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250829.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, August 29, 2025, Vol. 26, No. 173 Headlines F I N L A N D LAKEA: Files for Bankruptcy After Failed Restructuring G E O R G I A GEORGIA CAPITAL: S&P Alters Outlook to Pos., Affirms 'BB-' ICR MICROBANK CRYSTAL: Fitch Affirms Then Withdraws 'B' Long-Term IDR G E R M A N Y REVOCAR UG 2021-2: Moody's Affirms Ba1 Rating on EUR3.8MM D Notes I R E L A N D BAIN CAPITAL 2022-2: Fitch Assigns 'B-sf' Rating on Class F-R Notes BAIN CAPITAL 2022-2: S&P Assigns BB- (sf) Rating to E-R-R Notes S P A I N BBVA CONSUMER 2025-1: Moody's Assigns (P)Ba1 Rating to 2 Tranches U N I T E D K I N G D O M ANANAS ANAM: Leonard Curtis Appointed as Joint Administrators ARGO BLOCKCHAIN: Stock Plunges Deeper as Insolvency Fears Intensify BRICKS SILVERSTONE: In Administration GRADE (UK) LIMITED: Enters Administration MIZEN DEVELOPMENTS: Falls Into Administration TUNHAM LIMITED: KR8 Appointed as Joint Administrators VICTORIA PLC: S&P Cuts LT ICR to 'SD' on Distressed Debt Exchange X X X X X X X X [] BOOK REVIEW: Bailout: An Insider's Account of Bank Failures - - - - - ============= F I N L A N D ============= LAKEA: Files for Bankruptcy After Failed Restructuring ------------------------------------------------------ Helsinki Times reports that the property development company Lakea has filed for bankruptcy at the Pohjanmaa District Court on August 26, 2025, following years of worsening financial problems and rising debt obligations. In a statement, the company confirmed that it will also withdraw earlier restructuring applications submitted in May on behalf of 24 housing cooperatives operated under its Omaksi model, notes the report. The firm said the decision followed a lack of support from key creditors. According to Helsinki Times, board members of both Lakea and its Omaksi housing subsidiaries announced their resignations the same day. The Lakea Group includes subsidiaries such as Lakea Kiinteistot, Lakea Kiinteistokehitys, and Lakea Palvelut. These entities will continue operations despite the parent company's bankruptcy filing, according to the statement, relates the report. The court is expected to process the application within a week, Helsinki Times discloses. Lakea stated that the bankruptcy will not immediately affect existing tenants or residents in its Omaksi properties. A court-appointed estate administrator will review contracts and determine the legal standing of each agreement once proceedings begin. The report recounts that the company has faced mounting financial pressure in recent years, driven in part by sharply increased financing costs. In the summer, creditors filed separate bankruptcy petitions against 24 of Lakea's Omaksi housing cooperatives due to unpaid debts. Lakea's business model combined renting with gradual home ownership, says the report. Tenants entered into agreements by paying an upfront seven percent of the property's value, then lived in the unit as renters while incrementally acquiring ownership through continued payments. In May, the company submitted restructuring applications aimed at salvaging both the parent company and its affiliated housing units, recalls Helsinki Times. The goal, according to Lakea, was to protect the rights of residents, partners, and staff more effectively than through bankruptcy. However, support from creditors never materialized. In July, law firm Heikkila & Co announced it had filed a criminal complaint on behalf of 235 individuals connected to the Lakea case, the report relates. According to police, most of the complainants were residents of the housing companies now involved in the bankruptcy process. Detective Chief Inspector Sakari Palomäki of the Ostrobothnia Police said a preliminary investigation had been opened to determine whether any criminal conduct took place, the report relays. He confirmed that over 200 individuals had already been identified as potential injured parties. Some residents claim they were misled by the company's financial structure and have been unable to recover funds paid under the rent-to-own scheme, the report adds. ============= G E O R G I A ============= GEORGIA CAPITAL: S&P Alters Outlook to Pos., Affirms 'BB-' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook on Georgia-based investment holding company Georgia Capital JSC to positive from stable and affirmed its 'BB- ' ratings on the company and its $150 million senior unsecured bond. The positive outlook indicates that S&P could raise the rating over the next 12 months, if Georgia Capital establishes a track record of deleveraging, such that its LTV ratio remains materially below 10% under any market circumstances, while demonstrating conservative financial policies that strengthen its capital structure over time, alongside continuing robust asset performance. Georgia Capital JSC continues to perform well, with its portfolio value up 20.8% as of June 30, 2025, to Georgian lari (GEL) 4.54 billion (about $1.69 billion) compared to year-end 2024, thanks to considerable appreciation of Lion Finance Group's share price, which rose by 56% during this period. Given the company's focus on relatively prudent leverage, S&P believes it can maintain a S&P Global Ratings-adjusted loan-to-value (LTV) ratio well below 10%, after about 7% at year-end 2024 (excluding future share buybacks and investments), strong value creation, and a reducing net capital commitment ratio, targeted at 10% over the cycle (reduced from 15%). In the first half of 2025, Georgia Capital's portfolio value increased by 20.8% compared to the end of 2024, to GEL4.53 billion (about $1.69 billion). The growth was driven predominantly by Georgia Capital's largest and only listed shareholding, Lion Finance Group, offset by the exercise of a put option on the water utility business (Georgia Global Utilities JSC). The share price of Lion Finance Group has risen by about 75% over the past 12 months, supported more recently by strong operating performance of Bank of Georgia in Georgia and Ameriabank in Armenia and the continued appreciation of the pound sterling against the lari (up 4.4% in the second quarter of 2025). Lion Finance Group also benefits from sound liquidity of its shares given its inclusion in the Stoxx 600 Index. Lion Finance Group's strong underlying operating performance is likely to continue in the medium term, with solid macroeconomic fundamentals in Georgia and Armenia, though S&P