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250729.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 Monday, July 28, 2025, Vol. 26, No. 149 Headlines I R E L A N D ARES EUROPEAN X: Moody's Ups Rating on EUR26MM Cl. E Notes to Ba1 FAIR OAKS VI: Fitch Assigns 'B-sf' Final Rating to Class F Notes I T A L Y BANCA IFIS: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable CASSIA SRL 2022-1: Moody's Affirms Ba3 Rating on EUR47.2MM C Notes ILLIMITY BANK: Fitch Hikes LT IDR to 'BB' & Keeps Rating Watch Pos. KEPLER S.P.A: Fitch Puts 'B' Final Rating to EUR500M Sr. Sec. Notes K A Z A K H S T A N FORTEBANK JSC: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable L U X E M B O U R G ALEXANDRITE LAKE: Fitch Assigns 'B+' Long-Term IDR, Outlook Stable MILLICOM INTERNATIONAL: Fitch Affirms 'BB+' LT IDR, Outlook Stable S P A I N CAIXABANK PYMES 11: Moody's Ups Rating on EUR318.5MM B Notes to B1 T U R K E Y SEKERBANK T.A.S: Fitch Puts 'CCC' Final Rating to $200MM AT1 Notes U N I T E D K I N G D O M ABILJO EXCAVATOR: PKF Smith Cooper Named as Joint Administrators BRAVEJOIN COMPANY: Marshall Peters Named as Administrator C-TRG RESOURCE: FRP Advisory Named as Administrators CHALLENGE LOGISTICS: FRP Advisory Named as Administrators CHALLENGE RECRUITMENT: FRP Advisory Named as Administrators CHALLENGE-TRG RECRUITMENT: FRP Advisory Named as Administrators EIGHT ASSET MANAGEMENT: Antony Batty Named as Administrators FINASTRA LIMITED: Moody's Assigns 'B3' CFR, Outlook Stable IMPALA BIDCO: Moody's Cuts CFR to B3, Under Review for Downgrade WILLIAMS CONTRACT: Bailams & Co Named as Administrator - - - - - ============= I R E L A N D ============= ARES EUROPEAN X: Moody's Ups Rating on EUR26MM Cl. E Notes to Ba1 ----------------------------------------------------------------- Moody's Ratings has upgraded the ratings on the following notes issued by Ares European CLO X DAC: EUR31,500,000 Class C Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Aaa (sf); previously on Oct 7, 2024 Upgraded to Aa1 (sf) EUR25,750,000 Class D Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to A1 (sf); previously on Oct 7, 2024 Upgraded to A3 (sf) EUR26,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Ba1 (sf); previously on Oct 7, 2024 Affirmed Ba2 (sf) Moody's have also affirmed the ratings on the following notes: EUR274,500,000 (Current outstanding amount EUR123,161,261) Class A Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 7, 2024 Affirmed Aaa (sf) EUR30,250,000 Class B-1 Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 7, 2024 Affirmed Aaa (sf) EUR17,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 7, 2024 Affirmed Aaa (sf) EUR13,500,000 Class F Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed B1 (sf); previously on Oct 7, 2024 Upgraded to B1 (sf) Ares European CLO X DAC, issued in September 2018 and refinanced in June 2021, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Ares European Loan Management LLP ("AELM"). The transaction's reinvestment period ended in April 2023. RATINGS RATIONALE The rating upgrades on the Class C notes, the Class D notes and Class E notes are primarily a result of the deleveraging of the senior notes following amortisation of the underlying portfolio since the last rating action in October 2024. The affirmations on the ratings on the Class A notes, Class B-1 notes, Class B-2 notes and Class F notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. The Class A notes have paid down by approximately EUR81.2 million (29.6%) since the last rating action in Oct 2024 and EUR151.3 million (55.1%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated July 2025[1] the Class A/B, Class C, Class D and Class E OC ratios are reported at 167.1%, 142.6%, 127.3% and 114.9% compared to September 2024[2] levels of 150.1%%, 133.4%,122.3% and 112.8%, respectively. Moody's note that the July 2025 note principal payments are not reflected in the reported OC ratios. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR306,062,418 Defaulted Securities: EUR3,000,000 Diversity Score: 50 Weighted Average Rating Factor (WARF): 3043 Weighted Average Life (WAL): 3.2 years Weighted Average Spread (WAS) (before accounting for Euribor/reference rate floors): 3.82% Weighted Average Coupon (WAC): 4.16% Weighted Average Recovery Rate (WARR): 43.84% Par haircut in OC tests and interest diversion test: 0% The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Moody's note that the July 2025[1] trustee report was published at the time Moody's were completing Moody's analysis of the June 2025 data. Key portfolio metrics such as WARF, diversity score, weighted average spread and life, and OC ratios exhibit little or no change between these dates, and Moody's anticipated the July 2025 paydown in Moody's analysis. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank, using the methodology "Structured Finance Counterparty Risks" published in May 2025. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. -- Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. FAIR OAKS VI: Fitch Assigns 'B-sf' Final Rating to Class F Notes ---------------------------------------------------------------- Fitch Ratings has assigned Fair Oaks Loan Funding VI DAC's notes final ratings, as detailed below. Entity/Debt Rating ----------- ------ Fair Oaks Loan Funding VI DAC X Notes LT AAAsf New Rating A Loan LT AAAsf New Rating A Notes LT AAAsf New Rating B Notes LT AAsf New Rating C Notes LT Asf New Rating D Notes LT BBB-sf New Rating E Notes LT BB-sf New Rating F Notes LT B-sf New Rating M Notes LT NRsf New Rating Subordinated Notes LT NRsf New Rating Z Notes LT NRsf New Rating Transaction Summary Fair Oaks Loan Funding VI DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. The portfolio has a target par of EUR350 million. The portfolio is actively managed by Fair Oaks Capital Limited (Fair Oaks). The collateralised loan obligation (CLO) has a 4.5-year reinvestment period and a 7.5-year weighted average life (WAL) test at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Positive): Fitch considers the average credit quality of obligors to be in the 'B' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 24.4. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the identified portfolio is 59.9%. Diversified Asset Portfolio (Positive): The transaction has a concentration limit for the 10 largest obligors of 20%. The transaction also includes other various concentration limits, including a maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has two matrices that are effective at closing and two that are effective six months after closing, all with fixed-rate limits of 5% and 10%. The closing matrices correspond to a 7.5-year WAL test while the forward matrices correspond to a seven-year WAL test. The transaction 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 transaction structure against its covenants and portfolio guidelines. WAL Step-Up Feature (Neutral): The transaction can extend the WAL by one year, following the step-up determination date, which is 12 months after closing. The WAL extension is at the discretion of the manager but is subject to conditions including fulfilling the portfolio profile tests, collateral-quality tests, coverage tests and meeting the reinvestment target par, with defaulted assets at their collateral value on the step-up determination date. Cash-flow Analysis (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 both the coverage tests and the Fitch 'CCC' limit after reinvestment, and a WAL covenant that progressively steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class X and A notes and would lead to a downgrade of up to two notches for the class B to E notes, and to below 'B-sf' for the class F note. 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. The class B to F notes each have a rating cushion of up to two notches due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to four notches for the rated notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than- expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY 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 Fair Oaks Loan Funding VI 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 ========= BANCA IFIS: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Banca IFIS S.p.A.'s (IFIS) Long-Term Issuer Default Rating (IDR) at 'BB+' and Viability Rating (VR) at 'bb+'. The Outlook on the Long-Term IDR is Stable. This follows the bank's successful takeover of illimity Bank S.p.A (BB/Rating Watch Positive). IFIS's ratings are not immediately affected by the completion of the takeover as the expected business model strengthening will take time to materialise. Fitch also believes IFIS's satisfactory execution record and adequate capitalisation mitigate the financial impact from the acquisition and the execution risk stemming from the integration of illimity, which is a large and materially weaker entity relative to IFIS. Over the medium term, the ratings could benefit from a swift integration, realisation of planned synergies through the turnaround of the acquired bank, and efficient management of the combined entity's risk appetite and funding. Key Rating Drivers Acquisition to Benefit Business Profile: IFIS's ratings primarily reflect its specialised business model, with an established niche franchise and adequate through-the-cycle profitability, both of which should ultimately benefit from the additional diversification within niche segments brought by illimity. The ratings also reflect a temporary negative impact on the combined bank's operating profitability given integration costs, and IFIS's prudent capital and liquidity management. The ratings also consider a moderately higher risk appetite than average linked to its business model and organic impaired loans ratio (which excludes the purchased non-performing loan portfolio), and adequately diversified but price-sensitive funding. Illimity Acquisition Accelerates Diversification: The acquisition of illimity could help IFIS accelerate its business and earnings diversification and franchise growth in its businesses with Italian SMEs, despite its expectation of the wind-down of less profitable businesses. Fitch expects the financial effect of the acquisition and integration risks to be contained. Fitch believes IFIS will notably benefit from increased scale in its small corporate and investment banking activities and, to a lesser extent, in its core historical franchise of factoring - into which illimity had recently ventured - and expand in the lucrative but shrinking corporate impaired loan market. The combined entity will remain the fourth largest company in the non-performing loan (NPL) business in Italy. Transformational Acquisition: Fitch believes IFIS is adequately positioned to pursue its diversification strategy while achieving benefits of scale through the acquisition of illimity. The latter is large, representing about 40% of IFIS's assets and less than 30% of revenue. The acquisition will therefore be transformative for IFIS and Fitch expects updated medium-term strategic targets in 2026. Fitch expects the combined operating profit/risk weighted assets (RWAs) ratio to temporarily fall below IFIS's recent levels of 2%-2.5% in 2025, due in part to integration costs, before it rebounds to above 2% once synergies are realised by 2027. Controlled Execution Risk: Fitch believes execution risks from the acquisition of illimity are consistent with IFIS's ratings. This is despite a materially weaker credit profile and business model at illimity than at IFIS. The successful completion of the takeover, with more than 92% of ownership already secured, should smooth the execution of planned synergies, facilitate the integration and, potentially, reduce the risk of some portfolios. IFIS plans to first proceed with the acquisition of remaining minorities and then delist illimity in the coming months, while performing due diligence after acquisition in parallel. Fitch expects IFIS will ultimately merge with illimity in 2026. Acquisition Reduces Capital Headroom: IFIS maintains adequate RWAs and leverage-based capital metrics, considering its risk appetite. Its 16.55% common equity Tier 1 (CET1) ratio at end-March 2025, after a rise of 45bp in 1Q25, provides a comfortable buffer to cushion the acquisition of illimity. Fitch expects IFIS to maintain