and broadens diversification across geographies, and product premiumisation supports EBITDA growth to EUR300 million - Higher EBITDA margin supporting FCF margin at above 3% - EBITDA gross leverage consistently below 4x, driven by organic expansion, integration of bolt-on targets or gross debt prepayment, and EBITDA interest coverage above 4x for an extended period Liquidity and Debt Structure Fitch forecasts La Doria's available cash balance at around EUR40 million at end-2025. Stable operating performance with minimal working-capital outflows and limited capex should support positive FCF before acquisitions of EUR111 million in 2025 and EUR33 million a year (Fitch assumptions) in 2026-2028. La Doria will also have access to the fully undrawn increased RCF of EUR122.5 million. It has no major debt maturing before 2030, when the new senior secured notes of EUR675 million come due. Issuer Profile La Doria is an Italian manufacturer of private-label tomato, vegetable and fruit derivatives, including sauces, soups, dressings, purees and juices. Date of Relevant Committee 24 June 2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- La Doria S.p.A. senior secured LT BB- New Rating RR3 BB-(EXP) LA DORIA: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable ---------------------------------------------------------- Fitch Ratings has upgraded La Doria S.p.A.'s Long-Term Issuer Default Rating (IDR) to 'B+', from 'B', and its senior secured debt to 'BB-', from 'B+'. The Outlook is Stable. Fitch has assigned La Doria's planned EUR675 million senior secured debt issue an expected rating of 'BB-(EXP)'. The Recovery Rating on its senior secured debt ratings is 'RR3'. Proceeds from the new notes will redeem existing EUR650 million notes due 2029. The final debt rating is subject to completion and final documentation conforming to draft terms. The upgrade reflects Fitch's expectations of sustained EBITDA growth, driven mostly by product premiumisation and margin-accretive acquisitions, alongside credit metrics that align with a higher rating from end-2025. It also reflects its expectations of consistently positive free cash flow (FCF) generation, limited execution risk and adherence to a consistent financial policy conducive to maintaining EBITDA gross leverage below 5.0x. Key Rating Drivers Rating-Neutral Refinancing: La Doria plans to refinance its EUR650 million 2029 senior secured notes with the new senior secured EUR675 million notes with maturity 2030. The refinancing includes an amend and extend of its super senior revolving credit facility (RCF) to EUR122.5 million. The transaction is ratings neutral and will lead to lower debt service costs, supporting the group's FCF. Steadying Operating Margins: La Doria's ability to improve profitability is critical. Fitch anticipates EBITDA margins will remain marginally below 12% in 2025-2026, in line with its performance in 2023-2024. This should be followed by a rise above 12% to 2028, driven by changes to the product mix alongside premiumisation, efficiency initiatives and renegotiated contract terms reducing the lag between input and output prices, limiting EBITDA margin volatility. Credit Metrics Support Upgrade: The upgrade reflects its expectations that La Doria's credit metrics will align with a higher rating from end-2025, with leverage below 5.0x and EBITDA interest cover far above 3.0x. The metrics will be supported by stable profitability and margin accretion following the integration of recently acquired Pastificio Lensi and Fege. Fitch expects these additions to add 20bp-25bp to La Doria's profitability in 2025 and 2026. Positive FCF: Fitch forecasts that La Doria will generate sustainably positive FCF margins of 2%-3.5%, except in 2025, when it will be 0.8% as capex will be higher at 3% of sales. The group's credit profile benefits from its ability to generate FCF due to its strong profitability for the rating category, contained working capital outflows and modest capex intensity. The proposed notes will reduce debt service costs, reinforcing the positive FCF profile. Shareholder Distributions Possible: The group's approach to acquisitions is opportunistic, and Fitch expects any new buys to be modest, limiting integration and execution risks. Fitch expects the group to use its rising cash balances for shareholder distributions, subject to compliance with financial documentation. Slow Cost Pass-Through: La Doria benefits from its costs mainly being variable. Its supplier base is fairly diversified, with the top five suppliers accounting for around 18% of cost of goods sold. Its tomato sourcing is strong due to framework agreements with several producers, while pulses suppliers are more concentrated. However, it is exposed to fluctuations in the price and yield of tomatoes and other commodities, with slow cost pass-through of up to a year. This may affect its profitability in low yielding seasons or at times of geopolitical tension. Fitch expect the gap between input and output prices to reduce as sales contracts are renegotiated, enhancing margin stability. Currency Exchange Risk: La Doria's operations are exposed to FX risks. Its financial liabilities are denominated in euros, as are most of its expenses, while sourcing costs are in euros and US dollars, and about two thirds of its turnover is in foreign currencies, mainly sterling. This increases its risk of FX-related profitability volatility. The group has a hedging policy in place based on forward-rate agreements. However, this results in certain FX-driven earnings and cash flow volatility. Niche Product, Concentrated Customers: La Doria's ratings are constrained to the 'B' rating category by its niche position in food processing and modest business scale. It has a highly concentrated customer base, with its top 10 clients representing about 46%of revenue. However, this is partly mitigated by La Doria's longstanding customer relationships and no contract cancellations, backed by its logistic and production capabilities. The group's margins of above 10% are high for the rating, underscoring its attractive product offering, even though its customers have stronger bargaining power. Peer Analysis La Doria compares well with a number of consumer, food and beverage leveraged buyouts in Fitch's public and private ratings coverage. Sigma Holdco BV (B/Stable) has a materially larger scale, greater geographic diversification and higher margins, due to its branded portfolio and a different cost base. Fitch allows Sigma a higher debt capacity, even though it is mainly focused on a single offering that is experiencing secular difficulties. Nomad Foods Limited (BB/Stable), which is strong in branded and private-label frozen food, has a stronger business profile in scale and profitability. Nomad's leverage is also lower, justifying its larger debt capacity and higher rating. Flamingo Group International Limited (B-/Positive) operates in a highly fragmented, agriculture-like floriculture market with a concentrated customer base and limited expected FCF generation. It is smaller than La Doria, with limited diversification across geographical locations and its product portfolio. It also faces seasonality and is vulnerable to weather conditions. Sammontana Italia S.p.A. (B+/Stable), which is rated at the same level as La Doria, has comparable credit metrics and similar scale, but a slightly stronger business profile due to its wider product offering, stronger brand awareness and lower customer concentration. Its profits are also less exposed to volatility of input prices than La Doria. These aspects are partly compensated for by La Doria's lower execution risks as Sammontana is pursuing a market consolidation and expansion strategy, including in overseas markets. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth of 8.6% in 2025 and 10.2% in 2026, due mainly to acquisitions, followed by a normalisation to 5.5% until 2028 - EBITDA margin at 11.7%-12.2% over 2025-2028 - Capex at EUR40 million in 2025, before normalising to around EUR30 million a year to 2028 - FCF margins at 0.8% in 2025 before normalising towards 3.5% to 2028 - M&A of EUR111 million in 2025 and slightly above EUR33 million a year to 2028, funded by the FCF and readily available cash - No dividends Recovery Analysis Its recovery analysis assumes that La Doria will be considered a going concern in bankruptcy, and that it would be reorganised rather than liquidated. This is because most of its value lies within its client-and-supplier relationships and production and logistic capabilities. Fitch assumed a 10% administrative claim. Fitch assessed going concern EBITDA at EUR115 million, after corrective measures and a restructuring of La Doria's capital structure that allow it to retain a viable business model. Loss of customer contracts, materials-sourcing challenges and difficulties in passing on its input costs may drive financial distress, leading to a restructuring that may result in its capital structure becoming untenable. Fitch applied a recovery multiple of 5.0x, which is the mid-range for packaged food companies in EMEA. This generates a ranked recovery in the 'RR3' band, leading to a 'BB-' rating for the EUR650 million of senior secured notes. For the existing capital structure its estimates of creditor claims include a fully drawn EUR112.5 million super senior revolving credit facility, and about EUR15 million of bilateral facilities, both of which rank ahead of its super senior notes. Fitch expects La Doria's existing receivables factoring facilities of EUR152million to remain during and after distress without requiring alternative funding, although available at a reduced amount. This assumption is driven by the strong credit quality of the group's client base. Fitch