believes potential impacts from political uncertainty may affect valuations. The portfolio's value was affected by Georgia Capital's sale of a 20% stake in Georgia Global Utilities, which reflected GEL188 million in value for listed and observable assets. The private portfolio increased by GEL65.8 million, largely supported by value creation of GEL80.4 million and offset by GEL16.8 million of dividend payments. Overall, the private asset portfolio recorded a relatively stable operating performance, with value creation in the retail (pharmacy), health care, and insurance businesses of 4.2%-5.1%, with some offset in the emerging and other companies' portfolio, which comprises mainly the education and renewable energy businesses, as well as some other smaller businesses. S&P said, "We view as positive that the company's reported net asset value (NAV) grew by 23.7% in the first half of 2025. In previous years, we have seen an increase in Georgia Capital's NAV from GEL2.9 billion in 2021 to GEL4.5 billion as of June 30, 2025 (up by about 55%)." S&P said, "We believe that, overall, Georgia Capital's portfolio will continue to experience robust value growth in the medium term, though political instability could be a key drag on the valuations. We expect strong real annual GDP growth in Georgia of 7.1% in 2025 after 9.4% in 2024, with 8.3% posted for the first six months of 2025, year on year. This will remain driven primarily by private, domestic consumption, with particularly resilient services demand. We project the growth will moderate to 5.2% in 2026, reflecting a slowdown in consumption and a decline in investment, largely attributed to diminished investor confidence due to political volatility and the EU's decision to suspend Georgia's accession process. Net foreign direct investment inflows falling to 4.1% of GDP in 2024, the lowest level recorded since 2001 (excluding the pandemic years), is a sign of this trend. This also led to some depreciation of the lari. "We expect Georgia Capital to maintain relatively low leverage supported by disciplined debt management. Following the exercise of its put option on the water utility business, Georgia Capital has stated that it intends to redeem at least $50 million of its $150 million local bonds in September 2025. We see this as a continuation of the company's commitment to deleveraging, and we expect to see further partial redemptions to gradually reduce the outstanding debt. Georgia Capital has also reduced its target net capital commitment (NCC) ratio over the cycle to 10%, from 15%. The NCC ratio stood at 7% at the end of the first half of 2025, down from 12.8% at the end of 2024 and 15.6% at the end of 2023. The NCC ratio will guide the company's approach to capital allocation, which includes share buybacks and new investments An NCC ratio of 10%-40% will result in tactical share buybacks or investments, an NCC ratio below 10% could generate more substantial share buybacks or investments, and an NCC ratio above 40% would lead the company to switch to a cash preservation strategy. Given its currently low NCC ratio, Georgia Capital announced a new share buyback program of $50 million program in 2025 to be completed over the next nine months. The company's NCC ratio includes planned investments, announced share buybacks, and a contingency/liquidity buffer. As a result, our adjusted LTV ratio for Georgia Capital at the end of 2024 stood at about 7% (excluding future share buybacks or potential equity investments that are uncommitted). At the same time, we anticipate that the company can navigate through relatively volatile market conditions that could affect the valuation of its assets while keeping its S&P Global Ratings-adjusted LTV ratio well below 25%. "We see an improvement in Georgia Capital's business risk, since the share of listed assets has risen, but still view the concentration in Georgia and only one listed asset comprising about 47.5% of the portfolio value as key constraints. All of Georgia Capital's private assets are based in Georgia, with Lion Finance Group, which makes up about 47.5% of the total portfolio and of which Georgia Capital holds close to an 18% stake, the only listed asset. Georgia Capital is likely to gradually reduce its holding in Lion Finance Group to prevent it from becoming a passive foreign investment company, which could have tax implications for U.S. shareholders. Nevertheless, we would expect to see the share of listed assets remain structurally above 40% for upside to the rating. The holding in Lion Finance Group was valued at GEL2.2 billion on June 30, 2025. Following the exercise of the put option on the water utility and the share price performance of Lion Finance Group, the weight of listed assets has increased significantly, though we note that Lion Finance Group is the only listed asset. Therefore, any impacts from weakening operating performance that translates into share price volatility could materially affect the portfolio's value. The remaining portfolio assets are unlisted and in Georgia. This, in our view, could limit Georgia Capital's ability to quickly monetize its investments to repay debt, which could be important if liquidity unexpectedly becomes constrained. We estimate that the weighted average creditworthiness of investee companies is 'B+'. Georgia Capital's largest assets are Lion Finance Group, retail (pharmacy; 18% of the total portfolio), health care services (10.6%), and insurance (property and casualty and medical; 10.2%). However, the company is well diversified by industry, in our view, with investments in banking, pharmaceuticals, health care, insurance, utilities, real estate, hospitality, private education, and renewable energy generation, and we expect the company to focus on these sectors in future investments." The NAV per share discount has reduced to its lowest level since the pandemic, which supports the share buyback program, but does not materially weaken the LTV ratio. The NAV per share discount currently stands at about 34%, down from 47% at the end of 2024, which has supported the recent announcement of the GEL700 million capital return program. Despite this, S&P expects Georgia Capital will continue to balance its repurchases and investments in the future. In addition, Georgia Capital being based in Georgia, remains exposed to fluctuations in the U.S. dollar exchange rate because its outstanding debt is a $150 million bond due in August 2028. However, the bond's