its CET1 ratio above the bank's 14% target by end-2026, given expected badwill recognition, consistent internal capital generation and prudent capital management. The small additional premium offered to illimity's shareholders at the end of the tender period did not result in material additional capital erosion compared with its initial forecast. Price-Sensitive Deposits, Prudent Liquidity: The acquisition of illimity should contribute to further expansion of IFIS's deposit base, but Fitch expects the latter to tighten pricing on illimity's expensive funding mix. IFIS's access to wholesale debt markets is more established than illimity's and other small Italian banks, which should help it gradually replace the acquired entity's maturing debt at a more cost-effective level. The key rating drivers of IFIS's VR and IDRs are outlined in its Rating Action Commentary published on 10 April 2025 (see "Fitch Affirms Banca IFIS at 'BB+'; Outlook Stable") Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Negative rating pressure could arise from the acquisition of illimity if IFIS failed to manage integration risks. This could manifest in a failure to extract synergies, while capital and earnings durably weaken versus IFIS's trajectory before the acquisition. Materially larger-than-expected operational losses on the integration could also lead to a negative rating action. IFIS's ratings have sufficient headroom to absorb a moderately weaker-than-expected macroeconomic environment that could affect its business in the short term. However, the ratings could be downgraded if IFIS's organic impaired loans ratio structurally increased towards 10% and the CET1 ratio fell below 14% without prospects of reversing in the short term. Operating profit falling towards 1.5% of RWAs on a sustained basis would also put pressure on the ratings, especially if this resulted from heightened pressure on funding costs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Rating upside is primarily contingent on evidence of progress in IFIS's diversification strategy, notably through the smooth integration of illimity, which would ultimately strengthen its business profile, while controlling its risk appetite. A successful integration demonstrated by execution of the announced synergies, the alignment of risk cultures, and tangible benefits from an increased size in key operating segments, all within a reasonable timeframe, could ultimately be positive for the sustainability of IFIS's business profile and earnings, and its ratings. In particular, IFIS would have to sustain a higher earnings generation than its long-term average (e.g. an operating profit/RWAs ratio of at least around 2.5%). This would have to be accompanied by continued prudent capital management, with a CET1 ratio comfortably above the 14% target, and asset quality maintained at around current levels (e.g. organic impaired loans ratio of 5%). OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Deposits and Senior Debt IFIS's long-term deposit rating of 'BBB-' is one notch above the bank's Long-Term IDR given full depositor preference in Italy and the bank's compliance with minimum requirements for own funds and eligible liabilities (MREL). The short-term deposit rating of 'F3' is mapped to IFIS's 'BBB-' long-term deposit rating. Senior preferred debt is rated in line with the Long-Term IDR. This reflects its expectation that IFIS's resolution buffers under MREL will comprise both senior preferred and junior debt instruments, plus equity. The rating also reflects its expectation that the buffer of more junior instruments is unlikely to sustainably exceed 10% of the bank's RWAs. Subordinated Debt The Tier 2 debt is rated two notches below IFIS's VR for loss severity to reflect poor recovery prospects. No notching is applied for incremental non-performance risk because write-down of the notes will only occur once the point of non-viability is reached and there is no coupon flexibility before non-viability. No Government Support IFIS's Government Support Rating (GSR) of 'no support' reflects Fitch's view that senior creditors cannot rely on receiving full extraordinary support from the sovereign if the bank becomes non-viable. The EU's Bank Recovery and Resolution Directive and the Single Resolution Mechanism for eurozone banks provide a framework for resolving banks that requires senior creditors participating in losses ahead of a bank receiving sovereign support. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Deposits and Senior Debt The long-term deposit and senior preferred ratings are primarily sensitive to changes in the bank's Long-Term IDR, from which they are notched. In addition, the long-term deposit rating is also sensitive to a reduction in the buffers of senior and junior debt, for example, if the bank fails to comply with its MREL. The senior preferred debt could be upgraded if IFIS were expected to meet the resolution buffer requirements exclusively with more junior instruments, or if Fitch expected resolution buffers represented by more junior instruments to be at least 10% of RWAs on a sustained basis, neither of which is currently the case. Subordinated Debt The subordinated debt rating is primarily sensitive to changes in the VR, from which it is notched. The rating is also sensitive to a change in the notes' notching, which could arise if Fitch changes its assessment of their non-performance relative to the risk captured in the VR. An upgrade of the GSR would be contingent on a positive change in the sovereign's propensity to support the bank. Fitch believes this is highly unlikely, although not impossible. VR ADJUSTMENTS The operating environment score of 'bbb' is below the 'a' implied category score due to the following adjustment reason: sovereign rating (negative). The asset quality score of 'bb' is above the 'b and below' implied category score due to the following adjustment reason: loan classification policies (positive). The earnings and profitability score of 'bb+' is below the 'bbb' implied category score due to the following adjustment reason: revenue diversification (negative). ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banca IFIS S.p.A. LT IDR BB+ Affirmed BB+ ST IDR B Affirmed B Viability bb+ Affirmed bb+ Government Support ns Affirmed ns Subordinated LT BB- Affirmed BB- long-term deposits LT BBB- Affirmed BBB- Senior preferred LT BB+ Affirmed BB+ short-term deposits ST F3 Affirmed F3 CASSIA SRL 2022-1: Moody's Affirms Ba3 Rating on EUR47.2MM C Notes ------------------------------------------------------------------ Moody's Ratings has affirmed the ratings of all three classes of notes issued by Cassia 2022-1 S.R.L.: EUR153.4M Class A Notes, Affirmed A2 (sf); previously on Apr 8, 2022 Definitive Rating Assigned A2 (sf) EUR34.8M Class B Notes, Affirmed Baa3 (sf); previously on Apr 8, 2022 Definitive Rating Assigned Baa3 (sf) EUR47.2M Class C Notes, Affirmed Ba3 (sf); previously on Apr 8, 2022 Definitive Rating Assigned Ba3 (sf) RATINGS RATIONALE The affirmation reflects the stable performance of the underlying portfolio. The reported weighted average (WA) debt yield (DY) of the two loans remains strong at 10.8%, while the WA loan-to-value (LTV) ratio has improved to 57.8%, down from 59.9% at closing. This improvement follows the disposal of two properties and an increase in market valuations based on the July 2024 appraisal. Moody's current WA LTV of the two loans stands at 77.4%, down from 78.2% at closing. Moody's current LTV for the Thunder portfolio loan is 79.4% and 73.2% for the Jupiter portfolio loan as compared to 80.4% and 73.2% at closing respectively. As of the May 2025 IPD[1], two properties were sold from the Thunder portfolio, reducing the total number of properties in the portfolio to 18. The proceeds from the disposals were used to top up the liquidity facility and the remaining EUR10.3 million were used to prepay the notes on a pro-rata basis. This principal prepayment has lowered Thunder II's reported LTV to 56.3%, compared to 59.6% at closing. The reported LTV for the Jupiter loan is 57.7%. PERFORMANCE SUMMARY The transaction is backed by two uncrossed loans, with the outstanding balance reduced to EUR224.5 million from EUR236.4 million at closing. These loans are secured against 40 logistics properties across Italy, most of which are strategically located along the country's primary logistics corridors. The sponsor of the loans is Blackstone Real Estate Partners L.P. In August 2022, an unintended redemption occurred, funded by amounts drawn from the liquidity reserve, which led to a temporary reduction in the reserve balance. To address the reduction, the transaction documentation was amended in November 2022 to correct the partial redemption[2]. Among the amendments, it was stipulated that principal receipts from prepayments would be used to replenish the liquidity reserve before being allocated to pay down the notes. Following the recent disposals, the reserve has been fully restored to its intended commitment level and now stands at EUR11.3 million. Furthermore, there was no release premium included as the total disposed property value was below the 10% of market value threshold. The release price mechanism for each loan states that there is no release premium for the first 10% of properties sold by market value (MV), a 105% premium with respect to the subsequent 10% of properties sold, and then 110% thereafter. According to the May 2025 Quarterly Investor Report[1], the Jupiter portfolio, comprising 22 properties, is fully occupied as compared to 6.8% vacancy at closing. The Thunder portfolio has been reduced to 18 properties following two disposals. Despite a decline from its August 2024 peak of 24.8%, the Thunder portfolio's vacancy rate remains relatively high at 20.8%. The elevated vacancy is attributed to ongoing capex works affecting several properties. However, strong sector fundamentals and the enhanced quality of the upgraded properties should support the re-letting. On existing releasing activity, both portfolios exhibit strong reletting spreads over the past year. Moody's value of the properties is approximately 25% lower than the latest reported values as of the May 2025 IPD. Specifically, Moody's values the Thunder II portfolio at 27% below its reported value (adjusted for the disposals), and the Jupiter portfolio at 21% below its reported value. Moody's rating action reflects a base pool expected loss of 1.4% of the current balance. Moody's derive this loss expectation from the analysis of the default probability of the securitised loans (both during the term and at maturity) and the value assessment of the collateral. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "EMEA Commercial Mortgage-backed Securitisations" published in June 2025. Factors that would lead to an upgrade or downgrade of the ratings: Main factors or circumstances that could lead to an upgrade of the ratings are generally (i) an increase in the property values backing the underlying loans, or (ii) a decrease in default risk assessment or (iii) given the exposure to Italy a decrease in sovereign risk. Main factors or circumstances that could lead to a downgrade of the ratings are generally (i) a decline in the property values backing the underlying loans, especially due to prolonged higher than expected vacancy levels in the Thunder portfolio or (ii) an increase in default risk assessment or (iii) given the exposure to Italy an increase in sovereign risk. ILLIMITY BANK: Fitch Hikes LT IDR to 'BB' & Keeps Rating Watch Pos. ------------------------------------------------------------------- Fitch Ratings has upgraded illimity Bank S.p.A.'s Long-Term Issuer Default Rating (IDR) and long-term senior preferred debt to 'BB' from 'BB-'. Fitch has also upgraded by one notch illimity's long-term deposit and Tier 2 ratings. Fitch has maintained the bank's Long-Term IDR and debt ratings on Rating Watch Positive (RWP). The rating actions follow illimity's successful takeover by Banca IFIS S.p.A. (IFIS, BB+/Stable), reaching about 93% of the former's share capital. The change in ownership has led us to withdraw the Government Support Rating (GSR) of 'no support'. This reflects its view that IFIS has now become the primary source of extraordinary support, leading us to assign a Shareholder Support Rating (SSR) of 'bb' and place it on RWP. The RWP on illimity's SSR, Long-Term IDR and debt ratings reflects the potential to equalise the bank's ratings with those of IFIS once Fitch gains more clarity about the merger process on completion of ongoing due diligence. The resolution of the RWP could take longer than Fitch's typical horizon of six months. Fitch has withdrawn the GSR because it no longer considers it relevant to its coverage. Key Rating Drivers Shareholder Support Drives Ratings: illimity's ratings benefit from a moderate probability of support from its new, higher-rated owner following the takeover. Fitch has reflected this likelihood of support by assigning illimity a SSR of 'bb'. In Fitch's opinion, illimity is strategically important to IFIS given its recent acquisition because it adds scale and business diversification to the latter's core businesses. The SSR is one notch below IFIS's Long-Term IDR, reflecting illimity's large relative size and its expectation that the integration process will be challenging and gradual. High Propensity to Support: Fitch believes a default of illimity would create high reputational risk for IFIS, and that the Italian authorities would favour support for illimity from IFIS. In addition, Fitch expects the enlarged group to adopt a combined group resolution plan, which will make support for the subsidiary likely as the group will ultimately operate under a single point-of-entry model. Integration Risks, Large Relative Size: Fitch expects illimity to be merged into IFIS by 2026 and be fully operationally integrated in 2027. However, Fitch considers there to be significant execution risks due to illimity's large size relative to its parent, at about 40% of the combined entity's assets at end-2024, its relatively large number of legal entities and its weak performance record. Illimity's recent wind-down of its non-performing loan business also highlighted valuation risks in its assets, which Fitch believes will need to be carefully managed. Clear Strategic Fit: illimity's acquisition will strengthen IFIS's position as a leader in specialty finance with a focus on SMEs. Both institutions have complementary sector focuses, which should generate significant synergies. This includes expanding product offerings and improving client servicing by integrating high value-added products, like factoring. Viability Rating Unaffected: Fitch does not consider the acquisition to have an immediate significant impact on the standalone credit profile of illimity, so its Viability Rating is unaffected by the rating actions. The key rating drivers of illimity's Viability Rating are outlined in its Rating Action Commentary published on 10 April 2025 (see "Fitch Places illimity on Rating Watch Positive on IFIS's Exchange Offer") Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Illimity's IDRs and SSR would be downgraded if IFIS's Long-Term IDR was downgraded. Fitch will likely remove the ratings from RWP and affirm the ratings if the integration and merger of illimity is significantly delayed, for example due to higher-than-expected execution risks, and assuming illimity remains strategically important to IFIS. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the IDRs and SSR would be contingent on an upgrade of the IFIS's Long-Term IDR. The resolution of the RWP and equalisation of illimity's ratings with its parent's would be contingent on the completion of due diligence after the acquisition and clarity on the timing of the merger. Fitch also expects to withdraw illimity's issuer ratings on completion of the merger into IFIS as the bank will cease to exist as a separate legal entity. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS The RWP on illimity's long-term debt ratings mirrors that on the bank's Long-Term IDR, from which they are notched. The long-term deposit rating of 'BB+' is one notch above the bank's Long-Term IDR given full depositor preference in Italy and the protection offered by large buffers of lower-ranking senior preferred and Tier 2 debt. The uplift also reflects its expectation that the bank will maintain these buffers throughout the integration process. The short-term deposit rating of 'B' is mapped to illimity's 'BB+' long-term deposit rating. Senior preferred debt is rated in line with the bank's Long-Term IDR. This reflects its expectation that illimity will maintain a total debt buffer above 10% of its risk-weighted assets throughout the integration process. Subordinated Tier 2 debt is notched down from illimity's Long-Term IDR because Fitch believes support from IFIS will extend to illimity's bondholders. The subordinated Tier 2 debt is rated two notches below the Long-Term IDR for loss severity to reflect poor recovery prospects. No notching is applied for incremental non-performance risk because write-down of the notes will only occur once the point of non-viability is reached, and there is no coupon flexibility before non-viability. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES The debt ratings are sensitive to changes in the bank's IDRs, from which they are notched. The long-term senior preferred and deposit ratings could be downgraded by one notch if the buffer of unsecured debt fell below 10% of RWAs without prospects of recovery in the medium term. The subordinated debt rating is also sensitive to a change in the notes' notching, which could result from a change in Fitch's assessment of their non-performance relative to the risk captured in the Long-Term IDR. An upgrade of the GSR would be contingent on a positive change in the sovereign's propensity to support the bank. In its view, this is highly unlikely, although not impossible. Public Ratings with Credit Linkage to other ratings illimity's Long-Term IDR and SSR are linked to IFIS's Long-Term IDR. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- illimity Bank S.p.A. LT IDR BB Upgrade BB- ST IDR B Affirmed B Government Support WD Withdrawn ns Shareholder Support bb New Rating Subordinated LT B+ Upgrade B long-term deposits LT BB+ Upgrade BB Senior preferred LT BB Upgrade BB- short-term deposits ST B Rating Watch Maintained B KEPLER S.P.A: Fitch Puts 'B' Final Rating to EUR500M Sr. Sec. Notes ------------------------------------------------------------------- Fitch Ratings has assigned Kepler S.p.A. (Biofarma)'s EUR500 million senior secured notes a final 'B' senior secured rating with a Recovery Rating of 'RR4'. The final rating is in line with the expected rating Fitch assigned to the notes on 23 June. Proceeds have been used to refinance its EUR345 million notes and to partially repay other senior secured debt and the drawn portion of a super senior revolving credit facility (RCF). Biofarma's 'B' Long-Term Issuer Default Rating (IDR) reflects the company's modest size, high leverage and narrow business focus, which are balanced against its established market position as a contract development and manufacturing organisation (CDMO) in nutraceuticals, with a leading global position in the attractive niche probiotics subsector. The Stable Outlook on the IDR reflects its expectation that Biofarma will benefit from structural and profitable growth in its specialist markets, leading to moderately reducing leverage across 2025-2027. Key Rating Drivers Specialist Niche CDMO: The ratings reflect Biofarma's established market positions in the structurally growing niche nutraceutical market as an innovative outsourcing partner for consumer health firms and divisions of pharmaceutical companies. Biofarma produces nutraceutical finished dosage-form products for health supplements, skin cosmetics and associated medical device products. Its key area of expertise is probiotics, a growing market in which it holds a meaningful share in the EU and the US, representing around a third of the company's sales. Its global position in nutraceuticals and probiotics was strengthened with its EU370 million acquisition of US Pharma Labs in 2023, which allowed it to enter the large US market and to become a partner of choice for global clients. The acquisition expanded its manufacturing footprint by adding US and Chinese facilities, including enhanced Chinese sourcing capabilities to support its manufacturing facilities in northern Italy and France. Limited Scale, Concentrated Business: Biofarma's limited scale and diversification, although improved with the recent acquisitions, are mitigated by the technological content and long production cycles of its products and high switching costs for its customers, which protects the business and increases revenue visibility. Fitch estimates that 55% of revenues are derived from specialist and differentiated products, such as probiotics and the more regulated medical devices products. Fitch views its expertise in R&D product development and its state-of-the-art manufacturing as critical to its success as a partner of choice for its larger customers. Capex to Accelerate Growth: Fitch expects Biofarma's organic growth to exceed the mid-single-digit growth of its underlying markets at around 9% over 2025-2027, largely driven by the completion of investments in two new manufacturing facilities in France and the US, which should become operational from 2H25. Resilient Profitability: Fitch views Biofarma's profitability as resilient for a specialist CDMO, reflecting its leadership in differentiated market niches in which it can add value to clients with its specialised product development expertise. In recent years, Biofarma has proven its ability to pass on cost inflation in its specialty business faster than CDMO peers operating in more commoditised markets. Its rating case assumes EBITDA margins will gradually improve towards 23% by 2027 from 19.6% in 2024. This will be driven by positive operating leverage from revenue growth and cost efficiencies from its state-of-the art manufacturing facilities under construction. Expansion Capex Hits FCF: High expansion capex in manufacturing capabilities to support growth (over 11% of sales in 2024) has led to negative free cash flow (FCF) and Fitch expects it to constrain FCF through to 2027. Fitch expects a gradual improvement of FCF, driven by EBITDA expansion, with FCF forecast to improve in 2025 and become mildly positive thereafter. High Leverage to Moderate: Fitch expects Biofarma's EBITDA leverage to improve to 6.4x in 2025 (6.7x in 2024), which is high but consistent with the rating. Its Stable Outlook assumes a prudent financial policy that allows gradual organic deleveraging to 5.5x by 2027, as higher revenue growth and margins drive EBITDA expansion. Selective M&A, Moderate Execution Risks: Fitch anticipates the company will pursue modest bolt-on acquisitions, focusing on targeted technologies and manufacturing capabilities, while expanding its geographical reach outside Italy. This would lead to manageable execution risks. Its rating case assumes an annual M&A of between EUR50 million and EUR100 million over 2025-2027. Fitch would treat higher or aggressive M&A as event risk, particularly if it is financed only by debt rather than debt and equity. Supportive Market Fundamentals: Biofarma benefits from supportive market fundamentals, with non-cyclical volume growth driven by a rising and ageing population and an increasing focus on health, disease prevention and self-medication. The company is also well placed to capitalise on the outsourcing trend of specialist ingredient manufacturing processes in the consumer health market. Peer Analysis Fitch regards capital- and asset-intensive businesses, such as F.I.S. Fabbrica Italiana Sintetici S.p.A. (B/Positive), Roar Bidco AB (Recipharm; B/Stable), European Medco Development 3 Sa.r.l. (Axplora; B-/Stable) and Financiere Top Mendel SAS (Ceva Sante; B+/Stable) as direct peers of Biofarma. They all rely on ongoing investments to grow at pace with or above the market and to maintain operating margins. Biofarma's profitability is similar to that of Axplora and Triley Midco 2 Limited (Clinigen Group, B/Negative), and higher than Recipharm's and F.I.S.'s. Nevertheless, Biofarma is considerably smaller than all its peers. In Fitch's wider pharmaceutical rated portfolio, generic drug manufacturing companies Nidda BondCo GmbH (Stada; B/Stable) and Teva Pharmaceutical Industries Limited (BB+/Stable), are much larger than Biofarma, while asset-light niche pharmaceutical companies outsourcing manufacturing to CDMOs, such as CHEPLAPHARM Arzneimittel GmbH (B/Stable) and ADVANZ PHARMA HoldCo Limited (B/Stable), are similar in size but have better profitability and positive FCF margins in the double digits. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Organic revenue growth of 8%-9% over 2025-2027, supported by new capex projects in France and the US - Annual acquisitions of EUR50 million-100 million over 2025-2027, contributing to further revenue growth - Fitch-defined EBITDA margin improving gradually to 23% in 2027, from 19.6% in 2024 - Working capital inflow of EUR5 million in 2025, followed by outflows of EUR5 million-10 million a year in 2026-2027 - Capex at 11.7% of sales in 2025, then moderating to 9% in 2026 and 7.5% in 2027 - No dividends Recovery Analysis Biofarma's recovery analysis is based on a going-concern (GC) approach, which according to its analysis supports a higher realisable value in financial distress than a balance-sheet liquidation. Financial distress could arise primarily from increased costs or price pressures in a higher-than-expected inflationary environment, or the loss of key contracts from its top customers, which would lead to margin contraction and reduced cash flow generation. Fitch estimates an EBITDA of EUR85 million after restructuring, based on its GC enterprise value (EV) calculation. At this level of EBITDA, Fitch believes the company will be able to continue generating cash, although it would face high pressure given a debt/EBITDA of around 8.0x. The multiple Fitch used for EV calculation is 5.5x EBITDA, the same as in the last review. The multiple reflects increased scale and wider geographic diversification after the US Pharma acquisition. Fitch treats the RCF, which the company increased to EUR135 million from EUR104 million as a part of the refinancing, as it is super senior to the senior secured notes. After deducting 10% for administrative claims and assuming the RCF as fully drawn and super senior to the notes, its principal waterfall analysis generates a ranked recovery in the 'RR4' category for the new senior secured floating-rate notes, leading to a 'B' rating, at the same level as the current IDR. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Unsuccessful implementation of growth strategy, including an M&A approach that increases financial and execution risks - EBITDA margin at or below 20% on a sustained basis - Weakening cash generation, with FCF margins around break-even on a sustained basis - Fitch-calculated gross debt consistently above 6.5x EBITDA - EBITDA interest coverage below 2.0x on a sustained basis Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful implementation of growth strategy, including selective and targeted M&A, leading to increased scale - EBITDA margin at or above 25% on a sustained basis - Continued strong cash generation, with FCF margins in the high single digits on a sustained basis - Fitch-calculated gross debt sustained at or below 4.5x EBITDA - EBITDA interest coverage above 3.0x on a sustained basis Liquidity and Debt Structure Biofarma had EUR9 million of cash on its balance sheet (excluding EUR5 million of Fitch-defined restricted cash) at end-1Q25. The company has access to a fully available increased EUR135 million RCF maturing in September 2029 after the refinancing. In addition, it has an increased EUR200 million capex/acquisition facility, which is fully undrawn. Its senior secured notes mature in December 2029. Fitch expects Biofarma to generate negative FCF in 2025, before turning slightly positive from 2026. Its rating case assumes new acquisitions will mostly be financed with additional debt. Issuer Profile Biofarma is an Italian CDMO specialising in manufacturing health supplements, medical devices and cosmetics, with a leading position in the development and production of probiotics. 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 ----------- ------ -------- ----- Kepler S.p.A. senior secured LT B New Rating RR4 B(EXP) =================== K A Z A K H S T A N =================== FORTEBANK JSC: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed ForteBank JSC's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at at 'BB' with a Stable Outlook. Fitch has also affirmed the Viability Rating (VR) at 'bb'. The ratings affirmation follows Forte's recent announcement that it has agreed to acquire a 100% stake in Kazakhstan-based JSC Home Credit Bank (HCBK; BB-/Stable/bb-). The acquisition will be financed in cash. The bank expects the transaction to close by end-2025, subject to regulatory approval. The affirmation reflects Fitch's view that the bank has substantial rating headroom to absorb anticipated impacts from acquisition and organic rapid credit growth, given the bank's existing solid capital and liquidity buffers, robust profitability and acceptable asset quality. Key Rating Drivers Acquisition Adds Scale: Forte's mid-sized franchise (representing 7% of sector loans as of end-May 2025) could be enhanced by the acquisition of HCBK (2%), a consumer finance monoliner, which may lead Forte to qualify as a domestic systemically important bank (D-SIB). Forte has a universal franchise, with good access to the largest Kazakh corporates, including export-oriented companies, in addition to its focus on consumer finance and SME lending. The banks' possible merger timeline is yet unknown, while integration of HCBK will strengthen Forte's retail product offering. Revenues will remain reliant on net interest income. Higher, Retail-Driven Credit Costs: Fitch estimates the planned acquisition will increase Forte's exposure to high-risk/high-reward consumer finance to 35% of the combined portfolio by end-2025 from 23% of Forte's standalone book at end-1Q25. This would weigh on the group's risk profile and asset quality. Forte's loan impairment charges (LICs; 2.4% of average loans in 2024) were above the sector's, mainly driven by consumer finance, and Fitch expects them to increase to above 3% after consolidation. Credit risks will be softened by HCBK's more effective risk controls in consumer finance than Forte's, while Forte has a conservative risk appetite in corporate and SME lending. Asset Quality Metrics to Weaken: Forte's asset quality is supported by a moderate share of loans in total assets (end-1Q25: 47%), while non-loan assets are mostly investment grade. Forte's impaired loans were a manageable 5% of the book and 87% covered by total reserves. Upon the conclusion of the acquisition, Fitch estimates that loans will account for 60% of the combined assets, the consolidated impaired loans ratio will rise to around 6%, and reserve coverage will decline below 70%, reflecting HCBK's weaker metrics. However, the combined metrics should remain acceptable for the rating level. Robust Performance: The bank's operating profit averaged a strong 6.5% of risk-weighted assets over the past four years. Wide margins, due to Forte's high-margin consumer finance subsector, and adequate operating efficiency resulted in robust pre-impairment profit at 13% of average loans in 2024. This is comfortably above the cost of risk and translates into a strong loss-absorption capacity and a high return on average equity (above 30% over 2022-2024). Integration of HCBK will support the group's performance at current levels, while management budgets only moderate integration costs over 2026. Capital to Decline Significantly: Fitch estimates that Forte's solid Fitch Core Capital (FCC) ratio of 20% at end-1Q25 may fall substantially to 12% by end-2025, driven by Forte's large pre-acquisition dividend payout, aggressive organic growth in 2025, and post-acquisition capital dilution. Fitch expects the group to recover the FCC ratio closer to 14% by end-2026, supported by strong internal capital generation. However, its forecast is contingent on significant growth moderation and full profit retention in 2026, in line with management's guidance. Ample Liquidity: Forte's loans/deposits ratio was a healthy 75%, while short-term wholesale debt repayments are limited. Fitch anticipates the loans/deposits ratio of the consolidated entity will increase, due to HCBK's large wholesale debt, but remain a still reasonable 90%. Forte's liquidity cushion (equal to around 40% of total assets at end-1Q25) is ample to comfortably cover the acquisition price and support the liquidity needs of the combined entity. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Forte's ratings could be downgraded on a sustained weakening of asset quality, profitability and capitalisation beyond Fitch's expectations following the consolidation of HCBK. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upside potential is currently limited. In the medium term, a build-up of the FCC ratio to above 17% on a sustained basis and an extended record of efficient credit risk controls following HCBK's integration could justify an upgrade. This should be combined with a material franchise strengthening alongside a record of business-model stability and strong financial performance. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Forte's National Long-Term Rating of 'A(kaz)' reflects the bank's creditworthiness in local currency relative to that of other issuers in Kazakhstan. Forte's senior unsecured debt, including USD400 million in 7.75% five-year Eurobonds, is rated in line with the bank's Long-Term IDR and National Long-Term Rating, reflecting average recovery prospects in a default. Forte's Government Support Rating (GSR) of 'b-' reflects a limited probability of support from Kazakhstan, given the bank's moderate systemic importance. The significant gap between Forte's GSR and Kazakhstan's sovereign rating captures a patchy record of state support to privately owned Kazakh banks, with bail-ins of certain senior unsecured creditors in the past. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Forte's National Long-Term Rating is sensitive to change in its creditworthiness relative to other Kazakhstani issuers. The bank's senior debt ratings are likely to move in tandem with the Long-Term IDR and National Long-Term Rating. Forte's GSR is sensitive to Fitch's assessment of Kazakhstan's ability and propensity to provide support to the banking sector. Its view on the propensity of Kazakh authorities to provide support to banks is primarily based on the record of state support. VR ADJUSTMENTS The asset quality score of 'bb' is above the 'b & below' category implied score because of the following adjustment reason: non-loan exposures (positive). The earnings and profitability score of 'bb+' is below the 'bbb' category implied score because of the following adjustment reason: revenue diversification (negative). ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- ForteBank JSC LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB Natl LT A(kaz)Affirmed A(kaz) Viability bb Affirmed bb Government Support b- Affirmed b- senior unsecured LT BB Affirmed BB senior unsecured Natl LT A(kaz)Affirmed A(kaz) =================== L U X E M B O U R G =================== ALEXANDRITE LAKE: Fitch Assigns 'B+' Long-Term IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned Alexandrite Lake Lux Holdings S.a.r.l. a first-time Long-Term Issuer Default Rating (IDR) of 'B+' with a Stable Outlook and its planned EUR300 million senior secured bond an expected rating of 'BB-(EXP)' with a Recovery Rating of 'RR3'. The IDR and expected senior secured rating also apply to the co-issuer Savoy Luxembourg Holdings S.