estimates that recoveries for the proposed senior secured notes of EUR675 million, considering an increased super senior RCF to EUR122.5 million, would remain in 'RR3'. On refinancing completion, Fitch expects to assign a final 'BB-'/'RR3' rating to the new senior secured notes, maintaining a one notch uplift from the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Increase in EBITDA gross leverage to above 5x, due to lower profitability or debt-funded acquisitions - EBITDA margin below 12%, resulting in lower FCF margins below 2% - EBITDA interest coverage weakening towards 3.0x or below Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch does not envisage an upgrade to the 'BB' rating category unless the following occurs: - Achievement of wider scale and broaden diversification across geographies, and product premiumisation supports EBITDA growth to EUR300 million - Higher EBITDA margin supporting FCF margin at above 3% - EBITDA gross leverage consistently below 4x, driven by organic expansion, integration of bolt-on targets or gross debt prepayment and EBITDA interest coverage above 4x for an extended period Liquidity and Debt Structure Fitch forecasts La Doria's available cash balance at around EUR40 million at end-2025. Stable operating performance with minimal working capital outflows and limited capex should support positive FCF before acquisitions of EUR111 million in 2025 and EUR33 million a year (Fitch assumptions) in 2026-2028. La Doria will also have access to the fully undrawn increased RCF of EUR122.5 million. On completion of the refinancing, it will have no major debt maturing before 2030, when the new senior secured notes of EUR675 million come due. Issuer Profile La Doria is an Italian manufacturer of private-label tomato, vegetable and fruit derivatives, including sauces, soups, dressings, purees and juices. 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 ----------- ------ -------- ----- La Doria S.p.A. LT IDR B+ Upgrade B senior secured LT BB-(EXP) Expected Rating RR3 senior secured LT BB- Upgrade RR3 B+ OMNIA TECHNOLOGIES: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Omnia Technologies S.p.A.'s Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook and its senior secured rating at 'B' with a Recovery Rating (RR) of 'RR4' following the announcement of a EUR100 million fungible add-on to its existing EUR500 million senior secured notes due 2031. The affirmation reflects Fitch's view that the fungible add-on is neutral to the rating, as EBITDA leverage will remain below the negative sensitivity of 7.0x, despite an increase as a result. The group will use the proceeds to repay EUR45 million currently outstanding under its revolving credit facility and other debt of EUR34 million, with the rest added to the balance sheet for acquisitions. The Stable Outlook indicates Fitch's expectation that Omnia Technologies will successfully integrate its recent acquisitions and achieve revenue growth and cost synergies leading to improved EBITDA, which will support deleveraging over the medium-term from the current high level. Key Rating Drivers Add-On to Increase Leverage: Fitch now expects EBITDA leverage to be 6.3x at end-2025, compared with the previous forecast of 5.5x. This remains well within the negative sensitivity of 7.0x. This change is driven by an increase in total debt, which Fitch now expects to be about EUR60 million higher at end-2025 versus its previous forecast. Fitch continues to forecast steady deleveraging from 2026, supported by revenue growth and margin improvement, with EBITDA leverage reaching 5.4x at end-2028. Growth via Acquisitions: Omnia Technologies has increased its scale and diversification through 25 acquisitions, most of which were bolt-on, over the past four years, particularly in 2023 and 2024. This increased the group's revenue to about EUR740 million on an annual run-rate basis. Reported revenue in 2024 was about EUR503 million, as this figure does not include a full year of trading for many of the acquisitions. Management is focusing on improving the group's profitability and completing the integration of recent acquisitions. Fitch expects the group to continue expanding through bolt-on acquisitions over the medium term, financed from cash flow. Further increase of debt and leverage may drive negative rating action. Solid Profitability Expected: Historical statutory financials are not representative, as the group has undergone many acquisitions. Its rating case incorporates expected EBITDA margins of 13.6%-14.5% through 2025-2028. Fitch expects the group will benefit from management's optimisation initiatives, the completion of the integration process and other synergy effects. Steady profitability improvement is also supported by a rising share of aftermarket revenue, which contributes about 26% of total group sales. Volatile FCF: Fitch forecasts a slightly negative free cash flow (FCF) margin for 2025, partly eroded by working capital outflows. However, this should turn positive, in the low single digits, during 2026-2028, given the absence of dividend payments, sustainable capex levels and an expected improvement in EBITDA, which will support the group's deleveraging capacity. Good Diversification: Omnia Technologies' business profile reflects good geographical and customer diversification. About 21% (pro forma for acquisitions) revenue in 1Q25 was exposed to Italy, 33% to the rest of Europe, 15% to North America, 12% to Asia and 19% to other regions. The group also benefits from a wide range of customers, with the top-10 representing only 10% of revenue. Fitch assumes a manageable impact from US tariffs. Leading in Niche Market: The group produces machinery primarily for the beverage sector, particularly in the wine, soft drinks, water and spirits end-markets. In this niche market, Omnia Technologies holds a leading position and sells its products globally. It has a well-established footprint and long-term relationships with customers. Its product portfolio covers the full value chain across end-markets, which provides a sustainable order backlog and moderate revenue visibility. Less Cyclical End-Markets: The group's underlying market is represented by the diversity of the beverage industry, which is known for its stable demand and non-cyclical nature. Demand in the beverage industry is supported by population growth, urbanisation and rising disposable income. This supports visibility and sustainability of Omnia Technologies' revenue and EBITDA generation. Integration Risk: Fitch expects heightened integration risk for ACMI, a producer of high-speed end-of-line equipment, and the SACMI beverage division, a producer of high-speed blowing and filling equipment, as these acquisitions are of much larger scale than previous ones. Execution risk is mitigated by a well-defined M&A execution and integration strategy implemented since 2021, with 15 companies fully integrated and EUR21 million EBITDA synergies achieved by 1Q25. Nevertheless, EBITDA growth targets will not be met if further synergies are not realised, potentially putting pressure on the rating. Peer Analysis Omnia Technologies' business profile, like those of Flender International GmbH (B/Stable), EVOCA S.p.A. (B/Stable) and Ammega Group B.V. (B-/Stable), is constrained by a less diversified product range and end-markets exposure than at larger industrial peers. Nevertheless, the group has good geographical diversification, similar to Ahlstrom Holding 3 Oy (B+/Negative), Ammega, Flender and INNIO Group Holding GmbH (B+/Positive). Omnia Technologies' solid double-digit EBITDA margins are similar to those of some Fitch-rated diversified industrial peers, such TK Elevator Holdco GmbH (B/Stable), and Ahlstrom. Fitch forecasts a material improvement in FCF margins to the low single digits from 2025, which will be comparable to those Fitch expects for Ahlstrom, but lower than for Evoca and Ammega. Fitch forecasts Omnia Technologies' leverage will reach 6.3x by end-2025, which would be commensurate with that of Ahlstrom and Flender, but lower than at TK Elevator and Ammega. Key Assumptions - Revenue growth of around 40% in 2025, due to recent large acquisitions and in the low single digits in 2026-2028 - Optimisation programme and synergies from acquisitions to drive EBITDA margin to 13.6% in 2025 and 14.5% by 2028 - Capex at EUR25 million a year in 2025-2028 - M&A of EUR40 million in 2025, reducing to EUR20 million a year in 2026-2028 - No dividend payments to 2028 Recovery Analysis - The recovery analysis assumes that Omnia Technologies would be reorganised as a going concern in bankruptcy rather than liquidated. - Fitch assumes a 10% administrative claim. - Fitch estimates going concern EBITDA at EUR70 million, reflecting its view of a sustainable, post-reorganisation EBITDA on which Fitch bases the valuation of the group (Fitch has not incorporated ongoing debt-funded bolt-on acquisitions). - Fitch applies an enterprise value multiple of 5.0x to going concern EBITDA to calculate a post-reorganisation valuation. This reflects Omnia Technologies' good market position in the production of equipment for the beverage industry and healthy geographical and customer diversification. The multiple also reflects the group's constrained scale compared to that of peers. - Fitch estimates senior debt claims - after the add-on - at EUR715 million, comprising a EUR115 million super senior secured revolving credit facility and EUR600 million senior secured notes. Its waterfall analysis generated a ranked recovery for Omnia Technologies' notes equivalent to a Recovery Rating of 'RR4', leading to a 'B' rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage above 7.0x - EBITDA interest coverage below 2.0x - Consistently negative FCF margin - Aggressive shareholder-friendly policies or acquisitions leading to a further increase in leverage Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage below 5.0x - FCF margin consistently above 2% - Successful implementation of strategic optimisation initiatives and integration following acquisitions, leading to EBITDA margin growth Liquidity and Debt Structure As of 31 March 2025, Omnia Technologies reported EUR61 million cash on its balance sheet, before Fitch's adjustment of EUR12 million for not readily available cash. Concurrent to the add-on, the group is also increasing its revolving credit facility by EUR25 million to EUR115 million. Liquidity is adequate to fund the forecast negative FCF for 2025 and further identified M&A for 2025. Expected positive FCF generation from 2026 provides additional liquidity cushion in the medium term. The group's debt, after the transaction, will be represented by EUR600 million senior secured floating-rate notes. The maturity of the notes is seven years, leaving no material scheduled debt repayments until November 2031. Issuer Profile Omnia Technologies is an Italy-based company providing automated machinery and end-to-end solutions, mainly for the wine and beverage industry, but also the pharmaceutical industry. The product portfolio focuses on processing, bottling, packaging systems, vial filling, capping and water treatment. 