outstanding balance is expected to gradually reduce, and the company's cash dividends are predominantly received in lari. However, Lion Finance Group pays its dividends in pounds sterling, which made up about 35% of total dividend and interest income in 2024, and there remains some foreign exchange risk with the operating assets generating revenue largely in Georgian lari and Armenian dram). Buyback dividends from Lion Finance Group made up a further 35%. Also, the renewable energy business has cash flows in U.S. dollars and consequently pays dividends in hard currency, which represents about 5% of the total cash dividend and interest income Georgia Capital received in 2024. There is also a forward currency hedge for the coupon payment, which mitigates a portion of the risk. S&P said, "The recent exercise of the put option on the water utility business supports Georgia Capital's liquidity, and we expect dividend income will continue to increase in 2025 and 2026. Georgia Capital received cash proceeds of $70.4 million from the sale of its minority stake, supporting its liquidity profile. We anticipate that cash interest and dividends in 2025 will total about GEL180 million–GEL200 million, after GEL209 million in 2024. Dividends from the retail pharmacy business have reduced significantly since 2023, though there may be higher dividends from Lion Finance Group, following its acquisition of Ameriabank, with a target payout ratio of 30%-50% of annual profits. Cash interest expense is expected to be about GEL35 million per year. As a result, Georgia Capital's cash adequacy ratio should be close to 3.0x in 2025 and exceed 3.5x in 2026. Refinancing risk, for the moment, is well under control because the company's only liability is due in August 2028, and the amount outstanding is expected to reduce over time. Georgia Capital's 20% holding in the beer and distribution business remain subject to a put/call structure, and the put option can be exercised as a pre-agreed enterprise value to EBITDA multiple in 2029-2031. "The positive outlook reflects the view that we expect Georgia Capital's LTV ratio, over time, to remain materially below 10%, its cash adequacy ratio to remain above 3.0x, and the value of its portfolio's underlying assets will continue to rise. "We could revise the outlook to stable if Georgia Capital does not demonstrate a commitment to maintaining a conservative capital structure, with an LTV below 10%." This would most likely result from a material weakening of equity values, large negative currency fluctuations, or material share buybacks, signaling a more aggressive stance toward leverage. Rating pressure could also result from a material deterioration of the credit quality of any of Georgia Capital's core investments, or increased volatility in the value of its listed asset, which could erode the portfolio's value and increase the likelihood of needing financial support, for example, through fresh capital or shareholder loans. S&P said, "We could raise the ratings if Georgia Capital establishes a track record of deleveraging, such that its LTV ratio remains materially below 10% under any market circumstances. An upgrade will hinge on the company demonstrating a commitment to conservative financial policies aimed at strengthening its capital structure over time. These include, but are not limited to, keeping a long-dated debt maturity profile and active foreign currency management. We would also expect to see greater diversification and material portfolio rotation in the business, with increasing ownership of minority listed and highly liquid stakes, such that listed assets in the portfolio contain materially more than 40% of highly liquid stocks on a structural basis." MICROBANK CRYSTAL: Fitch Affirms Then Withdraws 'B' Long-Term IDR ----------------------------------------------------------------- Fitch Ratings has affirmed JSC Microbank Crystal's (Crystal) Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook and subsequently withdrawn its ratings. Fitch has withdrawn the entity's ratings for commercial reasons. Therefore, Fitch will no longer provide ratings or analytical coverage of the issuer. Key Rating Drivers Prior to its withdrawal, Crystal's IDR reflected its robust profitability, underpinned by a solid net interest margin, reasonable asset quality metrics and adequate capitalisation. The ratings were constrained by Crystal's niche franchise, specialised in unsecured micro and consumer lending, predominantly in rural regions of Georgia, and reliance on wholesale funding, as deposit accumulation following its transition to a microbank, will only be gradual. For further details of the key rating drivers for Crystal's IDR, see 'Fitch Affirms Microbank Crystal at 'B'; Outlook Stable', dated 19 June 2025). RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Not applicable as the ratings have been withdrawn Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Not applicable as the ratings have been withdrawn. ESG Considerations Crystal has an ESG Relevance Score of '4' for Exposure to Social Impacts due to its business model being focused on the under-banked population, which facilitates access to funding from international financial institution. This has a positive impact on Crystal's credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- JSC Microbank Crystal LT IDR B Affirmed B LT IDR WD Withdrawn ST IDR B Affirmed B ST IDR WD Withdrawn LC LT IDR B Affirmed B LC LT IDR WD Withdrawn LC ST IDR B Affirmed B LC ST IDR WD Withdrawn ============= G E R M A N Y ============= REVOCAR UG 2021-2: Moody's Affirms Ba1 Rating on EUR3.8MM D Notes ----------------------------------------------------------------- Moody's Ratings has upgraded the ratings of six Notes in RevoCar 2021-2 UG (haftungsbeschränkt), RevoCar 2022 UG (haftungsbeschraenkt) and RevoCar 2023-1 UG (haftungsbeschraenkt). The rating action reflects the increased levels of credit enhancement for the affected Notes. Moody's affirmed the ratings of the Notes that had sufficient credit enhancement to maintain their current ratings. Issuer: RevoCar 2021-2 UG (haftungsbeschrankt) EUR460.7M Class A Notes, Affirmed Aaa (sf); previously on Oct 21, 2021 Assigned Aaa (sf) EUR25.5M Class B Notes, Upgraded to Aa1 (sf); previously on Oct 21, 2021 Assigned Aa3 (sf) EUR7.5M Class C Notes, Upgraded to A2 (sf); previously on Oct 21, 2021 Assigned Baa2 (sf) EUR3.8M Class D Notes, Affirmed Ba1 (sf); previously on Oct 21, 2021 Assigned