à.r.l. (together the co-midcos). The co-midcos jointly own 100% of alstria office AG (alstria). The assignment of the final ratings is contingent on the receipt of final documents conforming to information already reviewed. The consolidated profile of the Brookfield-owned co-midcos, and their subordinated debt, includes alstria. It owns a EUR4.1 billion German non-prime rent income-producing office portfolio, specialising in the refurbishment and repositioning of offices for a portion of its portfolio. The core portfolio has long lease lengths, 93% occupancy, and affordable rents in city centre locations. Key Rating Drivers Key Rating Drivers for alstria Office Portfolio Qualities: alstria's end-2024 portfolio is strategically located in some of Germany's leading office markets: Hamburg (33% by end-2024 value), Düsseldorf (27%), Frankfurt (22%), Stuttgart (11%), and Berlin (8%). Most of these assets are moderate in size, averaging 13,000 sqm, with an affordable rent averaging EUR18.6/sqm/month, with potential upside to market rent and ultimate sale. There is asset concentration with the top 10 assets constituting 33% of end-2024 value. Stabilised assets comprised 93% of the portfolio by value at end-2024, with the balance consisting of refurbishment properties (defined as less than 50% occupancy) office assets. Stabilised Portfolio's Rental Income: alstria's tenant base is robust, with 37% of end-2024 annual rent sourced from public sector entities such as the City of Hamburg, Frankfurt and Berlin or investment-grade companies, some with state links. The portfolio has a solid weighted average unexpired lease term to earliest-break (WALB) of 5.2 years, ensuring longevity of income. Vacancy within the total portfolio is managed at around 8% (by estimated rental value, ERV) reflecting alstria's continuous refurbishment strategy. Worked Assets in Refurbishment Portfolio: alstria has some under-invested assets, often bought at reduced prices, to refurbish and re-let for higher rents when market conditions are conducive. This will increase their capital value. Planned refurbishments do not target prime quality fit-out or prime rents but optimise returns by setting rents appropriate for central urban locations. Switching from single-lets to multi-tenanted buildings creates positive rental tension for future years' lease expiries to optimise (rather than a stale building on a single 15 year lease). Refurbishment Spend and Higher Rents: The success of this strategy is seen in the portfolio's average rent increasing year on year. Individual examples, such as Epplestrasse 225 in Stuttgart and Deutsche-Telekom-Allee 9 in Darmstadt, show that earlier refurbishments increased rents higher than previous levels given the refurbishment cost, with subsequent refurbishments increasing rent levels again. The end-value of a refurbished building's previous-value, plus capex spent to establish higher rent, plus valuation uplift, is the profitable transitional activity of alstria. Managed Vacancy Rate: alstria mitigates the execution risk inherent in refurbishment projects by investing strategically in its portfolio, managing the vacancy rate around 8% (excluding developments). Typically, about 10 projects are underway simultaneously, each averaging EUR25 million-EUR30 million in capex, which helps reduce concentration risk. These projects usually take 2.0-2.5 years from vacancy to re-letting. Capex Planning Flexibility: alstria can time its use of capex, as its assets typically only require limited outlay. Upon lease expiry, alstria has the option to re-let at broadly existing rents or refurbish the property, which increases rental values. Fitch expects the development pipeline will be funded mainly through asset disposals, or with potential equity involvement from Brookfield, to achieve the group's target 50% loan-to-value (LTV) leverage threshold and minimal reliance on further debt. High But Stable Leverage: Fitch expects that alstria's net debt/EBITDA leverage will remain high at around 15x-16x over the next two to three years, but may reduce thereafter should it be able to sell properties. alstria is committed to reducing its LTV ratio to about 50% from 56% at end-2024 over the long term. alstria's interest cover benefits from low-coupon bank and bond debt with 2026-2028 interest coverage forecast about 1.8x. Key Rating Drivers for Alexandrite Lake Lux Holdings S.a.r.l, and Savoy Luxembourg Holdings S.a.r.l. (the Co-MidCos) PSL Rating Approach: Fitch uses its Parent and Subsidiary Linkage (PSL) Rating Criteria reflecting the co-ordinated Brookfield ownership and the co-midcos' control over alstria's strategy. Under its PSL criteria, Fitch assesses alstria's legal ring-fencing as 'porous' reflecting the debt incurrence and maintenance covenants in alstria's public bonds, which limit downside risk. Dividends from alstria are not required to service co-midco debt, which also has liquidity support from its owners. Furthermore, a default of a co-midco will not result in a default on alstria's debt. Fitch has assessed access and control as 'porous' with alstria having external funding and stated financial policy (alstria's LTV target of below 50%, no co-borrowing) conditioned by financial covenants. PSL-Required Consolidated Metrics: With this linkage the criteria guides that the co-midcos' ratings are derived from the consolidated profile, including alstria's figures. Consolidated net debt/EBITDA is 19x-17x, LTV about 60%-63%, and consolidated interest cover narrows to 1.4x by 2027. Co-Midcos' Debt Service: To service the bonds' coupons, co-midcos are reliant on cash dividends from alstria, and/or liquidity under a letter of credit-backed (LOC) mechanism for interest payment shortfalls. Fitch views the six-month LOC interest expense reserve mechanism, supported by the two Brookfield funds, as an accretive initial six months liquidity to cover interest payments for the senior secured bond, should dividends from alstria be interrupted. If the LOC is drawn, Brookfield may be required to renew its commitment to, or top-up, any shortfall in the six-month LOC. alstria Dividend Capacity: Instead of alstria upstreaming a dividend, the ultimate owners expect alstria to deploy its cashflow towards re-investment in higher-yielding property refurbishments. Fitch calculates alstria's dividend capacity ratio (alstria's EBITDA less interest expense and tax/co-midco interest costs), stand-alone interest cover, as comfortably above 2x but the co-midco-level consolidated interest cover tightens to 1.4x by 2027. The high consolidated leverage and tight interest cover frame the co-midcos' ratings. Financial Covenants: Incremental debt at the co-midco level is limited to EUR515 million. As incurrence-based covenants, alstria's public bonds have an LTV ratio below 60% (end-2024: 55%), secured debt/total assets less than 45% (32%) and unencumbered assets/unsecured debt above 150% (186%). alstria's maintenance-based interest coverage is above 1.8x (2.4x). Peer Analysis DEMIRE Deutsche Mittelstand Real Estate AG's (IDR: CCC+) EUR0.8 billion secondary office-weighted portfolio is located in non-CBD areas across Germany. In comparison, alstria's EUR4.1 billion portfolio is also diversified within Germany but is concentrated in the country's top office markets, which have distinct local sector dynamics. This mitigates concentration risk of the single-country focus. alstria offers mid-market rents in or near CBD locations, where demand is stronger than for DEMIRE's non-CBD affordable office space, as reflected in alstria's vacancy rate of 8.6% versus DEMIRE's 18% at end-1Q25. Within Brookfield-owned Alexandrite Monnet UK HoldCo Plc (IDR: B+/Stable), Befimmo's assets are concentrated in Brussels' prime CBD market and have high occupancy, strong rent collection, and a focus on increasing rents and ESG credentials. At end-2023, the tenant base was made up of 53% public sector entities, a proportion unique among indicated Fitch-rated peers. Befimmo's asset quality is higher than alstria's, with half its portfolio younger than 10 years. Although Befimmo's average rent (EUR15/sq m/month) is lower than alstria's (EUR19/sq m/month) due to legacy government leases, its cash flow has greater visibility, reflected in a WALB of 9.5 years compared with alstria's 5.2 years. Sirius Real Estate Limited (IDR: BBB/Stable) invests in secondary German offices, which are strategically located close to key German cities. Sirius's approach to acquiring higher-yielding assets, with a moderate level of capex required, is standardised and has a record of improving cash flow and lease tenors. Sirius has an active in-house leasing team for the German operations. Key Assumptions Fitch's Key Assumptions for alstria - Rental growth from annual indexation of 1.3%-2.0% - Rent increases during 2026-2027 are based on some scheduled refurbishments being let. For 2028 and 2029 Fitch assumes a 10% gross rent yield on improvement capex, and 4.8% yield rent lost from disposals (also producing an annualised effect). - Rental yield on refurbishment capex averages 9.6% - Investment property disposals of EUR80 million in 2025, EUR110 million in 2026, EUR250 million annually thereafter - Total value-enhancing capex of EUR140 million in 2025, EUR104 million-EUR110 million thereafter - Cost of debt for in-place secured loans is based on Fitch's Global Economic Outlook EUR policy; new unsecured debt assumed to be issued at a fixed-rate coupon of 5.5% - Existing interest rate hedging and caps increase alstria's cost of debt by EUR1.5 million-EUR4 million annually Recovery Analysis Its bespoke recovery analysis assumes that the co-midcos would be liquidated rather than restructured as a going concern (GC) in a default. Fitch uses alstria's EUR4,163 million of investment property assets as at 1Q25. Given the inclusion of its undrawn EUR150 million revolving credit facility (RCF) in debt, the drawing of which would most likely add assets, Fitch added the same amount to investment properties, the total of which Fitch applies a standard 20% discount. Additionally, a standard 10% deduction is made for administrative claims. Fitch's principal waterfall analysis measures these proceeds against alstria's end-1Q25 secured debt of EUR1,571.5 million, and unsecured gross debt of EUR978 million plus the longer-dated EUR150 million portion of the undrawn RCF maturing in 2028. Flowing through to the co-midcos level, Fitch's principal waterfall analysis generates a high ranked recovery for the EUR300 million structurally subordinated secured bond. At co-midcos' 'B+' IDR, the senior secured rating is capped at 'RR3'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade (Using Fitch's PSL criteria, co-midcos' IDRs are the same as the consolidated profile) - Deterioration of alstria's operational and financial profile - Co-midco consolidated net debt/EBITDA above 18x - Co-midco consolidated LTV above 65% - Co-midco standalone interest coverage below 1.2x (alstria EBITDA less interest expense/co-midco interest expense) Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Material Improvement in the consolidated profile including alstria's operational and financial profile - Co-midco consolidated net debt/EBITDA below 14x - Co-midco consolidated LTV below 55% - Co-midco standalone interest coverage above 1.45x Liquidity and Debt Structure alstria's end-2024 average debt maturity was relatively short at 2.8 years, with EUR335.2 million of unsecured debt and EUR107 million of secured debt maturities during 2025. The weighted average debt ratio improves to about four years pro forma for the new EUR500 million unsecured bond issued in March 2025 which partly prepaid some tendered unsecured 2025, 2026 and 2027 unsecured bonds, along with new secured funding incurred in 1H25. As at end-March 2025, after 1Q25's refinancing, alstria has EUR200 million undrawn from its RCFs (of which EUR50 million matures in April 2026 and the remainder in April 2028), EUR146 million of unrestricted cash relative to EUR84.4 million of September 2025 bonds remaining outstanding, and a EUR107m secured loan due end-August 2025, which is to be refinanced. Co-midco liquidity resources are detailed above. 