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 ----------- ------ -------- ----- Omnia Technologies S.p.A. LT IDR B Affirmed B senior secured LT B Affirmed RR4 B =========== P O L A N D =========== DL INVEST: Fitch Assigns 'BB-' LongTerm IDR, Outlook Positive ------------------------------------------------------------- Fitch Ratings has assigned Polish real-estate company, DL Invest Group PM S.A. (DLIG), a first-time Long-Term Issuer Default Rating (IDR) of 'BB-'. The Outlook is Positive. Fitch has also assigned DLIG's planned EUR350 million benchmark unsecured bond a senior unsecured expected rating of 'BB-(EXP)' with a Recovery Rating of 'RR4'. The assignment of a final rating is contingent on final documentation conforming to information already received. The ratings are supported by DLIG's quality logistic assets in Poland, with some offices and retail parks. However, the portfolio's size, with a value of PLN3.4 billion at end-2024, results in asset and tenant concentration. The Positive Outlook reflects Fitch's expectation that the group's net debt/EBITDA leverage will decrease to about 11x in 2027, from a high 17x in 2025. Fitch expects rental-derived EBITDA interest cover of 1.5x-1.9x during 2026-2028. DLIG's portfolio uses mostly secured funding. Part of the proceeds from the planned unsecured bond will be used to repay some secured debt, creating a meaningful unencumbered asset pool. Key Rating Drivers Core Logistic Portfolio: DLIG's industrial assets total 0.75 million square metres (sqm) of gross leasable area (GLA) and were valued at PLN2.3 billion at end-2024. DLIG's flagship is a logistic park in Psary, about 20km from Katowice, with a total GLA of 241,000 sqm and a market value of PLN881 million. The key tenant is Inditex, which has leased 169,000 sqm for seven years. Other tenants include DHL (Deutsche Post AG; A-/Stable) and Stokrotka, a supermarket chain. The second-largest asset, acquired in 2024, is a former Stellantis N.V. (BBB/Stable) car-engine factory in Bielsko-Biała with a GLA of 267,000 sqm and value of PLN336 million. The prime industrial location is balanced against the secondary quality of the buildings. DLIG has lined up tenants to fully occupy this asset. Office and Retail Diversification: DLIG also owns a portfolio of small-to-mid size office assets (GLA 12,000 sqm on average), with a significant retail and services component. The largest asset (GLA 27,000 sqm), a Craft office building in Katowice, is being partially redeveloped into a hotel. Other offices, some secondary, have high occupancy, despite wider market vacancy in Katowice (about 20%) and some other markets. DLIG also owns 13 retail parks, which are valued at PLN318 million. Asset and Tenant Concentration: The group's portfolio is concentrated within its top-10 assets, including Psary, Dębica (market value of PLN193 million) and Teresin (PLN296 million) logistic parks, comprising over 70% of total end-2024 portfolio value. The tenant concentration is also high, as the top-10 tenants represent 51% of rental income, including the top tenant, Inditex (20%). Other tenants include Stokrotka (8%), parcel delivery company InPost S.A. (BB+/Stable, 6%), car parts supplier Hutchinson (5%) and DHL (4%). Silesia-Focused Portfolio: Most of DLIG's assets are in the Silesia Voivodeship, where many socioeconomic indicators exceed Poland's average. Its capital city, Katowice, with its metropolitan area, has a population of around 2.5 million. The region is also the second-biggest industrial sub-market in Poland, with existing stock of almost 6 million sqm, or about 17% of total stock. Continued Portfolio Growth: DLIG spent PLN1.4 billion on capex and acquisitions during 2022-2024. In 2025, it plans to accelerate portfolio growth through property developments and acquisitions over the next two years, with a PLN1.8 billion, largely uncommitted, pipeline. DLIG has a minimum 70% pre-let target before a unit's construction starts. Stable Operational Performance: The group's portfolio occupancy remained over 95% during 2021-2024. The weighted-average lease length to earliest break (WALB) of 5.5 years is a mix of longer logistic leases (WALB: 6.7 years) and shorter office and retail leases (below four years). Like-for-like rental growth in 2024 was mostly due to 7.7% inflation-linked indexation under tenancy agreements. Emira Investment in DL Invest Group: In 4Q24-1Q25, Emira, a South African REIT, invested EUR100 million in DLIG's Luxembourg parent entity (LuxCo). This investment is structured as preferred shares and loan notes linked together. The linked instrument is undated, but after five years (plus one year under LuxCo's extension option), Emira may exercise a redemption option at EUR175 million. The instrument requires an annual cash return (7.2% minimum interest coupon) routed as a dividend from DLIG. Analytical Approach to Emira Investment: Most funds invested by Emira have been injected into DLIG as equity to fund logistic portfolio growth. Fitch treats this as DLIG's subordinated debt, as DLIG-generated cash flow is needed to service Emira's linked instrument payments, adding EUR175 million to its total debt amount. Fitch includes the cash-pay requirement to calculate DLIG's cash interest payments. Emira has contractual mechanisms for its capital to be repaid, which include instructing asset disposals from LuxCo's property companies, causing change of control-linked debt repayment requirements at the DLIG level. Consequently, Fitch treats this capital as debt under its criteria. Decreasing Leverage: Fitch forecasts DLIG's net debt/EBITDA at a high 17x in 2025. Fitch expects this to fall to 14.4x in 2026, reflecting rents coming on-stream from developments that DLIG pre-lets. Phasing further development spend without the need for additional equity, Fitch forecasts net leverage reduction to 11x by 2027-2028, as the group limits asset acquisitions and does not plan to pay ordinary dividends. Fitch expects EBITDA interest cover to improve to 1.8x in 2027, from 1.2x. Some Foreign-Currency Risk: In 2024, about 75% of DLIG rent came from euro-denominated leases. This matches the currency of the planned bond and most of the group's existing debt (87% outstanding at end-2024). The remaining rents, mainly from retail assets, were in Polish zloty. Governance Structure Limitations: DLIG is controlled by Dominik Leszczynski, a co-founder and CEO of the group. The concentrated, private ownership means financial disclosure and corporate governance are not comparable to listed companies. Peer Analysis DLIG's closest peer is MLP Group S.A. (BB+/Stable), with its PLN4.2 billion Poland-focused portfolio of mostly modern logistic and industrial assets. DLIG and MLP's portfolios have asset and tenant concentrations due to their limited size. This distinguishes them from higher-rated continental European logistic peers, which have larger, less concentrated portfolios. Other Fitch-rated peers are central eastern European property companies, especially Akropolis Group, UAB (BB+/Stable), whose EUR1 billion retail portfolio is similar to DLIG's in size and concentration. However, DLIG's portfolio benefits from asset-class diversification, with logistics (67% of market value) supplemented with offices (24%) and retail (9%). The diversification of Globe Trade Centre S.A. (GTC, BB/Rating Watch Negative) is higher, with offices (52%), retail (29%) and residential-for-rent in Germany (19%). GTC's portfolio value is EUR2.4 billion. The retail-focused portfolio of NEPI Rockcastle N.V. (BBB+/Stable), valued at EUR6.9 billion, and Globalworth Real Estate Investments Limited's (BBB-/Stable) office-focused EUR2.5 billion portfolio are larger and more diversified. Both DLIG and MLP have broadly comparable operating metrics with high occupancy (DLIG's logistics: 98%; MLP: 95%) and WALB (DLIG's logistics assets: 6.7 years, MLP: 8 years). DLIG's financial profile, including Fitch-forecast net debt/EBITDA improving to 11x in 2027, from 17x in 2025, is weaker than MLP's leverage of around 10x. Akropolis has the most conservative financial profile, with net debt/EBITDA forecast below 4.0x until 2026 and loan/value below 35%. Fitch expects Globalworth's net debt/EBITDA to be about 8.5x. NEPI's financial profile is stronger than Globalworth's. The financial profiles of the rated western European logistic peers are not directly comparable, as their assets are mostly in countries with lower interest rate environments than in Poland. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Rents modelled on an annualised cash-flow basis - Annual rent increase of 30%-40% in 2025-2027, driven by rental income from completed new developments and acquisitions coming on-stream; like-for-like growth, including the CPI indexation effect, and rent increases on renewals, limited to around 2% a year - About PLN1.5 billion of construction capex and over PLN900 million income-producing assets acquisitions until 2028 - No ordinary dividends paid for the next four years - Emira's investment treated as DLIG's subordinated debt, adding EUR175 million and about EUR7.2 million in interest expenses a year - Average cost of debt in 2025-2028 of 5.5%-6.1% - Constant euro/zloty exchange rate at 4.3. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Net debt/EBITDA consistently above 12.5x - EBITDA interest cover consistently below 1.1x - Loan/value above 65% - Twelve-month liquidity score below 1.0x - For the senior unsecured rating: unencumbered investment property assets/unsecured debt ratio below 1x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Expansion of the portfolio reducing asset and tenant concentration, while maintaining portfolio quality and above 95% occupancy rate - Net debt/EBITDA less than 11.5x on a sustained basis - EBITDA interest cover above 1.25x on a sustained basis - Unencumbered investment property assets/unsecured debt ratio trending towards 1.5x Liquidity and Debt Structure DLIG held PLN128 million of readily available cash at end-2024, which, pro forma for proceeds from the EUR350 million planned bond, would increase cash sources to PLN1.6 billion. After deducting about PLN1 billion designated for debt prepayment, the remaining PLN600 million is ample to cover PLN30 million of debt maturing during the next 12 months and Fitch-estimated negative free cash flow of over PLN370 million, including committed and uncommitted capex. DLIG does not have committed revolving credit facilities. DLIG's debt is mainly secured, with most of its assets pledged to banks. However, after prepayment of about PLN800 million of secured debt, DLIG's unencumbered asset pool will increase to about PLN1.6 billion. Relevant to the planned unsecured bondholders, Fitch expects the resultant Fitch-calculated income-producing investment property assets/unsecured debt ratio at 1x. The planned bond's draft documentation has a debt incurrence test subject to a secured net debt/total assets ratio of maximum 50% until end-2027 and 35% afterwards. Date of Relevant Committee 27 June 2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations DLIG has an ESG Relevance Score of '4' for Governance Structure, reflecting the lack of corporate governance attributes that would mitigate key person risk from the majority beneficial owner and CEO, Dominik Leszczynski. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- DL Invest Group PM S.A. LT IDR BB- New Rating senior unsecured LT BB-(EXP) Expected Rating RR4 ============= R O M A N I A ============= ONIX ASIGURARI: A.M. Best Affirms B(Fair) Fin. Strength Rating -------------------------------------------------------------- AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of "bb+" (Fair) of ONIX Asigurari S.A. (ONIX) (Romania). The outlook of these Credit Ratings (ratings) is stable. These ratings reflect ONIX's balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, limited business profile and marginal enterprise risk management. ONIX's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), was assessed at the strongest level at year-end 2024, underpinned by good internal capital generation. However, ONIX's small capital base and its lack of reinsurance protection increase the potential for volatility in risk-adjusted capitalization, particularly considering its exposure to large surety risks. The company's limited financial flexibility is also considered an offsetting factor in its balance sheet strength assessment. Conversely, AM Best views positively ONIX's conservative investment portfolio, which is entirely made up of cash or term deposits. ONIX's operating performance is assessed at the strong level, reflecting its track record of good technical results since inception. For the five-year period ending in 2024, the company reported a weighted average combined ratio of 55.7%, as calculated by AM Best. Investment profits have improved in recent years, benefiting from the healthy interest rates environment. ONIX is a niche mono-line insurer that focuses on surety business in Italy and Spain. The company leverages its specialist expertise to compete against larger players. Solvency II requirements are embedded within ONIX's risk framework and its Solvency II regulatory capital adequacy ratio is monitored against risk appetite levels approved by its board. The company's risk management framework is evolving, and its risk management capabilities are considered by AM Best to be below the company's risk profile in some areas. =========================== U N I T E D K I N G D O M =========================== BISHOPSTROW COLLEGE: Grant Thornton Named as Administrators ----------------------------------------------------------- Bishopstrow College Limited was placed into administration proceedings in The High Court Of Justice, Insolvency & Companies List, No 000062 of 2025, and Alistair Wardell and Richard J Lewis of Grant Thornton UK LLP were appointed as joint administrators on June 30, 2025. Bishopstrow College Limited is a company that operates Bishopstrow College, a UK-based independent international boarding school that prepares students for entry into leading boarding schools in the UK and overseas. Its registered office is c/o Grant Thornton UK Advisory & Tax LLP, 11th Floor, Landmark St Peter's Square, 1 Oxford St, Manchester, M1 4PB Its principal trading address is at Barrow House, Bishopstrow Road, Bishopstrow, Warminster, BA12 9HU The joint administrators can be reached at: Alistair Wardell Grant Thornton UK LLP 6th Floor, 3 Callaghan Square Cardiff, CF10 5BT Tel No: 029 2023 5591 -- and -- Richard J Lewis Grant Thornton UK LLP 2 Glass Wharf, Temple Quay Bristol, BS2 0EL Tel No: 0117 305 7600 For further information, contact: CMU Support Grant Thornton UK LLP Tel No: 0161 953 6906 Email: cmusupport@uk.gt.com 2 Glass Wharf, Temple Quay Bristol, BS2 0EL CARNIVAL PLC: Fitch Rates EUR1-Bil. Unsecured Notes Due 2031 'BB+' ------------------------------------------------------------------ Fitch Ratings has assigned Carnival plc (Carnival) anticipated EUR1 billion senior unsecured notes issuance due 2031 a 'BB+' rating with a Recovery Rating of 'RR4'. Carnival's Long-Term Issuer Default Rating (IDR) remains at 'BB+' with a Positive Rating Outlook, reflecting no material change in its EBITDA leverage since the last review. The proceeds will be used to redeem a portion of the senior secured term loan. The Fitch-calculated 2025 estimated EBITDA leverage of 4.1x for Carnival is in line with the 'BB+' range. Carnival benefits from its scale, high operating margins, strong liquidity, and its expectations of continued deleveraging. Potential risks include an economic downturn that reduces leisure demand and higher fuel prices. The Positive Outlook reflects Fitch's belief that solid booking activity will continue and management's commitment to debt reduction will lead to stronger credit metrics. Key Rating Drivers Cruise Demand Remains Strong: Cruise companies benefit from offering a better value proposition relative to resort vacations and having a large base of repeat customers. Carnival, along with Royal Caribbean and Norwegian Cruise Lines, has announced record bookings for both 2025 and 2026. The long-term nature of cruise bookings provides strong visibility, as cancellations are not typically material. Carnival is guiding net yield growth to rise by approximately 5.0% (constant currency) in 2025. Continued Debt Reduction: Carnival's debt materially increased during the pandemic to fund ship deliveries and cover operating costs. Fitch expects debt to decline to $27 billion in 2025, from $35.6 billion in 2022. Fitch also expects FCF growth and management's commitment to investment-grade metrics to lead to a rapid improvement in credit metrics. The decline in new ship deliveries over the next three years should lead to greater FCF growth and further debt reduction. Carnival also has approximately $1.1 billion of convertible notes, which Fitch expects to be largely settled through share exchanges. Increased FCF Growth: Fitch expects EBITDA growth, lower interest costs from debt reduction, and lower growth capex to result in higher FCF through the forecast horizon. Fitch estimates FCF will grow to $1.6 billion in 2025 and materially thereafter. Carnival should also benefit from higher customer deposits given the continued growth in bookings. Fitch does not anticipate any material shareholder returns until the company achieves investment-grade status. Leader in Cruise Industry: Carnival is the world's largest cruise operator with multiple brands. Due to its brand acceptance and market leading capacity, the company holds the top market share in the North American and European markets, which contribute most of its EBITDA. Historically, the company's scale has been a credit positive, but pandemic-related disruptions severely impacted Carnival due to its high fixed-cost structure and resulted in delayed ship deliveries. Under normal cruise operating conditions, Fitch considers Carnival's scale a positive factor. Moderate Industry Capacity Growth: Capacity growth is expected to be somewhat muted over the next several years given