Ba1 (sf) Issuer: RevoCar 2022 UG (haftungsbeschraenkt) EUR452.4M Class A Notes, Affirmed Aaa (sf); previously on Dec 19, 2024 Affirmed Aaa (sf) EUR21M Class B Notes, Affirmed Aa1 (sf); previously on Dec 19, 2024 Affirmed Aa1 (sf) EUR5M Class C Notes, Upgraded to Aa1 (sf); previously on Dec 19, 2024 Upgraded to Aa2 (sf) EUR6.5M Class D Notes, Upgraded to Aa2 (sf); previously on Dec 19, 2024 Upgraded to A2 (sf) Issuer: RevoCar 2023-1 UG (haftungsbeschraenkt) EUR455M Class A Notes, Affirmed Aaa (sf); previously on Dec 19, 2024 Affirmed Aaa (sf) EUR21.4M Class B Notes, Upgraded to Aa1 (sf); previously on Dec 19, 2024 Upgraded to Aa2 (sf) EUR6.6M Class C Notes, Upgraded to A1 (sf); previously on Dec 19, 2024 Upgraded to A2 (sf) EUR8.1M Class D Notes, Affirmed Ba1 (sf); previously on Dec 19, 2024 Upgraded to Ba1 (sf) RATINGS RATIONALE The rating action is prompted by an increase in credit enhancement for the affected tranches. For RevoCar 2023-1 UG (haftungsbeschraenkt), even though collateral quality weakened, as indicated by the metrics observed, this is counterbalanced by the increase in available credit enhancement. 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. RevoCar 2021-2 UG (haftungsbeschränkt) Total delinquencies have increased in the past year, with 90 days plus arrears currently standing at 1.58% of current pool balance up from 0.59% a year earlier. Cumulative defaults currently stand at 1.19% of original pool balance up from 0.78% a year earlier. Moody's maintained the default probability assumption at 1.59% based on the current portfolio balance, which translates to a default probability assumption of 1.58% based on the original portfolio balance. Moody's maintained the recovery rate assumption at 30.00% and have decreased the PCE to 8.00%, from 9.00%. RevoCar 2022 UG (haftungsbeschraenkt) Total delinquencies have increased in the past year, with 90 days plus arrears currently standing at 2.19% of current pool balance up from 0.58% a year earlier. Cumulative defaults currently stand at 1.19% of original pool balance up from 0.75% a year earlier. Moody's maintained the default probability assumption at 1.70% based on the current portfolio balance, which translates to a default probability assumption of 1.75% based on the original portfolio balance. Moody's maintained the recovery rate assumption at 35.00% and PCE at 8.00%. RevoCar 2023-1 UG (haftungsbeschraenkt) Total delinquencies have increased in the past year, with 90 days plus arrears currently standing at 1.65% of current pool balance up from 0.64% a year earlier. Cumulative defaults currently stand at 1.12% of original pool balance up from 0.42% a year earlier. For this transaction, Moody's have increased the default probability assumption to 1.80% from 1.49% based on the current portfolio balance, which translates to a default probability assumption of 2.01% based on the original portfolio balance. Moody's maintained the recovery rate assumption at 35.00% and PCE at 8.00%. Increase in Available Credit Enhancement Sequential amortization led to the increase in the credit enhancement available in these transactions. For RevoCar 2021-2 UG (haftungsbeschränkt), the credit enhancement for the most senior tranche affected by the upgrade action, the Class B Notes, increased to 6.92% from 2.76% since closing. For RevoCar 2022 UG (haftungsbeschraenkt), the credit enhancement for the most senior tranche affected by the upgrade action, the Class C Notes, increased to 12.66% from 8.95% since the last rating action in December 2024. For RevoCar 2023-1 UG (haftungsbeschraenkt), the credit enhancement for the most senior tranche affected by the upgrade action, the Class B Notes, increased to 9.10% from 5.20% since the last rating action in December 2024. Counterparty Exposure Moody's considered how the liquidity available in the transactions and other mitigants support continuity of note payments, in case of servicer default (servicer is Bank11 fuer Privatkunden und Handel GmbH, not rated). While Class A benefits from liquidity in the form of a reserve fund, respectively, there is no liquidity support for Classes B to D. As a result, the rating of the Class B and Class C notes in RevoCar 2022 UG (haftungsbeschraenkt) are constrained by operational risk. The principal methodology used in these ratings was "Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS" 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, and (3) improvements in the credit quality of the transaction counterparties. 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. ============= I R E L A N D ============= BAIN CAPITAL 2022-2: Fitch Assigns 'B-sf' Rating on Class F-R Notes ------------------------------------------------------------------- Fitch Ratings has assigned Bain Capital Euro CLO 2022-2 DAC's refinancing notes final ratings and affirmed the class F-R notes, as detailed below. Entity/Debt Rating Prior ----------- ------ ----- Bain Capital Euro CLO 2022-2 DAC A-R XS2747195241 LT PIFsf Paid In Full AAAsf B-1 R XS2747195597 LT PIFsf Paid In Full AAsf B-2 R XS2747195753 LT PIFsf Paid In Full AAsf C-R XS2747195910 LT PIFsf Paid In Full Asf Class A-RR XS3152565340 LT AAAsf New Rating AAA(EXP)sf Class B1-RR XS3152567635 LT AAsf New Rating AA(EXP)sf Class B2-RR XS3152567809 LT AAsf New Rating AA(EXP)sf Class C-RR XS3152565696 LT Asf New Rating A(EXP)sf Class D-RR XS3152565852 LT BBB-sf New Rating BBB-(EXP)sf Class E-RR XS3152566074 LT BB-sf New Rating BB-(EXP)sf D-R XS2747196132 LT PIFsf Paid In Full BBB-sf E-R XS2747196306 LT PIFsf Paid In Full BB-sf F-R XS2747196561 LT B-sf Affirmed B-sf Transaction Summary Bain Capital Euro CLO 2022-2 DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans, first-lien last-out loans and high-yield bonds. The existing notes, except for the class F notes and the subordinated notes, were refinanced. The portfolio is actively managed by Bain Capital Credit, Ltd. The collateralised loan obligation (CLO) will exit its reinvestment period in July 2028. The weighted average life test is about seven years. KEY RATING DRIVERS 'B'/'B-' Portfolio Credit Quality: Fitch places the average credit quality of obligors at 'B'/'B-'. The weighted average rating factor (WARF) of the identified portfolio, as calculated by Fitch, is 25.2. High Recovery Expectations: 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-calculated weighted average recovery rate (WARR) of the current portfolio is 60.9%. Diversified Portfolio: The transaction