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 ----------- ------ -------- Alexandrite Lake Lux Holdings S.a r.l. LT IDR B+ New Rating senior secured LT BB-(EXP) Expected Rating RR3 Savoy Luxembourg Holdings S.a r.l. LT IDR B+ New Rating senior secured LT BB-(EXP) Expected Rating RR3 MILLICOM INTERNATIONAL: Fitch Affirms 'BB+' LT IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Millicom International Cellular, S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+' with a Stable Rating Outlook. In addition, Fitch has affirmed Millicom's senior unsecured debt at 'BB+'. Millicom International Cellular S.A.'s ratings reflect its geographic diversification, strong brand recognition and network quality, which support the company's leading positions in key markets, robust subscriber base and solid operating cash flow generation. Millicom's ratings are constrained by the operating environments of its operating subsidiaries, which contribute significant upstream cash flows. The Stable Outlook reflects Fitch Ratings' expectation that the company will maintain consolidated net leverage below 3.5x despite potential inorganic acquisitions, adhere to its established financial policy, and continue to demonstrate market leadership in its key markets. Key Rating Drivers Weak Operating Environment: Millicom's ratings are constrained by the challenging operating environments in the Latin American countries where it operates. These environments are characterized by weak systemic governance, relatively low sovereign ratings and vulnerability to economic shocks, resulting in more volatile political, regulatory, and economic conditions. Strong Market Positions: Millicom maintains leading market positions, ranking either No. 1 or No. 2 in most of its markets. Fitch expects Millicom to retain these positions, supported by superior network quality, extensive coverage, and strong B2B operations. Its leading market positions underpin robust EBITDA margins of around 37% and stable FFO margins of approximately 25%, which are consistent with investment-grade peers. These strengths also position the company to capitalize on growth opportunities in underserved mobile data and fixed broadband segments. Solid FCF Before Dividend: Fitch expects Millicom's strong free cash flow (FCF) before dividends of around USD780 million in 2025, supported by improved operational performance and lower capex intensity. This cash flow is expected to be largely upstreamed, with dividend distributions estimated in USD760 million in 2025. Positive FCF is projected over the medium term, supported by strong cash flow from operations (CFO), capex intensity in the 11%-14% range, and dividend distributions that remain subject to compliance with the company's net leverage target of 2.5x. Limited Leverage Impact of Acquisitions: Fitch expects Millicom to sustain net leverage below 3.5x in the medium term, consistent with a 'BB+' rating. The potential acquisitions in Colombia, Ecuador and Uruguay should have a limited impact of 0.5x in net leverage. These transactions would represent a total investment of around USD1.82 billion. Net leverage is expected to decline to 2.5x post-acquisitions, in line with company's leverage target. This reduction is supported by higher EBITDA from cost initiatives and increased revenues. Inorganic Growth to Improve Diversification: Millicom's ongoing acquisition processes in Colombia, Ecuador, and Uruguay are intended to capitalize on strategic opportunities to enhance the company's footprint in South America, expanding into countries with favorable economic fundamentals. These acquisitions will strengthen Millicom's network position and consolidate its status as the second-largest operator in each market, with expected market shares between 30% and 40% upon completion. The transactions are anticipated to close in late 2025 or first quarter 2026, subject to regulatory approvals. Standalone Rating: Despite Iliad Holding S.A.S.'s (BB/Positive) current 40% indirect ownership stake in Millicom and considering its classification as an unrestricted subsidiary, Fitch rates Millicom on a standalone basis. This approach reflects the high proportion of publicly listed shares, the composition of Millicom's board of directors, separate external funding, independence in treasury operations, and the absence of guarantees or cross-defaults. Fitch will continue to monitor for any changes in ownership structure that could affect Millicom's financial policy or funding structure. Peer Analysis Millicom's credit profile is comparable to regional telecommunications peers in the 'BB' rating category based on a solid financial profile and operational scale and diversification, as well as strong positions in key markets, offset by high concentration in countries with low sovereign ratings in Latin America, which tend to have more volatile economic environments. Millicom has a stronger financial profile than diversified integrated telecom operators in the region, such as Cable & Wireless Communications Limited (BB-/Stable), supporting a higher rating. Millicom's leverage is moderately higher than that of Empresa de Telecomunicaciones de Bogota, S.A., E.S.P. (BB+/Negative), but it benefits from a stronger business profile that has leading market positions in multiple markets. Millicom also has a stronger financial structure and business profile than Axtel S.A.B. de C.V. (BB-/Stable), a Mexican fixed-line operator as well as Colombia Telecomunicaciones S.A. E.S.P. BIC (BB+/Stable), an integrated Colombian telecom operator. Compared with investment-grade operators, such as Chile's Empresa Nacional de Telecomunicaciones S.A. (Entel, BBB-/Stable), Millicom has stronger profitability but a somewhat weaker leverage profile. Millicom is rated below Entel due in part to its operating environments and the sources of its dividends, as well as its weaker leverage profile. Key Assumptions - Reduction of 4.3 % in revenue in 2025 due to the devaluation process in Bolivia and low-single-digit growth in the following years. Mobile subscribers with average growth of 1.5% to 2% growth and low-single-digit growth in ARPU; - Fixed business revenues with low-single-digit growth due to the low-single-digit reduction in ARPU offset by the increase in the subscriber base; - EBITDA margins of Millicom without new acquisitions moving to 38% in the medium term (36.9% in 2024) due to the implementation of cost savings improvements and general stabilization in competitive pressures across Millicom's key markets; - EBITDA margins including Ecuador and Uruguay will be sustained around 37%; - Inorganic acquisitions of Uruguay and Ecuador closed at the end of 2025 and beginning to consolidate in 2026. Colombia acquisitions not included, waiting for regulatory approvals; - SBA transaction completed in 2025. Cash inputs for USD975 million before taxes; - Average capex/sales (including spectrum) of approximately 12% in 2024, trending toward 14% over the medium term; - Dividend Distribution: Interim dividend USD1 /share paid in January 2025, USD3/share in four equal installments (in July 2025, October 2025, January 2026 and April 2026), and USD2.5/share in two equal installments in October 2025 and April 2026. In the medium term, dividends will be subject to compliance with the leverage targets. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Consolidated total adjusted net debt/EBITDA at 3.5x or above and lease-adjusted net debt/EBITDAR at 4.5x or above; - (CFO - capex)/debt sustained below 7.5% on a sustained basis; - Holding company debt/upstream cash flows received consistently above 4.5x; - A change in financial policy could have negative implications for Millicom's ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An improvement in the operating environments of the Millicom group, particularly in Guatemala; - Total adjusted net debt/EBITDA of 2.5x or below and lease-adjusted net debt/EBITDAR of 3.5x or below sustained over the rating horizon; - (CFO - capex)/debt sustained above 12.5%. Liquidity and Debt Structure Millicom demonstrates a robust liquidity position, with substantial cash reserves that fully cover its short-term debt. As of March 31, 2025, the consolidated group's readily available cash stood at USD582 million, comfortably covering its reported short-term debt obligations of USD254 million. In addition, the company has access to a USD600 million undrawn revolving credit facility. The LATI transaction, related to the sale of about 7,000 towers in Guatemala, Honduras, Panama, El Salvador and Nicaragua to SBA Communications Corporation (SBA) for approximately USD975 million, will improve Millicom's financial flexibility in the short term. Fitch anticipates no liquidity issues for either the operating companies or the holding company, given the operating companies' stable cash flow generation and consistent cash transfers to the holding company. Millicom's solid track record in accessing capital markets when external financing is needed further underpins its effective liquidity management. The company has a strategy in place to refinance obligations in USD to local currencies to reduce the exposition to FX volatility. Issuer Profile Millicom is a diversified telecom operating in nine Latin American countries under the Tigo brand. It provides B2C mobile services, B2C fixed telephony, pay TV and broadband services, B2B fixed and mobile services, and mobile finance solution services. Summary of Financial Adjustments - Lease adjustments. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Millicom International Cellular S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed BB+ ========= S P A I N ========= CAIXABANK PYMES 11: Moody's Ups Rating on EUR318.5MM B Notes to B1 ------------------------------------------------------------------ Moody's Ratings has upgraded the rating of one note in CAIXABANK PYMES 11, FONDO DE TITULIZACION. The rating action reflects the stable collateral performance observed, the further deleveraging of the outstanding senior notes and the very low likelihood of prolonged interest shortfall. Moody's affirmed the rating of the note that had sufficient credit enhancement to maintain their current rating. Maximum achievable rating is Aa1 (sf) for structured finance transactions in Spain, driven by the corresponding local currency country ceiling of the country. EUR2131.5M (Current outstanding amount EUR48.5m) Series A Notes, Affirmed Aa1 (sf); previously on Jun 22, 2022 Affirmed Aa1 (sf) EUR318.5M Series B Notes, Upgraded to B1 (sf); previously on Jun 22, 2022 Upgraded to B2 (sf) RATINGS RATIONALE The rating action is prompted by stable collateral performance observed, the further deleveraging of the outstanding senior notes and the very low likelihood of prolonged interest shortfall. Revision of Key Collateral Assumptions: As part of the rating action, Moody's reassessed Moody's expected default rate and recovery rate assumptions for the portfolio reflecting the collateral performance to date. The performance of the transaction has continued to be stable over the last year. 90 days plus arrears currently stand at 1.95% of current pool balance showing a decreasing trend over the past year. Cumulative defaults currently stand at 1.95% of original pool balance up from 1.77% a year earlier. Moody's have considered the increased borrower concentration by applying an additional stress to the pool default rate of 30% resulting in an expected default rate of 8.5%. Moody's also assumed a stochastic recovery rate of 37%. Moody's reassessed Moody's SME Stressed Loss assumption for this transaction. SME Stressed Loss captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. As a result, Moody's have assessed the SME Stressed Loss assumption at 32.2%. Moody's have incorporated the sensitivity of the ratings to borrower concentrations into the quantitative analysis. In particular, Moody's considered the credit enhancement coverage of large debtors in the transaction as it shows significant exposure to large debtors. Increase in Available Credit Enhancement Sequential amortization led to the increase in the credit enhancement available in this transaction. For instance, the credit enhancement for the most senior tranche affected by the rating action increased to 91.9% from 31.1% since the last rating action. Counterparty Exposure The rating actions took into consideration the notes' exposure to relevant counterparties, such as servicer or account bank. The principal methodology used in these ratings was "SME Asset-backed Securitizations" published in June 2025. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement, (3) improvements in the credit quality of the transaction counterparties and (4) a decrease in sovereign risk. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. =========== T U R K E Y =========== SEKERBANK T.A.S: Fitch Puts 'CCC' Final Rating to $200MM AT1 Notes ------------------------------------------------------------------ Fitch Ratings has assigned Sekerbank T.A.S.'s (Sekerbank; B/Positive/b) USD200 million additional Tier 1 (AT1) capital notes a final rating of 'CCC' with a Recovery Rating of 'RR6'. The final rating is the same as the expected rating affirmed on July 16, 2025. Key Rating Drivers The rating assigned to the notes is three notches below Sekerbank's 'b' Viability Rating, in accordance with Fitch's "Bank Rating Criteria." Fitch has only notched the debt rating three times from Sekerbank's VR (twice for loss severity and only once for non-performance risk), instead of the baseline four notches, due to rating compression as Sekerbank's VR is below the 'BB-' anchor rating threshold. The 'RR6' Recovery Rating reflects poor recovery prospects in a default. The notes are Basel-III compliant, perpetual, deeply subordinated, fixed rate resettable AT1 debt securities. The notes will have fully discretionary non-cumulative interest payments and be subject to full or partial write-down if the issuer or group's common equity Tier 1 (CET1) ratio falls below 5.125%. The principal write-down can be reinstated and written up at the issuer's discretion if a positive distributable net profit is recorded. The notes will also be subject to permanent partial or full write-down on the occurrence of a non-viability event (NVE). An NVE is when it becomes probable that the bank will become non-viable as determined by the local regulator, the Banking and Regulatory Supervision Authority (BRSA). The bank will be deemed non-viable should it reach the point at which the BRSA determines its operating license is to be revoked and the bank liquidated or the rights of the bank's shareholders (except to dividends), and the management and supervision of the bank are transferred to the Savings Deposit Insurance Fund on the condition that losses are deducted from the capital of existing shareholders. The notes have no fixed maturity, although Sekerbank will have the option (subject to BRSA approval) to repay the notes from the fifth anniversary of the issue date to and including the first reset date, or on any interest payment date thereafter. Sekerbank's consolidated regulatory CET1 and Tier 1 ratios were 18.4% at end-1Q25, including regulatory forbearance on foreign currency risk-weighted assets, well above its regulatory minimum requirements of 7.0% and 8.5%, respectively. Excluding regulatory forbearance, the ratios would have been 17.7% and 17.8%, respectively. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade As the notes are notched down from Sekerbank's VR, their rating is sensitive to a downgrade of the VR. The notes' rating is also sensitive to an unfavorable revision of Fitch's assessment of incremental non-performance risk. This may result, for example, from a sharp decline in capital buffers relative to regulatory requirements. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The notes' rating is sensitive to an upgrade of Sekerbank's VR. Date of Relevant Committee 16-Jul-2025 ESG Considerations The ESG Relevance Score for Management Strategy of '4' reflects an increased regulatory burden on all Turkish banks. Management's ability across the sector to determine their own strategy and price risk is constrained by increased regulatory interventions and by the operational challenges of implementing regulations at the bank level. This has a moderately negative impact on the credit profile and is relevant to the rating in combination 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 ----------- ------ -------- ----- Sekerbank T.A.S. Subordinated LT CCC New Rating RR6 CCC(EXP) =========================== U N I T E D K I N G D O M =========================== ABILJO EXCAVATOR: PKF Smith Cooper Named as Joint Administrators ---------------------------------------------------------------- Abiljo Excavator Services Limited was placed into administration proceedings in the Business and Property Courts of England and Wales, No 003708 of 2025, and Dean Anthony Nelson and Emily Louise Oliver of PKF Smith Cooper were appointed as joint administrators on July 10, 2025. Its registered office and principal trading address is at Unit 315 Fauld Industrial Estate, Tutbury, Burton-On-Trent, Staffordshire, DE13 9HS. The joint administrators can be reached at: Emily Louise Oliver Dean Anthony Nelson PKF Smith Cooper Prospect House, 1 Prospect Place, Pride Park, Derby Derbyshire, DE24 8HG Telephone: 01332 332021 For further information contact Stanley Bottrill Smith Cooper Tel No: 01332 332021 Email: stanley.bottrill@pkfsmithcooper.com Prospect House, 1 Prospect Place Pride Park, Derby, DE24 8HG BRAVEJOIN COMPANY: Marshall Peters Named as Administrator --------------------------------------------------------- Bravejoin Company Limited was placed into administration proceedings in the High Court of Justice, Court Number: CR2025MAN000987, and Lee Morris of Marshall Peters was appointed as administrator on July 19, 2025. Bravejoin Company Limited, trading as Archers Steelwork & Cladding, offered specialised construction activities. Its registered office is at c/o Marshall Peters, Heskin Hall Farm, Wood Lane, Heskin, Preston, Lancashire, PR7 5PA. Its principal trading address is at Unit 4 Felspar Road, Amington Industrial Estate, Tamworth, B77 4DP. The administrator can be reached at: Lee Morris Marshall Peters Heskin Hall Farm, Wood Lane Heskin, Preston, PR7 5PA Telephone: 01257 452021 For further information contact: Judd Bennett Marshall Peters Heskin Hall Farm, Wood Lane, Heskin, Preston, PR7 5PA Tel No: 01257 452021 Email: juddbennett@marshallpeters.co.uk C-TRG RESOURCE: FRP Advisory Named as Administrators ---------------------------------------------------- C-TRG Resource Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in London, Company and Insolvency List (ChD) Court Number: CR-2025-004792, and Martyn Rickels and Anthony Collier of FRP Advisory Trading Limited, were appointed as joint administrators on July 12, 2025. C-TRG Resource Limited was a temporary employment agency. Its registered office is at c/o FRP Advisory Trading Ltd, 4th Floor, Abbey House, 32 Booth Street, Manchester, M2 4AB. Its principal trading address is at 1 Smithy Court, Wigan, WN3 6PS. The joint administrators can be reached at: Martyn Rickels Anthony Collier FRP Advisory Trading Limited 4th Floor, Abbey House 32 Booth Street, Manchester M2 4AB Further details, contact: The Joint Administrators Tel No: 0161 833 3344 Alternative contact: Kade Doherty Email: cp.manchester@frpadvisory.com CHALLENGE LOGISTICS: FRP Advisory Named as Administrators --------------------------------------------------------- Challenge Logistics Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in London, Insolvency & Companies List (ChD) Court Number: CR-2025-004793, and Martyn Rickels and Anthony Collier of FRP Advisory Trading Limited, were appointed as administrators on July 12, 2025. Challenge Logistics specialized in freight transport by road; as well as an temporary employment agency. Its registered office is at 1 Smithy Court, Smithy Brook Road, Wigan, Greater Manchester, WN3 6PS in the process of being changed to c/o FRP Advisory Trading Ltd, 4th Floor, Abbey House, 32 Booth Street, Manchester, M2 4AB. Its principal trading address is at 1 Smithy Court, Smithy Brook Road, Wigan, Greater Manchester, WN3 6PS. The joint administrators can be reached at: Martyn Rickels Anthony Collier FRP Advisory Trading Limited 4th Floor, Abbey House Booth Street, Manchester M2 4AB Further details, contact: The Joint Administrators Tel No: 0161 833 3344 Alternative contact: Kade Doherty Email: cp.manchester@frpadvisory.com CHALLENGE RECRUITMENT: FRP Advisory Named as Administrators ----------------------------------------------------------- Challenge Recruitment Group Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in London, Company and Insolvency List (ChD) Court Number: CR-2025-004796, and Martyn Rickels and Anthony Collier of FRP Advisory Trading Limited, were appointed as joint administrators on July 12, 2025. Challenge Recruitment Group specialized in activities of head offices. Its registered office is at 1 Smithy Court, Smithy Brook Road, Wigan, Greater Manchester, WN3 6PS in the process of being changed to c/o FRP Advisory Trading Ltd, 4th Floor, Abbey House, 32 Booth Street, Manchester, M2 4AB. Its principal trading address is at 1 Smithy Court, Smithy Brook Road, Wigan, Greater Manchester, WN3 6PS. The joint administrators can be reached at: Martyn Rickels Anthony Collier FRP Advisory Trading Limited 4th Floor, Abbey House 32 Booth Street, Manchester M2 4AB Further details, contact: The Joint Administrators Tel No: 0161 833 3344 Alternative contact: Kade Doherty Email: cp.manchester@frpadvisory.com CHALLENGE-TRG RECRUITMENT: FRP Advisory Named as Administrators --------------------------------------------------------------- Challenge-Trg Recruitment Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in London, Insolvency & Companies List (ChD) Court Number: CR-2025-004798, and Martyn Rickels and Anthony Collier of FRP Advisory Trading Limited, were appointed as joint administrators on July 12, 2025. Challenge-Trg Recruitment was a temporary employment agency. Its registered office is at 1 Smithy Court, Smithy Brook Road, Wigan, Greater Manchester, WN3 6PS in the process of being changed to c/o FRP Advisory Trading Ltd, 4th Floor, Abbey House, 32 Booth Street, Manchester, M2 4AB. Its principal trading address is at 1 Smithy Court, Smithy Brook Road, Wigan, WN3 6PS. The joint administrators can be reached at: Martyn Rickels Anthony Collier FRP Advisory Trading Limited 4th Floor, Abbey House 32 Booth Street, Manchester M2 4AB Further details, contact: The Joint Administrators Tel No: 0161 833 3344 Alternative contact: Kade Doherty Email: cp.manchester@frpadvisory.com EIGHT ASSET MANAGEMENT: Antony Batty Named as Administrators ------------------------------------------------------------ Eight Asset Management (Eightam) Limited was placed into administration proceedings in the High Court of Justice Court Number: CR-2025-004711, and Hugh Jesseman and William Antony Batty of Antony Batty & Company LLP, were appointed as administrators on July 11, 2025. Eight Asset Management specialized in property management. Its registered office is at 9 Astra Centre, Edinburgh Way, Harlow, CM20 2BN. The administrators can be reached at: Hugh Jesseman William Antony Batty Antony Batty & Company LLP 3 Field Court, Gray's Inn London, WC1R 5EF For further details contact: Mamata Paudel Tel No: 020 7831 1234 Email at mamata@antonybatty.com FINASTRA LIMITED: Moody's Assigns 'B3' CFR, Outlook Stable ---------------------------------------------------------- Moody's Ratings assigned a B3 corporate family rating and a B3-PD probability of default rating to Finastra Limited (Finastra). Concurrently, Moody's assigned B3 ratings to Finastra USA, Inc.'s senior secured first lien bank credit facilities (including the proposed $450 million revolver, $2,400 million US term loan, and EUR600 million Euro term loan) as well as a Caa2 rating to Finastra USA, Inc.'s proposed $500 million senior secured second lien term loan. The outlook of Finastra and Finastra USA, Inc. is stable. The proposed loans will be used to repay Finastra's existing privately placed debt. Governance considerations were a driver of the rating, including the company's elevated leverage and controlled ownership. Moody's anticipates that proceeds from Finastra's announced sale of its TCM business will be used to repay privately placed debt. Moody's expects the impact of this repayment coupled with the earnings loss of the asset sale to have minimal leverage impact. RATINGS RATIONALE Finastra's CFR reflects very high leverage, which has not materially improved following Misys' debt-funded acquisition of D+H Corporation in 2017. It also reflects the constraining impact a high cash interest expense has on free cash flow, for a company that otherwise generates good EBITDA margins. Moody's views overall growth potential as relatively low. The large sum of preferred shares in the capital structure is credit negative as Moody's believes that the company may opportunistically redeem the preferred shares with new debt issuance to reduce equity dilution and the high-cost of the PIK notes. Finastra's CFR is supported by its leading position in the financial services software market, strong gross and net revenue retention rates, and growing portion of recurring revenues across business units. Finastra's diverse international footprint and product portfolio also support the credit profile. Access to the proposed $450 million revolving credit facility will support liquidity, and cash flow generation will benefit from good EBITDA margins and