the reduction of new ship orders during the pandemic, as industry credit metrics weakened. However, Fitch believes lower supply growth will support net yield growth in the near term. Recent announcements of new ship builds will mostly not affect the market until the end of the decade, although capacity growth would still be modest. Favorable Industry Dynamics: The top players in the cruise line industry benefit from high barriers to entry due to significant ship capex spend, low global market penetration rates relative to other leisure activities, mobile assets that allow companies to move to other markets when existing markets are facing uncertain economic or geopolitical issues, and favorable tax treatment given their incorporation outside the U.S. Peer Analysis Carnival is the largest cruise ship operator in terms of berths and passengers carried compared to Royal Caribbean Inc. (BBB-/Positive) and Norwegian Cruise Line Holdings, Ltd. (NR). Carnival is also compared to other high-'BB' and low-'BBB' leisure credits, such as Hyatt Hotels Corporation (BBB-/Stable) and Wyndham Hotels & Resorts Inc. (BB+/Stable). Carnival has materially greater scale and geographic diversification than its comparable peers, although leverage is higher. Fitch believes Carnival's scale and FCF generation will result in materially improved credit metrics that will be more indicative of an investment-grade credit over the forecast horizon. Key Assumptions - Passengers carried expected to grow in the low-single digits during the forecast horizon. Occupancy expected to increase to 106% in 2026 and beyond; - Net yields are expected to increase 5% in 2025 and in the low- to mid-single digits over the remainder of the forecast horizon, which is below management guidance; - Adjusted cruise costs per available lower berth days, excluding fuel, are forecast to increase in the low- to mid-single digits over the forecast horizon; - Capex, including new ship deliveries, is expected to drop to $3.7 billion in 2025 and $3.6 billion in 2026; - There are no assumptions for share repurchases, common dividends, acquisitions or asset sales; - FCF is expected to be applied to debt reduction through the forecast horizon. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA Leverage sustaining above 4.5x; - Economic or geopolitical event that lasts for an extended period and results in a deterioration of the capital structure (i.e. increased debt, use of secured or priority guaranteed financing); - A more aggressive financial policy that includes accelerated ship building plans or increased shareholder allocations that would allow for credit metrics to become vulnerable during a weaker economic environment. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Sustainable positive FCF with application to debt payment; - EBITDA leverage approaching 4.0x; - A debt structure that does not include secured or guaranteed debt; - (CFO-Capex)/Debt is greater than 10%. Liquidity and Debt Structure Carnival had $2.1 billion of cash and. $8.4 billion of undrawn export credit facilities to fund ship deliveries planned through 2033. The company also has $4.5 billion of borrowings available under its current RCF, maturing in June 2030. Fitch expects Carnival to be FCF positive through the forecast horizon, which further enhances liquidity. Proceeds from the proposed Euro 1 billion senior unsecured note issuance due 2031 will be used to repay borrowings under the Secured Term Loan Facilities. Carnival has material debt repayments due over the next several years, including $4.4 billion due in 2027 and $6.1 billion due in 2028 pro forma the refinancing. Fitch believes debt reduction, potential conversion of convertible debt exchanged into shares, and refinancing opportunities should allow the company to address its debt repayment schedule. Fitch expects new ship deliveries to decline over the forecast horizon. The company plans no ship additions in 2026, and will add one each in 2027 and 2028. The company recently announced three new ships for the Carnival brand and two ships for the Aida brand, but the first delivery is not until 2029. Issuer Profile Carnival Corporation and Carnival plc (together, Carnival) is the largest global cruise company and among the largest leisure travel companies, with a portfolio of world-class cruise lines. Date of Relevant Committee May 9, 2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- Carnival plc senior unsecured LT BB+ New Rating RR4 COGNITA: S&P Assigns 'B-' Rating on Term Loan Facilities -------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue rating to the proposed euro- and U.S. dollar-denominated term loan facilities to be issued by Lernen Bidco Ltd. and Lernen US Finco LLC, subsidiaries of Lernen Bondco PLC (Cognita; B-/Positive/--). These include a GBP200 million-equivalent add-on split across the two tranches, due in 2029 and 2031, respectively. S&P assigns a '3' recovery rating to this debt, indicating its expectation of meaningful recovery prospects of 50% in a hypothetical event of a default. Cognita intends to use proceeds of the add-on to the term loans to repay some deferred considerations related to previous acquisitions with the remaining amount (approximately GBP160 million) to be retained on the balance sheet and allocated to support upcoming acquisition opportunities. This transaction will increase Cognita's total debt by GBP200 million and will result in S&P Global Ratings-adjusted debt-to-EBITDA ratio increasing toward 8.3x by the end of fiscal 2025 (Aug. 31, 2025), marginally above our previous expectation of 7.8x. However, S&P expects leverage to decline in fiscal 2026 toward 7.0x (compared with 6.8x previously), supported by EBITDA contribution from the acquired schools. This results in a minor delay to Cognita's projected deleveraging timeline. Nevertheless, the additional funding will support the group's growth plans and, given the group's strong track record of successful integration of acquisitions and solid operational performance, S&P considers this transaction to be in alignment with the current rating level. S&P's 'B-' issuer credit rating on the company, and the positive outlook, are therefore unchanged. The final amounts and closure of the proposed financing are subject to successful execution of the transaction. The issue and recovery ratings are subject to S&P's review of the final documentation. Learnen Bondco PLC--Forecast summary* Period ending Aug-31-2024 2025 2026 2027 (Mil. GBP) 2024a 2025e 2026f 2027f Revenue 1,015 1,121 1,280 1,396 EBITDA 256 298 351 401 Funds from operations (FFO) 70 96 130 184 Capital expenditure (capex) 85 135 108 101 Free operating cash flow (FOCF) 51 (24) 51 107 FOCF (after leases) 36 (38) 37 94 Debt 2,088 2,486 2,466 2,421 Adjusted ratios Debt/EBITDA (x) 8.1 8.3 7.0 6.0 FFO/debt (%) 3.3 3.9 5.3 7.6 FFO cash interest coverage (x) 1.4 1.6 1.7 2.0 FOCF/debt (%) 2.4 (0.9) 2.1 4.4 Annual revenue growth (%) 18.3 10.4 14.2 9.1 EBITDA margin 25.2 26.6 27.4 28.7 *All figures adjusted by S&P Global Ratings. a--Actual. e--Estimate. f--Forecast. Issue Ratings--Recovery Analysis Key analytical factors -- S&P has assigned its 'B-' issue rating to the senior secured debt including the proposed GBP200 million-equivalent term loan add-on, with a recovery rating of '3', reflecting its expectation of meaningful recovery prospects (50%-70%; rounded estimate: 50%) in the event of a default. -- S&P said, "In our view, recovery prospects are affected by the sizable amount of senior secured debt and the presence of local debt facilities. We note that the company remains reliant on local facilities, which we consider priority debt, thus affecting the recovery prospects of the rest of the capital structure." -- S&P understands that the group will continue investing in the development of new schools and acquisitions, which could enhance EBITDA generation in the medium term and thus, the potential EBITDA at emergence in a hypothetical default scenario. -- In S&P's hypothetical default scenario, it assumes a sharp drop in private school enrolments for a sustained period, due to weaker economic conditions, increased competition, and political or operational shocks, for example, significant reputational damage. -- S&P values the group as a going concern, due to its geographically diversified portfolio of schools; good revenue visibility, given that the average student tenure is longer than five years; and the strong brand names of its schools. The pro forma capital structure following the proposed transaction is as follows: -- GBP310 million revolving credit facility (RCF), maturing in October 2028; -- GBP1,062 million-equivalent euro-denominated term loan B (TLB), maturing in April 2029; -- GBP350 million U.S. dollar-denominated TLB, maturing in September 2031; -- GBP200 million-equivalent proposed TLB add-on; and -- GBP226 million of local facilities. Simulated default assumptions -- Year of default: 2027 -- Jurisdiction: U.K. Simplified waterfall -- EBITDA at emergence: GBP194 million. -- Implied enterprise value (EV) multiple: 6.5x, higher than the standard industry multiple of 5.5x, owing to private school operators' better revenue visibility and free cash flow capacity than other types of enterprise in the business and consumer services sector. -- Gross EV at default: GBP1.3 billion. -- Net EV after administrative costs (5%): GBP1.2 billion. -- Estimated priority claims (local debt): GBP200 million. -- Estimated first-lien claims: GBP1,949 million. -- Recovery rating: '3' (50%-70%; rounded estimate: 50%) Note: All debt amounts include six months of prepetition interest. First-lien claims include the GBP310 million RCF assumed 85% drawn at default. DRAIN PEOPLE: Exigen Group Named as Administrators -------------------------------------------------- The Drain People Ltd was placed into administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number: CR-2025-000949, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on July 2, 2025. Based in Leicestershire, UK, The Drain People Ltd is a family-run drainage solutions company that offered a wide range of services including drain unblocking, clearing, repairing, and CCTV surveys. The Company's registered office is at Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD Its principal trading address is at Unit S5, 7 Hawker Business Park, Melton Road, Burton-On-The-Wolds, Loughborough, England, LE12 5TQ 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 EG GROUP: Moody's Affirms 'B3' CFR & Alters Outlook to Positive --------------------------------------------------------------- Moody's Ratings has affirmed the B3 long term corporate family rating of global independent fuel forecourt retailer EG Group Limited (EG, EG Group or the company) and its B3-PD probability of default rating. Concurrently, Moody's have affirmed the B3 ratings on EG's backed senior secured bank credit facilities and senior secured instrument ratings issued by its subsidiaries EG Finco Limited, EG Global Finance plc. and EG America LLC. The outlook has been changed to positive from stable for all entities. The rating action reflects: -- Expected deleveraging to below 6.0x (on a Moody's-adjusted debt-to-EBITDA basis) within the next 12-18 months, supported by management's commitment to decrease company-adjusted net debt-to-EBITDA to 4.5x in the near term. -- Enhanced governance, driven by a strengthened management team, a refined strategic focus on operational improvements, and improved independent board representation. -- Moody's expectations that EG will maintain adequate liquidity with no material upcoming maturities. RATINGS RATIONALE EG's B3 CFR continues to reflect its strong position as a large, independent motor-fuel forecourt operator. The company owns multiple networks of petrol stations, convenience stores and foodservice outlets across the US, Europe, and Australia where it holds leading market positions. The sector benefits from broadly stable patterns because favourable trends in convenience shopping and foodservice largely offset gradually falling fuel demand due to increased vehicle fuel efficiency and rising electric vehicle (EV) penetration. Moody's expects leverage to decrease towards 6x in the next 12-18 months from 6.7x for the last twelve months to March 31, 2025. The first quarter of 2025 was adversely affected by bad weather conditions but Moody's expects improved performance throughout the rest of the year, supported by the company's focus on strategic initiatives to grow the business organically. The company is committed to reducing debt further and deleveraging towards 4.5x, on a company-adjusted net debt-to-EBITDA basis, in the near term. Conversely, the CFR also reflects EG's high operating leverage due to the prevalence of the company owned, company operated (COCO). EG's credit metrics still remain weak, with Moody's-adjusted debt-to-EBITDA of 6.7x, EBITDA-capex/interest expense around 1.0x and minimal free cash flow generation for the LTM to March 31, 2025. However, Moody's expects these to improve over the next 12-18 months given its public statement to delever. The rating also factors the challenging and uncertain macroeconomic conditions with consumer spending growth in the US likely to slow through the remainder of 2025. Moody's also recognises the longer term challenge the company faces to manage the transition to alternative fuel and the need to manage potential investment requirements. ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS EG's ESG Credit Impact Score of CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. EG's CIS-4 is driven by Moody's assessments that environmental, social and governance all have an impact on the current ratings. High carbon transition related risks are the main driver of EG's exposure to environmental risk. Social risks are mainly driven by increasing demographic and social pressures affecting future fuel demand in light of the electrification of vehicles. Governance risk exposure reflects the majority private equity ownership and historically aggressive financial strategy, with a history of debt funded acquisitions. Governance risks are somewhat mitigated by the progress made over the past three years, particularly over the last few months with the appointment of an additional independent board director, as well as strengthening the management team with senior specialised executives. LIQUIDITY Moody's considers EG's liquidity to be adequate, with cash on balance sheet of $249 million in addition to the $233 million available under its revolving credit facilities (RCF), as of March 31, 2025. Moody's expects the company to draw on its RCF to meet its cash flow requirements. EG has a substantial freehold portfolio valued at around $4 billion, providing further financial flexibility. The ability of the company to make use of its asset portfolio as an alternative source of liquidity was demonstrated by the sale and leaseback transaction in the US completed in May 2023. STRUCTURAL CONSIDERATIONS The B3 ratings of the backed senior secured instruments is in line with the CFR and reflects the company's capital structure becoming all senior and pari passu ranking, following the repayment of its second lien debt at the end of 2024, and hence the instrument ratings are now aligned with the CFR. OUTLOOK The positive outlook reflects Moody's expectations that leverage will trend towards Moody's upward rating guidance over the next 12-18 months of below 6.0x, supported by management's committed to deleverage is the near term. The outlook also incorporates expectations of improved operational performance, with the company growing its adjusted EBITDA. It further assumes that liquidity will remain at least adequate. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company is able to reduce leverage, as evidenced by Moody's adjusted gross debt to EBITDA, below 6.0x improving interest coverage, as measured by adjusted EBITDA - CAPEX / interest expense, towards 1.5x, and achieve significant positive free cash flow generation. An upgrade would also require the company to maintain at least adequate liquidity. EG's ratings could be downgraded if it is unable to grow its EBITDA, resulting in leverage not decreasing, free cash flow remains negative or Moody's adjusted EBITDA - CAPEX/ interest expense remains below 1.0x for a prolonged period. LIST OF AFECTED RATINGS Issuer: EG Group Limited Affirmations: Probability of Default Rating, Affirmed B3-PD LT Corporate Family Rating, Affirmed B3 Outlook Actions: Outlook, Changed To Positive From Stable Issuer: EG America LLC Affirmations: Backed Senior Secured Bank Credit Facility (Local Currency), Affirmed B3 Outlook Actions: Outlook, Changed To Positive From Stable Issuer: EG Finco Limited Affirmations: Backed Senior Secured Bank Credit Facility (Local Currency), Affirmed B3 Backed Senior Secured Bank Credit Facility (Foreign Currency), Affirmed B3 Outlook Actions: Outlook, Changed To Positive From Stable Issuer: EG Global Finance plc. Affirmations: Senior Secured (Foreign Currency), Affirmed B3 Outlook Actions: Outlook, Changed To Positive From Stable PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Retail and Apparel published in November 2023. EG's CFR is three notches below the Ba3 scorecard-indicated outcome. The difference reflects the greater importance of the company's weaker credit metrics when assigning the actual rating. COMPANY PROFILE EG Group is a global retailer operating petrol stations, convenience stores and foodservice outlets in Europe, the United States and Australia. The group was created through the merger of Euro Garages and European Forecourt Retail (EFR) Group in 2016. EG has evolved through a series of acquisitions to become one of the leading independent motor-fuel forecourt operators in Europe, the US and Australia. Pro forma for recent disposals of the company's remaining UK business reported revenue was $23 billion and company adjusted EBITDA $1.3 billion (on an IFRS 16 basis) for the last twelve months to March 31, 2025. The group is headquartered in Blackburn, England and is owned equally by funds managed by TDR Capital LLP and the two brothers who founded Euro Garages, Mohsin and Zuber Issa. GORDON NICOLSON: JT Maxwell Named as Administrators --------------------------------------------------- Gordon Nicolson Kiltmakers Ltd was placed into administration proceedings in The Edinburgh Sheriff Court Court Number: EDI-L93-25, and Andrew Ryder of JT Maxwell Limited was appointed as administrators on June 30, 2025. Gordon Nicolson was into the retail sale of clothing in specialised stores. Its registered office and principal trading address is at 189 Canaongate, The Royalmile, Edinburgh, EH8 8BN. The joint administrators can be reached at: Andrew Ryder JT Maxwell Limited Po Box 160 Blyth NE24 9GP For further information, contact: JT Maxwell Limited Email: corporate@jtmaxwell.co.uk. Tel No: 02892 448 110 MAISON BIDCO: S&P Downgrades ICR to 'B' on Ongoing Margin Pressure ------------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on U.K.