includes one updated Fitch matrix, effective at closing, corresponding to a 6.9-year WAL test covenant, a fixed-rate asset limit at 10% and a top 10 obligor concentration limit at 26.5%. The transaction includes various concentration limits in the portfolio, 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. Affirmation of Non-Refinanced Notes: The class F notes are affirmed at their current rating with Stable Outlook. Transaction Inside Reinvestment Period: The transaction is within its reinvestment period, which expires in July 2028, and the manager can reinvest principal proceeds and sale proceeds subject to compliance with the reinvestment criteria. Given the manager's ability to reinvest, Fitch's analysis is based on a stressed portfolio, which it tested the notes' achievable ratings across the matrices, since the portfolio can still migrate to different collateral quality tests. Cash Flow Analysis: The WAL used for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL covenant at the refinancing closing date but subject to a floor of six years, to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing the coverage tests and the Fitch 'CCC' bucket limitation test after reinvestment, and a WAL covenant that progressively steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade An increase of the default rate (RDR) by 25% of the mean RDR and a decrease of the recovery rate (RRR) by 25% at all rating levels in the current portfolio would have no impact on the class A-RR notes, lead to downgrades of up to two notches for class B-1RR notes to class E-RR notes and to below 'B-sf' for the class F-R notes. Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than assumed due to unexpectedly high levels of defaults and portfolio deterioration. The class B-1RR, B-2RR, and D-RR to F-R notes each have a rating cushion of two notches, and the class C-R notes have a cushion of one notch, due to the better metrics and shorter life of the current portfolio than the Fitch-stressed portfolio. Should the cushion between the current portfolio and the Fitch-stressed portfolio be eroded, either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of three notches for the class A-RR notes, four notches each for the class B-1RR to B-2RR notes, and two notches each for the class C-RR to D-RR debt, and to below 'B-sf' for the class E-RR and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A reduction of the RDR by 25% of the mean RDR and an increase in the RRR by 25% at all rating levels in the Fitch-stressed portfolio would result in upgrades of up to three notches for all notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than-expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Bain Capital Euro CLO 2022-2 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. BAIN CAPITAL 2022-2: S&P Assigns BB- (sf) Rating to E-R-R Notes --------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Bain Capital Euro CLO 2022-2 DAC's class A-R-R, B-1-R-R, B-2-R-R, C-R-R, D-R-R, and E-R-R notes. At the same time, S&P affirmed its rating on the existing class F-R notes and withdrew its ratings on the original class A-R, B-1-R, B-2-R, C-R, D-R, and E-R notes. At closing, the issuer had unrated class M and subordinated notes outstanding from the existing transaction. On Aug. 27, 2025, Bain Capital Euro CLO 2022-2 DAC refinanced the existing class A-R, B-1-R, B-2-R, C-R, D-R, and E-R notes (originally issued in February 2024) through an optional redemption and issued replacement notes of the same notional. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over Euro Interbank Offered Rate (EURIBOR) than the original notes. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,832.43 Default rate dispersion 550.56 Weighted-average life (years) 4.41 Obligor diversity measure 170.06 Industry diversity measure 22.57 Regional diversity measure 1.22 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 4.79 Actual target 'AAA' weighted-average recovery (%) 36.23 Actual weighted-average spread (net of floors; %) 3.81 Actual weighted-average coupon 4.16 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end on July 22, 2028. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used a EUR395.43 million adjusted target par collateral principal amount, which is lower than the target par amount of EUR400 million. This is because the portfolio features debt issued by Altice France S.A., which we downgraded to 'CC' on Feb. 28, 2025. As a result, we applied a 40% recovery rate at the 'AAA' rating level, carrying the initial position of EUR2.65 million at EUR1.07 million. This also reflects a negative cash position of EUR4.00 million in the transaction. "We used the portfolio's actual weighted-average spread (3.81%), actual weighted-average coupon (4.16%), and the actual portfolio weighted-average recovery rates (WARR) for all rated notes, except the class A-R-R notes, where we used the covenanted WARR of 35.23%. "We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-1-R-R, B-2-R-R, C-R-R, D-R-R, and E-R-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these refinanced notes. "For the class A-R-R notes, our credit and cash flow analysis indicate that the available credit enhancement could withstand stresses commensurate with the assigned rating. "For the class F-R notes, our credit and cash flow analysis indicate that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, and affirmed our 'B- (sf)' rating on this class of notes." The ratings uplift for the class F-R notes reflects several key factors, including: -- The class F-R notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated break-even default rate at the 'B-' rating level of 22.13% (for a portfolio with a weighted-average life of 4.41 years), versus if it was to consider a long-term sustainable default rate of 3.2% for 4.41 years, which would result in a target default rate of 14.11%. -- S&P does not believe that there is a one-in-two chance of this tranche defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with the assigned 'B- (sf)' rating. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A-1 loan and class A-R-R, B-1-R-R, B-2-R-R, C-R-R, D-R-R, E-R-R, and F-R notes. "In addition to our standard analysis, to provide an indication of how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A-R-R to E-R-R notes based on four hypothetical scenarios." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings Ratings assigned Replacement Original notes notes Amount interest interest Credit Class Rating* (mil. EUR) rate§ rate enhancement (%) A-R-R AAA (sf) 248.00 3mE + 1.25% 3mE + 1.355% 37.28 B-1-R-R AA (sf) 34.00 3mE + 2.00% 3mE + 2.40% 26.16 B-2-R-R AA (sf) 10.00 4.95% 5.75% 26.16 C-R-R A (sf) 22.00 3mE + 2.60% 3mE + 305% 20.59 D-R-R BBB- (sf) 27.00 3mE + 3.70% 3mE + 4.30% 13.76 E-R-R BB- (sf) 19.00 3mE + 6.10% 3mE + 6.94% 8.96 Rating affirmed Class Rating* Amount (mil. EUR) Notes interest rate§ F-R B- (sf) 12.00 3mE + 9.10% *The ratings assigned to the class A-R-R, B-1-R-R, and B-2-R-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R-R, D-R-R, and E-R-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. ========= S P A I N ========= BBVA CONSUMER 2025-1: Moody's Assigns (P)Ba1 Rating to 2 Tranches ----------------------------------------------------------------- Moody's Ratings has assigned provisional ratings to Notes to be issued by BBVA CONSUMER AUTO 2025-1 FONDO DE TITULIZACION: EUR920M Class A Floating Rate Asset Backed Notes due May 2042, Assigned (P)Aa1 (sf) EUR40M Class B Floating Rate Asset Backed Notes due May 2042, Assigned (P)A3 (sf) EUR35M Class C Floating Rate Asset Backed Notes due May 2042, Assigned (P)Baa3 (sf) EUR5M Class D Floating Rate Asset Backed Notes due May 2042, Assigned (P)Ba1 (sf) EUR5M Class Z Floating Rate Asset Backed Notes due May 2042, Assigned (P)Ba1 (sf) RATINGS RATIONALE The transaction is a static cash securitisation of auto loans extended to obligors in Spain by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) (A3(cr)/P2(cr), A3 Senior Unsecured, A2 LT Bank Deposits) with the purpose of financing new or used vehicles via car dealers (prescriptores). BBVA also acts as asset servicer, swap counterparty, collection and issuer account bank provider. The provisional portfolio of underlying assets consists of auto loans originated in Spain, with fixed rates and a total outstanding balance of approximately EUR1,361.1M. The final portfolio will be selected at random from the provisional portfolio to match the final Class A to D Notes issuance amounts. The reserve fund will be funded to 0.5% of the Class A to D Notes balance at closing and the total credit enhancement for the Class A Notes will be 8.50%. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. The transaction benefits from credit strengths such as the granularity of the portfolio, the excess spread-trapping mechanism through a 6 months artificial write-off mechanism, the high average interest rate of 7.9% and the financial strength and securitisation experience of the originator. Moreover, Moody's note that the transaction features some credit weaknesses such as a complex structure including interest deferral triggers for junior Notes, pro-rata payments on all asset-backed Notes from the first payment date, the high linkage to BBVA and limited liquidity available in case of servicer disruption. Various mitigants have been put in place in the transaction structure such as sequential redemption triggers to stop the pro-rata amortization. Hedging: All the loans are fixed-rate loans, whereas the Notes are floating-rate liabilities. As a result, the issuer is subject to a fixed-floating interest-rate mismatch. To mitigate the fixed-floating rate mismatch, the issuer has entered into a swap agreement with BBVA. Under the swap agreement, (i) the issuer pays a fixed rate of [ ]%, (ii) the swap counterparty pays 3M Euribor and (iii) the notional as of any date will be the outstanding balance of Classes A to D Notes. Moody's analysis focused, amongst other factors, on: (i) an evaluation of the underlying portfolio of auto loans and the eligibility criteria; (ii) historical performance provided on BBVA's total book and past auto loan ABS transactions and performance of previous BBVA auto deals; (iii) the credit enhancement provided by subordination, excess spread and the reserve fund; (iv) the liquidity support available in the transaction by way of principal to pay interest; and (v) the overall legal and structural integrity of the transaction. MAIN MODEL ASSUMPTIONS Moody's determined a portfolio lifetime expected mean default rate of 3.8%, expected recoveries of 40.0% and portfolio credit enhancement ("PCE") of 11.5%. The expected mean default rate and recoveries capture Moody's expectations of performance considering the current economic outlook, while the PCE captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. Expected defaults and PCE are parameters used by us to calibrate its lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model to rate auto ABS. Portfolio expected mean default rate of 3.8% is in line with recent Spanish auto loan transaction average and is based on Moody's assessments of the lifetime expectation for the pool taking into account (i) historic performance of the loan book of the originator, (ii) performance track record on the most recent BBVA auto deals, (iii) benchmark transactions, and (iv) other qualitative considerations. Portfolio expected recoveries of 40.0% are higher than recent Spanish auto loan average and are based on Moody's assessments of the lifetime expectation for the pool taking into account (i) historic performance of the loan book of the originator, (ii) benchmark transactions, and (iii) other qualitative considerations. The PCE of 11.5% is lower than other Spanish auto loan peers and is based on Moody's assessments of the pool taking into account the relative ranking to originator peers in the Spanish auto loan market. The PCE of 11.5% results in an implied coefficient of variation ("CoV") of 65.0%. The principal methodology used in these ratings was "Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS" 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 of the Notes would be: (1) better than expected performance of the underlying collateral; or (2) a lowering of Spain's sovereign risk leading to the removal of the local currency country ceiling. Factors or circumstances that could lead to a downgrade of the ratings would be: (1) worse than expected performance of the underlying collateral; (2) deterioration in the credit quality of BBVA; or (3) an increase in Spain's sovereign risk leading to a lower local currency country ceiling. =========================== U N I T E D K I N G D O M =========================== ANANAS ANAM: Leonard Curtis Appointed as Joint Administrators ------------------------------------------------------------- Ananas Anam UK Limited fell into administration last