interest savings. The stable outlook reflects Moody's expectations that Finastra will grow revenue in the low-single digit percent range in the next 12-18 months. It also reflects Moody's expectations that the company will delever to under 8x in the same timespan on the back of operating leverage and disciplined cost management. Moody's expects FCF generation such that FCF/Debt will be in the low single digit percent range, although note that the continued wind down of the company's prior EPP program has constrained cash generation for the fiscal year ended May 2025. The stable outlook assumes cash generation in fiscal year ended May 2026. Forward free cash generation will be supported by the reduction of the impact of the EPP wind down as well as reduced cash interest expense following the refinancing transaction. Finastra's adequate liquidity is supported by the proposed undrawn $450 million revolving credit facility and $185 million of cash as of May 2025. Moody's expects the company to be able to generate low-single digit percent FCF/Debt in the next 12-18 months. Finastra will have no material maturities until 2030. Marketing terms for the new credit facilities (final terms may differ materially) include the following: incremental 1st lien debt capacity up to the greater of $750 million and 100% of consolidated EBITDA, plus unlimited amounts subject to the greater of a First Lien Leverage Ratio and leverage neutral incurrence. Amounts up to the greater of $750 million and 100% of consolidated EBITDA, plus any debt not initially incurred under the first lien incremental incurrence test, plus any first lien incremental facilities incurred in connection with a permitted acquisition or investment and any term loan A facility, may be incurred with an inside maturity date. Amounts up to the greater of $750 million and 100% of consolidated EBITDA can be incurred as Permitted Alternative Security Debt, guaranteed by non-loan parties or secured by non-collateral. There is a guarantor coverage requirement of 80% of group Consolidated EBITDA. There are no "blocker" provisions which prohibit the transfer of special assets to unrestricted subsidiaries. There are no protective provisions restricting an up-tiering transaction. Asset sale proceeds (excluding the TCM sale) may be used by the company to prepay intercompany debt. Amounts up to the unused capacity from the general investment basket, plus the general basket for prepayments of subordinated debt plus 100 % of unused capacity from the restricted payment covenant may be reallocated to incur debt. The capital structure is portable to a Permitted Acquiror subject to ratings reaffirmation and other conditions. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Finastra's credit impact score of CIS-4 reflects its exposure to governance risks as a result of its controlled ownership and high financial leverage. The existence of preferred shares in the capital structure also creates the risk of redemption via debt. These governance considerations are reflected in the company's issuer profile score of G-4. Social risks include dependence on highly skilled technology talent and risk of reputational harm from cybersecurity breaches and data privacy concerns, as reflected by the assigned issuer profile score of S-3. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company generates continuous organic revenue and EBITDA growth, Moody's-adjusted debt/EBITDA is reduced below 6.5x, and Moody's-adjusted FCF/debt is sustained above the mid-single digit percent range. Ratings could be downgraded if the company is unable to generate positive FCF in a year, organic revenue or EBITDA growth is negative, Moody's-adjusted debt/EBITDA exceeds 8x on a sustained basis, or liquidity deteriorates. Finastra is a financial services software provider that offers a broad range of solutions to over 6,000 banks and financial institutions located across 135 countries. The group was formed as a result of the acquisition of D+H Corporation by Misys in June 2017. Finastra and its legacy entity Misys have been owned by the specialist financial sponsor Vista Equity Partners (Vista) since 2012. The company generates more than $1,500 million in revenue. The principal methodology used in these ratings was Software published in June 2022. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. IMPALA BIDCO: Moody's Cuts CFR to B3, Under Review for Downgrade ---------------------------------------------------------------- Moody's Ratings has downgraded Impala Bidco Limited's (Acacium Group, or the company) corporate family rating to B3 from B2 and the Probability of Default Rating to B3-PD from B2-PD. Concurrently, Moody's downgraded to B3 from B2 the ratings of the existing GBP375 million senior secured first lien term loan B due 2028 (GBP TLB), of the GBP45 million senior secured first lien revolving credit facility due 2027 (RCF) both issued by Impala Bidco 0 Limited and of the $140 million senior secured first lien term loan B due 2028 (USD TLB) issued by ICS US Holdings Inc. The ratings for Acacium Group and ICS US Holdings Inc. have been placed on review for downgrade. Previously, the outlook on both entities was stable. RATINGS RATIONALE The rating action reflects the continued material contraction of Acacium Group's activities during the course of 2025, which Moody's expects to lead to a more than 30% reduction in Moody's adjusted EBITDA for the full year compared to Moody's previous forecast of February 2025. Moody's expects demand for interim staff by NHS England to no longer recover in 2025. The recent publication of the NHS Government Spending Review (Phase 2) at the end of June and the thank you note from the Secretary of State for Health and Social Care in early June to the NHS trusts for the ongoing effort to reduce temporary staffing expenditures, reinforce Moody's expectations that NHS trusts must reduce their spend on agency staffing by at least 30% in the next financial year. At this point, Moody's views the ongoing pressure within NHS England to limit the use of interim agencies as a structural change of the healthcare contingent staffing market, which is likely to cause the exit of a number of smaller players as well as less segregation between NHS "interim bank" and agency contingent workers. The Acacium Group remains well positioned in such environment given its ability to offer managed services solutions and via Xyla (Acacium Group's digital healthcare and community services division), a key differentiator to other staffing agencies. Xyla is the better performing business division within Acacium Group. Moody's also continues to expect the company will benefit from ongoing externalization of a number of services to private health companies to carry out additional treatment for NHS patients. The Acacium Group, however, has to continue to adjust its cost base downwards and Moody's expects this to complete by the end of 2025 with full benefits emerging only in 2026. The cost restructuring will put pressure on the company's ability to generate a positive Moody's adjusted free cash flow in 2025. Moody's estimates Moody's adjusted debt to EBITDA to be above 11x in 2025 and to remain well above 6.0x still in 2026. However, management has indicated earlier in the year that a number of disposals could be initiated to improve liquidity and reduce debt outstanding. Acacium Group's B3 ratings continue to be supported by its (1) leading position in a fragmented market; (2) long term growth in demand for healthcare services with supportive demographics in its core markets (UK, US, Australia), alongside structural and sustained staff shortages; (3) diversified offering that include life sciences, the provision of community based and digital healthcare service solutions and a growing international presence, all contributing to a reduced reliance on NHS England Acacium Group's ratings, however, are constrained by (1) revenue generation remaining highly dependent on NHS England, which faces pressure from increased demand and unsustainable cost structure; (2) potential risks of technological disruption through disintermediation or more efficient procurement practices; (3) the combination of a Moody's adjusted EBITDA to Interest of about 1.0x and an elevated Moody's adjusted debt to EBITDA at above 11.0x that Moody's expects for the full year 2025. LIQUIDITY Acacium Group's liquidity position remains adequate. The company had GBP22.2 million of cash on balance sheet and a fully undrawn GBP45 million RCF, as of May 31, 2025. The RCF has a springing first lien net leverage covenant being tested only when the RCF's drawn amount exceeds 40% of commitment; Moody's estimates the facility will not be drawn until maturity in 2027 as the company has sufficient availability from a number of asset backed facilities which are used to manage intra-year working capital movements and tend to be repaid in full by year end. Moody's expects Moody's adjusted free cash flow to be negative in 2025, largely due to exceptional costs to deliver cost out commitments in terms of reduced headcount and property footprint. Acacium Group's debt maturity profile remains favorable, with the next scheduled debt repayment in 2028 when the senior secured first lien term loan B mature. STRUCTURAL CONSIDERATIONS The GBP TLB and USD TLB, together with the RCF rank pari-passu and are rated in line with the CFR reflecting a senior only financing structure. RATIONALE FOR THE OUTLOOK Moody's review will focus on the timing and the use of proceeds from potential disposals and the business profile of Acacium Group after disposals Additionally, Moody's will continue to monitor Acacium Group's progress in adapting its business model to how best serve the healthcare contingent work market in the UK , together with Xyla and the Life Sciences division which could post a positive revenue growth in 2025. The ratings could be confirmed at the current level if Moody's see a reversal of the weakening trend in the first five months of 2025 and the company cash flow generation is sufficient to service its current debt obligations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review for downgrade indicate that a ratings downgrade is unlikely over the next 12-18 months. The ratings could however be upgraded following a sustained period of stable volumes and profitability, with a continued increase in scale of services not related to Last Minute Nursing in the UK. An upgrade would also require a Moody's-adjusted Debt to EBITDA ratio below 5.5x and Moody's-Adjusted FCF/Debt above 3%. The ratings could be downgraded upon conclusion of the review if Moody's expects Moody's adjusted interest to EBITA to deteriorate below 1.0x on sustainable basis, or Moody's-adjusted Debt to EBITDA to remain above 6.5x by the end of 2026, or the company's liquidity weakens. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in November 2021. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Acacium Group, a leading global healthcare and life science delivery partner with services and staffing operations across four continents. Acacium Group is headquartered in London and since September 2020 is majority-owned by Onex Partners. The company has a market leading position as supplier of temporary staff to NHS England and after acquiring USA based Favorite, in December 2021, it is one of the top 10 healthcare staffing firms in the country. WILLIAMS CONTRACT: Bailams & Co Named as Administrator ------------------------------------------------------ A Williams Contract Services Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in Wales, Insolvency and Companies List (ChD) Court Number: CR-2025-004255, and Michelle Williams of Bailams & Co was appointed as administrator on June 23, 2025. A Williams Contract, trading as a Williams Contract Services, specialized in site preparation and other specialized construction activities. Its registered office and principal trading address is at Ty Mari, Heol Horeb, Llandysul, Ceredigion, SA44 4JN. The administrator can be reached at: Michelle Williams Bailams & Co Ty Antur, Navigation Park, Abercynon, CF45 4SN Further details contact: Bailams & Co Tel No: 01443 749768 Email: michelle@bailams.co.uk alicia@bailams.co.uk ********* 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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