-based homebuilder Maison Bidco Ltd. (Maison) to 'B' from 'B+'. At the same time, S&P lowered the issue rating to 'B', for which the recovery rating remains '3', on the developer's GBP275 million senior secured bond, indicating its expectation of about 60% recovery in the event of a payment default. The stable outlook reflects S&P's view that Maison' adjusted debt to EBITDA will remain at about 4.0x and EBITDA interest coverage matures at about 3.5x in 2025 and 2026. S&P said, "The downgrade reflects weaker operating performance and our view that recovery will be further delayed with its leverage exceeding our requirements for a 'B' rating level. Maison generated weaker than expected S&P Global Ratings-adjusted EBITDA in the first half-year of 2025 (ending April 30, 2025) owing to a sustained period of stable sales prices but elevated cost inflation, which led to an increase in debt to EBITDA of 4.1x (rolling 12 months as of April 30, 2025), exceeding our downside threshold for the 'B' rating. While overall mortgage access and affordability show signs of improvement, we expect volumes for 2025 to decline by 6% to around 3,300 units for the full year (ending October 2025) from 3,516 units year-end 2024 and compared with 4,074 units in 2023." In the first six months of fiscal 2025, Maison's completions declined by 5.7% year on year to 1,308 units, but its average selling price increased by 11.9% annually to GBP234,000, driven mainly by product and geographic mix effects. While total revenues increased by 5.2% annually to GBP306.1 million, reported EBITDA margin declined to 4.6% compared with 7.3% in the same period in the previous year. The S&P Global Ratings-adjusted EBITDA margin declined to 8.9% (RTM) compared with 10.2% in the same period in the previous year. S&P said, "We have updated our base case and forecast a longer period of recovery to what we previously anticipated. We expect that in fiscal 2025 and in fiscal 2026, Maison's average selling price will remain at about GBP230,000-GBP234,000. We forecast total revenues will amount to about GBP770 million (0.8% increase from GBP764 million in 2024, but EBITDA will likely decline to about GBP70 million compared with GBP73.6 million in 2024 and GBP99.6 million in 2023)." S&P said, "As a result of ongoing cost pressure, we anticipate the EBITDA margin to remain relatively low at 9.0%-9.5% in 2025 and 2026, below our prior expectations of a recovery close to 10% in 2026. We forecast debt to EBITDA to remain elevated at 4.0x over the next 12-18 months. "FOCF turned negative in fiscal 2024 and we expect it to remain constrained over the next 12-18 months. In fiscal 2024, Maison reported a negative FOCF of about GBP11 million, per S&P Global Ratings-adjusted calculations. Following our expectations on EBITDA margin pressure, working capital outflow of GBP50 million-GBP60 million annually, we anticipate that Maison will continue generating negative adjusted FOCF in the range of GBP35 million-GBP45 million range in 2025 and 2026. "We expect Maison to maintain a solid debt servicing capacity over our forecast horizon. We forecast Maison's EBITDA interest coverage to be about 3.5x-3.7x in 2025-2026 (3.5x as of end of April 2025), supported by the fixed interest rate on GBP275 million senior secured notes due in 2027 of 6%. The ratio has declined from 3.8x in fiscal 2024 and 5.2x in fiscal 2023 but remains in line with peers, rated in the 'B' category. "We think that Maison's multi-tenure business model, which combines open-market sales and sales to registered providers, moderates market volatility. In our view, Maison's revenue expectations in 2024 and the first six months of 2025 have remained robust. We think that part of Maison's sales coming from partnerships with local authorities and registered providers moderate revenue cyclicality, including public- and private-sector entities that are registered with the Regulator of Social Housing to provide affordable housing and are funded by the U.K. government. The company reported GBP306 million of revenue for the six months, ending April 30, 2025, compared with GBP291 million in the same period in the previous year. About GBP95.4 million of revenue stems from registered providers and development contracts, an increase of 12% from GBP85.2 million in the same period last year. We think that demand for Maison's homes could be supported by further interest rate cuts by the Bank of England, and we expect one rate cut per quarter until the bank rate reaches 3.5% in February 2026. "CEO Tim Beale will depart after eight years of service. We understand the handover to Ian Hoad, who joined the company in 1996, and has been divisional chairman since 2019, started on July 1, 2025. We currently do not see a credit impact from the announced change and understand that the company has maintained its overall strategy and goals. "We view Maison's liquidity position as adequate, with ample cash balance and available credit facilities despite weaker operating results. As of April 31, 2025, the company had GBP67 million in unrestricted cash and GBP70 million availability under its revolving credit facility (RCF) and we expect that this will be sufficient to maintain current operations and future growth initiatives. While Maison benefits from a solid average debt maturity profile exceeding two years and in line with our criteria, its next large maturity comprises the senior secured notes due in 2027. We expect the company to address its maturity well ahead to ensure sustainably adequate liquidity assessment. We further understand that its covenant headroom remains solid. "The stable outlook reflects our view that Maison's adjusted debt to EBITDA will remain at about 4.0x and EBITDA interest coverage matures at about 3.5x in 2025 and 2026." S&P could lower the rating on Maison if: -- S&P Global Ratings-adjusted debt to EBITDA increases to well above 5.0x; or -- EBITDA interest coverage deteriorates to well below 2.0x on a sustained basis with no short-term recovery potential. S&P said, "This could occur, if Maison's operating performance weakens more than we currently anticipate because of a slowdown of the sales rate, decline on average selling prices, or a strong decline in demand for its homes. Maison's FOCF deteriorating beyond our current forecast--which will lead to a debt increase or liquidity cushion to shrink, e.g. due to late refinancing activities of the upcoming bond maturity in 2027--could also result in a negative rating action." S&P could upgrade the rating on Maison if: -- S&P Global Ratings-adjusted debt to EBITDA reducing to comfortably below 4.0x; and -- EBITDA interest coverage remains above 3.0x. This could happen if Maison benefits from improved market conditions supporting sales and completion rates, combined with margin improvement due to an efficient cost management. A positive rating action would also hinge on the company generating positive FOCF. Maison should also be able to demonstrate adequate liquidity, including sufficient headroom under its covenants, and access to its RCF to fund its working capital needs and support its growth. NORTHERN REFRIGERATION: Leonard Curtis Named as Administrators -------------------------------------------------------------- Northern Refrigeration & Catering Equipment Ltd. was placed into administration proceedings in the High Court of Justice, Business and Property Court in Manchester, Company and Insolvency List CHD, Court Number: CR-2025-000876. Danielle Shore and Richard Pinder of Leonard Curtis were appointed as administrators on July 1, 2025. Northern Refrigeration is a manufacturer of kitchen furniture. The Company's registered office will be changed to Leonard Curtis, 4th Floor, Fountain Precinct, Leopold Street, Sheffield, S1 2JA, having previously been Eckington Business Park, Rotherside Road, Eckington, Sheffield, S21 4HL Its principal trading address is at Eckington Business Park, Rotherside Road, Eckington, Sheffield, S21 4HL The joint administrators can be reached at: Danielle Shore Leonard Curtis 4th Floor, Fountain Precinct Leopold Street Sheffield S1 2JA -- and -- Richard Pinder Leonard Curtis 21 Gander Lane, Barlborough Chesterfield, S43 4PZ Contact information for Administrators: The Joint Administrators Tel No: 0114 385 9500 Alternative contact: Elaine Holland PADWORTH COLLEGE: Grant Thornton Named as Administrators -------------------------------------------------------- Padworth College Limited was placed into administration proceedings in the High Court Of Justice, Insolvency & Companies List, No 000063 of 2025, and Alistair Wardell and Richard J Lewis of Grant Thornton UK LLP were appointed as joint administrators on June 30, 2025. Padworth College Limited is a private limited company operating in the general secondary education sector in the UK. Its registered office is c/o Grant Thornton UK Advisory & Tax LLP, 11th Floor, Landmark St Peter's Square, 1 Oxford St, Manchester, M1 4PB Its principal trading address is Padworth College, Sopers Lane, Padworth, Reading, RG7 4NR The joint administrators can be reached at: Alistair Wardell Grant Thornton UK LLP 6th Floor, 3 Callaghan Square Cardiff, CF10 5BT Tel No: 029 2023 5591 -- and -- Richard J Lewis Grant Thornton UK LLP 2 Glass Wharf, Temple Quay Bristol, BS2 0EL Tel No: 0117 305 7600 For further information, contact: CMU Support Grant Thornton UK LLP 2 Glass Wharf, Temple Quay Bristol, BS2 0EL Email: cmusupport@uk.gt.com Tel No: 0161 953 6906 R3 IOT: AAB Business Named as Administrators -------------------------------------------- R3 IOT Limited was placed into administration proceedings in the Court of Session, No P599 of 2025, and David McGinness and Judith Howson of AAB Business & Tax Advisory LLP were appointed as administrators on June 24, 2025. R3 IOT Limited, trading a Krucial, specialized in engineering design activities for industrial process and production. The Company's registered office is at 133 Finnieston Street, Glasgow, G3 8HB Its principal trading address is at 6/3 Turnberry House, 175 West George Street, Glasgow G2 2LB The joint administrators can be reached at: David McGinness Judith Howson AAB Business & Tax Advisory LLP 133 Finnieston Street