week, with Neil Bennett and Alex Cadwallader of Leonard Curtis appointed as joint administrators, according to Business Sale Report. Ananas Anam UK Limited is a London-based provider of low impact textile solutions. In accounts for the year to December 31 2023, the company's fixed assets were valued at GBP4.4 million and current assets at around GBP2 million, with net assets amounting to GBP5.3 million. ARGO BLOCKCHAIN: Stock Plunges Deeper as Insolvency Fears Intensify ------------------------------------------------------------------- James Morales, writing for ccn.com, reports that shares in the embattled Bitcoin miner, Argo Blockchain, tumbled more than 20% on Friday, Aug. 22, after the company announced that it had failed to negotiate terms for a bailout loan. Argo remains locked in talks with Growler Mining, a potential white knight investor, but has warned that without fresh capital or a refinancing deal, it may soon have to enter insolvency proceedings, notes the report. In a market update on Aug. 22, Argo said that while the parties are working diligently toward finalizing the terms of the Plan, there can be no assurance of reaching a deal, the report relates. "Should the Plan not be consummated, the Company and its subsidiaries will pursue other alternatives, which may include formal insolvency processes," the report quotes the notice as saying. The Bitcoin mining company confirmed that it did not make the scheduled interest payment on its outstanding bonds due on July 31, according to ccn.com. The payment is subject to a 30-day grace period ending on Aug. 30. Like many Bitcoin miners, Argo has struggled to profit as energy costs have risen, relates ccn.com. Although it sold its flagship Helios facility to Galaxy in 2022, Argo still has a large hosted footprint in Texas, where pressure on the grid threatens to end the era of cheap electricity that made the state a crypto mining hub, the reports notes. ccn.com recalls that Argo Blockchain shares on the London Stock Exchange have fallen roughly 90% in the past year, reflecting market skepticism about its survival prospects. If negotiations with Growler Mining fail, Argo could be forced to sell off assets or enter administration, leaving shareholders with little to recover, the report says. Even if a rescue deal materializes, significant equity dilution is expected, it adds. BRICKS SILVERSTONE: In Administration ------------------------------------- Bricks Silverstone Land Limited and Bricks Silverstone Propco Limited fell into administration earlier this month, with Ian Corfield and Simon Baggs of FRP Advisory appointed as joint administrators, Business Sale Report discloses. Bricks Silverstone Land Limited and Bricks Silverstone Propco Limited are construction developers based in Towcester. In accounts for the year to December 31, 2023, Bricks Silverstone Land Limited's assets were valued at around GBP14.4 million, while net assets amounted to GBP9.4 million. During the same period, Bricks Silverstone Propco Limited's fixed assets were valued at GBP56.7 million and current assets at GBP630,542, but net liabilities amounted to GBP4 million. GRADE (UK) LIMITED: Enters Administration ----------------------------------------- Grade (UK) Limited fell into administration earlier this month, appointing Jamie Playford and Michael Roome of Leading as joint administrators, says Business Sale Report. Trading as Vision Plus, Grade (UK) Limited is a manufacturer and supplier of television antennas to the caravan, motor home and marine market. In accounts for the year to December 31 2023, the company's fixed assets were valued at GBP1.1 million and current assets at around GBP1.2 million, with net assets standing at slightly under GBP2.1 million. MIZEN DEVELOPMENTS: Falls Into Administration --------------------------------------------- Mizen Developments Limited fell into administration two weeks ago, with Sean Bucknall and Elias Paourou of Quantuma Advisory appointed as joint administrators, relates Business Sale Report. Mizen Developments Limited is a property developer based in Isleworth. In accounts for the year to July 31, 2023, the company's fixed assets were valued at around GBP2.7 million and current assets at slightly over GBP240,000, with net assets standing at marginally less than GBP885,000. TUNHAM LIMITED: KR8 Appointed as Joint Administrators ----------------------------------------------------- Tunham Limited fell into administration earlier this month, with Matthew Mills and James Saunders of KR8 Advisory appointed as joint administrators, according to Business Sale Report. Tunham Limited is a business support services firm based in London. In accounts for the year to December 31 2023, the company's current assets were valued at GBP12.9 million, but net liabilities stood at approximately GBP28.3 million. VICTORIA PLC: S&P Cuts LT ICR to 'SD' on Distressed Debt Exchange ----------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Victoria PLC to 'SD' (selective default) from 'CCC-' and our rating on its senior secured debt to 'D' from 'CCC-'. We expect to raise our ratings on Victoria and assign a rating to the new EUR612 million first-priority senior secured notes over the next few days, taking into account the new capital structure, the company's liquidity position, and our expectations of operating performance over the next 12 months. On Aug. 21, 2025, Victoria PLC announced that the group had received over 98% participation and consent from its 2026 noteholders for a public offer to exchange its outstanding EUR489 million senior secured notes due August 2026 for new EUR612 million first-priority senior secured notes due 2029. Consent was also received for amendments to the existing indenture of the 2026 notes. Victoria also received majority consent from both 2026 and 2028 noteholders for proposed amendments to existing notes and indentures. The exchange transaction was subsequently executed and settled on Aug. 26, 2025. S&P said, "In our view, the exchange transaction results in nonparticipating and nonconsenting lenders receiving less than the original promise. Therefore, we deem the transaction a distressed exchange under our criteria." Victoria has settled the exchange offer on existing senior secured notes maturing in 2026 for new first-priority senior secured notes, having received consent from more than 98% of 2026 bondholders. In addition, consent from 2026 noteholders enabled amendments of the indenture to reduce the cash interest applicable on the remaining notes to 1% from 3.625%, and to extend the maturity date to 2031. At the same time, the company executed a supplemental indenture to make amendments to the 2026 and 2028 bond indenture, having received majority consent representing about 78% of 2026 and 2028 noteholders combined. This consent also allows a subordination and turnover agreement establishing relative priority of new noteholders with respect to rights of payment and enforcement of collateral. S&P said, "We view the transaction as distressed, in line with our criteria. This is because the transaction results in the ranking of nonparticipating noteholders, namely the 2028 noteholders, and nonconsenting noteholders being altered to a more junior position without adequate offsetting compensation. We therefore view the exchange offer as offering nonparticipating and nonconsenting lenders less than the original promise, which is tantamount to a default. "In the coming days, we will review the rating to incorporate the new capital structure, the group's business and operating parameters, cash flow prospects, and liquidity position." =============== X X X X X X X X =============== [] BOOK REVIEW: Bailout: An Insider's Account of Bank Failures -------------------------------------------------------------- Bailout: An Insider's Account of Bank Failures and Rescues Author: Irvine H. Sprague Publisher: Beard Books Soft cover: 321 pages List Price: $34.95 Order your personal copy at https://ecommerce.beardbooks.com/beardbooks/bailout.html No one is more qualified to write a work on this subject of bank bailouts. Holding the positions of chairman or director of the Federal Deposit Insurance Corporation (FDIC) during the 1970s and 1980s, one of Sprague's most important tasks was to close down banks that were failing before they could cause wider damage. The decades of the 1970s and '80s were times of high interest rates for both depositors and borrowers. Rates for depositors at many banks approached 10%, with rates for loans higher than that. The fierce competition in the banking industry to offer the highest rates to attract and keep depositors caused severe financial stress to an unusually high number of banks. Having to pay out so much in interest to stay competitive without taking in much greater deposits was straining the cash and other assets of many banks. The unprecedented high interest rates also had the effect of reducing the number of loans banks were giving out. There were not so many borrowers willing to take on loans with the high interest rates. With the disruptions in their interrelated deposits and loans, many banks began to engage in unprecedented and unfamiliar financial activities, including investing in risky business ventures. As well as having harmful effects on local economies, the widely reported troubles of a number of well-known and well-respected banks were having a harmful effect on the public's confidence in the entire banking industry. Sprague along with other government and private-sector leaders in the banking and financial field realized the problems with banks of all sizes in all parts of the country had to be dealt with decisively. Action had to be taken to restore public confidence, as well as prevent widespread and long-lasting damage to the U.S. economy. Sprague's task was one of damage control largely on the blind. The banking industry, the financial community, and the government and the public had never faced such a large number of bank failures at one time. The Home Loan Bank Board for the savings-and-loans associations had allowed these institutions to treat goodwill as an asset in an effort to shore up their deteriorating financial situations with disastrous results for their depositors and U.S. taxpayers. Such a desperate stratagem only made the problems with the savings-and-loans worse. The banks covered by the FDIC headed by Sprague were different from these institutions. But the problems with their basic business of deposits and loans were more or less the same. And the cause of the problem was precisely the same: the high interest rates. Faced with so many bank failures, Sprague and the government officials, Congresspersons, and leaders he worked with realized they could not deal effectively with every bank failure. So one of their first tasks was to devise criteria for which failures they would deal with. Their criteria formed what came to be known as the "essentiality doctrine." This was crucial for guidance in dealing with the banking crisis, as well as for explanation and justification to the public for the government agency's decisions and actions. Sprague's tale is mainly a "chronicle [of] the evolution of the essentiality doctrine, which derives from the statutory authority for bank bailouts." The doctrine was first used in the bailout of the small Unity Bank of Boston and refined in the bailouts of the Bank of the Commonwealth and First Pennsylvania Bank. It then came into use for the multi-billion dollar bailout of the Continental Illinois National Bank and Trust Company in the early 1980s. Continental's failure came about almost overnight by the "lightening-fast removal of large deposits from around the world by electronic transfer." This was another of the unprecedented causes for the bank failures Sprague had to deal with in the new, high-interest, world of banking in the '70s and '80s. The main part of the book is how the essentiality doctrine was applied in the case of each of these four banks, with the especially high-stakes bailout of Continental having a section of its own. Although stability and reliability have returned to the banking industry with the return of modest and low interest rates in following decades, Sprague's recounting of the momentous activities for damage control of bank failures for whatever reasons still holds lessons for today. For bank failures inevitably occur in any economic conditions; and in dealing with these promptly and effectively in the ways pioneered by Sprague, the unfavorable economic effects will be contained, and public confidence in the banking system maintained. As chairman or director of the FDIC for more than 11 years, Irvine H. Sprague (1921-2004) handled 374 bank failures. He was a special assistant to President Johnson, and has worked on economic issues with other high government officials. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. 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