Glasgow, G3 8HB For further details, contact: The Joint Liquidators Tel: 0141 221 2984 Email: restructuring@aab.uk Alternative contact: Claire Smith Tel: 0141 221 2984 Email: restructuring@aab.uk WD FF LIMITED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed WD FF Limited's (Iceland) Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook. Fitch also affirmed the senior secured notes issued by Iceland Bondco PLC, the company's subsidiary, at 'B+' with a Recovery Rating of 'RR3'. Iceland's IDR reflects its small scale and moderately high leverage, which are balanced by a specialist retail business model focused on the frozen food category and on value-seeking consumers. The company has a record of resilient profits through business cycles, except in FY23 (year-end March), when it was hit by high electricity costs. The Stable Outlook reflects the continued strength of its value positioning despite heightened UK competition. Fitch expects Iceland will keep generating mildly positive free cash flow (FCF), despite intensifying capex over FY25-FY27. Key Rating Drivers Resilient Market Share: Iceland's value positioning is a major support to its sales volume, market share and like- for-like volume growth in the UK grocery market, which underpins its Stable Outlook. The company's market share has remained resilient, at 2.3%-2.4%, over 2020-2025, despite the rapid growth of discounters raising their market share by 5% in the same period. Fitch expects Iceland's product offering to remain competitive for UK food consumers with weaker spending power, despite stiff competition. The company is the UK's second-largest frozen food retailer, after Tesco. Its continued investment in pricing and new store formats, and strong online offering, help the company to defend its market share and grow revenues. Leverage Aligned with Rating: Fitch projects Iceland's EBITDAR gross leverage to remain at 4.8x-5.0-x over FY25-FY27, which provides adequate headroom under its 'B' rating. Fitch reflects Iceland's flexible lease terms and IFRS lease liabilities in its leverage calculations, in line with its new criteria. This reduced its calculated gross leverage by 1.1x, compared with its earlier calculation, where Fitch capitalised its lease proxy using an 8x multiple. The high incidence of leases compresses fixed-charge cover to 1.4x, marginally lower than the 1.5x minimum for the 'B' IDR, although Fitch expects a mild improvement towards the threshold. Momentary Profit Pressure: Fitch projects Iceland's EBITDA margin will fall slightly, to 3.6% in FY26, due to labour cost increases and continued investment in price to drive volume growth, from its estimate of a 3.7% flat margin in FY25. The company, along with other UK-based retailers, will be hit by the rise in national insurance and minimum living wage contributions from FY26, which Fitch estimates will result in an additional cost of GBP50 million. Fitch expects the company to be able to recoup some costs with cost savings, including efficiency gains from its new Warrington distribution centre, limiting margin contraction. Expansionary Capex Limits Cash Generation: Fitch expects Iceland's capex to remain high in FY26-FY27, averaging GBP80 million a year, following an estimated spend of GBP70 million in FY25, due to the investment in the Warrington depot. Large investments in their manufacturing capabilities and capacity, supply chain efficiencies and store refurbishments, alongside the rollout of about 15 new warehouse stores annually, will constrain cash flow. As a result, Fitch forecasts FCF margins to remain neutral from FY25 to FY27, returning to around 1% in FY28 once capex normalises to GBP50 million. EBITDA Improvement Expected from FY26: The strategic investments in new manufacturing capabilities, supply chain improvements and store refurbishments are expected to drive EBITDA growth from FY26. These initiatives, together with continued warehouse store expansion and the rationalisation of the core stores, are anticipated to support margin improvement, with EBITDA margin forecast to reach 3.9% by FY28. Restricted Group Includes Restaurants: Iceland's restaurant business - under subsidiary Individual Restaurants Limited - became a guarantor of its senior secured notes in 2024 and is included in the restricted group. Fitch has included its revenue, EBITDA contribution from FY24, although the latter and its debt are immaterial to its metrics calculations. Most of this business' debt has been repaid, leaving a GBP18 million shareholder loan. Fitch treats the loan as debt, given its upcoming contractual maturity, although Iceland expects it to continue to be rolled over. Peer Analysis Iceland's business risk profile, as a mostly UK-based specialist food retailer, is constrained by its modest size and lower diversification compared with other Fitch-rated European food retailers, such as Tesco PLC (BBB/Stable), Bellis Finco plc (ASDA; B+/Stable) and Market Holdco 3 Limited (Morrisons; B/Positive). All three peers are larger, have greater diversification and a higher share of freehold store ownership compared with Iceland. Iceland has a smaller market share than those peers in the UK grocery sector but is second behind Tesco in the frozen food category. Also, its offer is not confined to frozen food, with 60% of its revenue generated from the sales of other food and, to a more limited extent, non-food products. Fitch estimates Iceland's EBITDAR gross leverage to have fallen to about 4.9x in FY25, which is lower than that of other Fitch-rated UK peers' in the 'B' category. Fitch expects Morrisons to deleverage to near 6.0x by 2025 and ASDA to below 5.0x in 2025. Iceland is larger in sales than Picard Bondco S.A. (B/Stable), a French specialist food retailer also active in frozen foods, but its profitability is materially weaker (EBITDAR margin of 6% versus Picard's 17%). This makes them comparable at the EBITDAR level but supports superior cash flow generation at Picard versus other food retailers. Picard operates mostly in the higher-margin premium food category and benefits from a strong brand awareness. Picard's EBITDAR gross leverage of around 7.0x has been higher than that of Iceland. The latter is driven by Iceland's more conservative capital-allocation policy and continued focus on deleveraging. Key Assumptions Fitch's Key Assumptions Within its Rating Case for the Issuer: - Retail revenue flat in FY25 and up about 2.6% in FY26, followed by low single-digit growth to FY28, primarily driven by higher net store openings and increased sales - Twelve net new store openings a year over FY26-FY28 - EBITDA margin gradually increasing towards 4% (FY24: 3.7%), as cost savings offset wage inflation - Working capital broadly stable in FY25-FY28 - Capex around GBP70 million on average a year for FY25-FY28 - No dividends until FY28 Recovery Analysis Fitch's Key Recovery Rating Assumptions: Fitch's recovery analysis assumed that Iceland would be reorganised as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Its going concern EBITDA estimate of GBP120 million reflects a sustainable, post-reorganisation EBITDA on which Fitch bases the enterprise valuation. The assumption also reflects corrective measures taken in the reorganisation to offset the adverse conditions that trigger its default, such as cost-cutting efforts or a material business repositioning. Fitch applied a multiple of 4.5x to the going-concern EBITDA to calculate a post-reorganisation enterprise valuation. The EUR50 million RCF is super senior to the company's senior notes in the debt waterfall and Fitch has assumed it to be fully drawn in default. Its waterfall analysis generates a ranked recovery for Iceland's senior secured notes in the 'RR3' category, resulting in a 'B+' rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Decline in like-for-like sales, with a loss of market share due to competition or to permanently lower capex, or an inability to pass on cost inflation to consumers, leading to accelerating EBITDA margin erosion or neutral FCF on a sustained basis - Tightening of liquidity due to unexpected cash outflows - EBITDAR gross leverage above 5.5x on a sustained basis - EBITDAR fixed-charge coverage consistently below 1.5x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Like-for-like sales rises and the maintenance of stable market shares, leading to increases in EBITDA margin towards 5% - EBITDAR gross leverage below 4.5x on a sustained basis - EBITDAR fixed-charge coverage above 1.8x for an extended period Liquidity and Debt Structure Iceland's liquidity is comfortable, with an estimated cash balance of just over GBP100 million at FYE25, after excluding GBP20 million restricted cash for seasonal working-capital swings (Fitch's adjustment). In addition, the company has an undrawn RCF. Iceland's debt maturity profile is concentrated in December 2027, and Fitch does not expect, due to neutral to mildly positive FCF projected over FY25-FY28, that the company will accumulate materially more cash than it has today by the maturity. However, refinancing risk is manageable given the expectation of no increase in leverage, the presence of a good liquidity buffer that could be used to reduce the amount of debt to be refinanced and the ability to reduce capex and generate more FCF. Issuer Profile Iceland is a British food retailer specialising in frozen and chilled food products at a low price point. It operates around 1,000 stores across the UK. 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 ----------- ------ -------- ----- Iceland Bondco PLC senior secured LT B+ Affirmed RR3 B+ WD FF Limited LT IDR B Affirmed B ********* 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. 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