250918.mbx

250918.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, September 18, 2025, Vol. 26, No. 187 Headlines A R M E N I A ELECTRIC NETWORKS: Moody's Downgrades CFR to Ba3, Outlook Negative I R E L A N D BBAM EUROPEAN IV: Fitch Assigns 'B-(EXP)sf' Rating on Cl. F-R Notes CAIRN CLO VII: Moody's Affirms B3 Rating on EUR9.1MM Class F Notes OCP EURO 2025-14: Fitch Assigns 'B-(EXP)sf' Rating on Class F Notes I T A L Y CEME SPA: Fitch Alters Outlook on 'B' LongTerm IDR to Negative N E T H E R L A N D S COTY BV: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable T U R K E Y TURKIYE WEALTH: Fitch Rates Sr. Unsecured USD Bonds 'BB-' U N I T E D K I N G D O M ADVANZ PHARMA: Moody's Alters Outlook on 'B2' CFR to Negative ALUMINIUM CASTINGS: Exigen Group Named as Administrators ARDMORE CONSTRUCTION: Begbies Traynor Named as Administrators BOOTS GROUP: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable EVOKE PLC: Fitch Affirms 'B+' LongTerm IDR, Outlook Negative FINSBURY SQUARE 2021-2: Fitch Hikes Rating on Cl. F Notes to BB+sf JOHN GILLMAN: Alvarez & Marsal Named as Administrators SEX BRAND: Oury Clark Named as Administrators TSTS WHOLESALE: Quantuma Advisory Named as Administrators - - - - - ============= A R M E N I A ============= ELECTRIC NETWORKS: Moody's Downgrades CFR to Ba3, Outlook Negative ------------------------------------------------------------------ Moody's Ratings has downgraded Electric Networks of Armenia's (ENA) long-term corporate family rating to Ba3 from Ba2 and its probability of default rating to Ba3-PD from Ba2-PD. The outlook is negative. Previously, the ratings were on review for downgrade. This rating action concludes the review for downgrade that was initiated on ENA on June 20, 2025. RATINGS RATIONALE The downgrade of ENA's ratings reflects the company's heightened susceptibility to government influence and regulatory risks resulting from the adoption of legislative amendments in July 2025 enabling the government to nationalize the company and the regulator to initiate certain administrative proceedings in certain cases. The adopted legislative amendments enable the regulator to intervene in regulated sectors to enforce continuity of service, in case the energy sector reliability is threatened. In particular, the regulator is authorized to terminate licenses or appoint temporary administrators. Based on these legislative amendments, the regulator appointed a temporary administrator for ENA for a period of three months, with a possibility of extension. Also, the amendments establish the government's preferential right to acquire strategic assets, set compensation limits based on market value, and provide mechanisms for forced alienation of shares if voluntary sale fails. While Moody's do not necessarily expect any specific credit negative scenario to occur, the recent legislative and regulatory developments indicate ENA's increased exposure to event risks related to the regulatory and business environment. As a result, Moody's no longer view the company's rating to be appropriately positioned higher than the sovereign rating of the Government of Armenia (Ba3 stable). ENA's Ba3 rating continues to factor in (1) the company's monopoly position in electricity distribution in Armenia, which makes it a critically important infrastructure company in the country; (2) the regulator's track record of transparent tariff regulation; (3) ENA's historically good visibility into profitability and cash flow generation under the clear-cut arrangements for the recovery of costs and pre-agreed investments, which have limited its exposure to the domestic economy and foreign-exchange risk; (4) its sound financial profile, despite significant debt-funded investments and recently commenced dividend payouts, which also remain flexible; and (5) its access to long-term funding in the domestic capital market, which will continue to support its liquidity, and its established relationships with international financial institutions. The rating also takes into account (1) ENA's moderate scale of operations, naturally constrained by the size of the Armenian economy and population; (2) its increased susceptibility to government influence and regulatory risks; (3) lack of history of renewed tariff arrangements, as the company still operates under the first tariff period which will expire in 2027, although key principles of the regulatory regime are set in law for an indefinite period; (4) the company's large investment programme and dependence on external funding amid persistently negative free cash flow; and (5) the uncertainty around its ownership structure. Because of the uncertainty over the impact of recent developments on ENA's governance, Moody's changed the company's credit impact score to CIS-3 from CIS-2 to reflect that while governance considerations have a limited impact on the current credit rating, they have potential for greater negative impact over time. OUTLOOK The negative outlook reflects the continuing uncertainty over the evolution of the regulatory and business environment, including potential nationalization, and the impact of recent developments on ENA's governance, operations, investment program, financial policies, credit metrics, liquidity and access to international funding. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS ENA's ratings are unlikely to be upgraded over the next 12-18 months given the negative outlook. Moody's could consider changing the outlook to stable if the legislative, regulatory and event risks decrease for the company. Over time, upward rating pressure would be conditional upon an upgrade of Armenia's sovereign rating and a decrease in geopolitical risks, provided the regulatory and business environment is supportive and the company preserves its strong financial profile, with funds from operations (FFO)/interest expense above 4.0x and retained cash flow (RCF)/debt above 15% on a sustainable basis. For an upgrade, Moody's would also expect ENA to maintain sound liquidity with balanced debt maturity profile, continued access to international capital markets and prudent management of refinancing needs in a timely manner. ENA's ratings could be downgraded if (1) Armenia's sovereign rating is downgraded; (2) there is a significant deterioration in the regulatory and business environment, or it appears likely that ENA's ownership structure would weigh on the company's credit quality; (3) the company shifts to a more aggressive financial policy such that its FFO/interest expense declines below 3.0x and RCF/debt declines below 8%, both on a sustained basis; or (4) ENA's liquidity weakens significantly or there is a risk of covenant breaches. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2024. ENA's Ba3 CFR is four notches below the Baa2 scorecard-indicated outcome because the company's rating is capped at the level of Armenia's Ba3 sovereign rating. ============= I R E L A N D ============= BBAM EUROPEAN IV: Fitch Assigns 'B-(EXP)sf' Rating on Cl. F-R Notes ------------------------------------------------------------------- Fitch Ratings has assigned BBAM European CLO IV DAC's reset notes expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ BBAM European CLO IV DAC A-R LT AAA(EXP)sf Expected Rating B-R LT AA(EXP)sf Expected Rating C-R LT A(EXP)sf Expected Rating D-R LT BBB-(EXP)sf Expected Rating E-R LT BB-(EXP)sf Expected Rating F-R LT B-(EXP)sf Expected Rating Transaction Summary BBAM IV CLO DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds will be used to redeem the existing notes (except the subordinated notes) and to fund a portfolio with a target par of EUR400 million. The portfolio will be actively managed by RBC Global Asset Management (UK) Limited. The CLO has a 4.6-year reinvestment period and an approximately 8.5-year weighted average life (WAL) test. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'. The Fitch weighted average rating factor of the identified portfolio is 24.1. High Recovery Expectations (Positive): At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate of the identified portfolio is 62.5%. Diversified Asset Portfolio (Positive): The transaction will include various portfolio concentration limits, including a top 10 obligor concentration limit of 20% and maximum exposure to the three largest (Fitch-defined) industries in the portfolio of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction will have a 4.6-year reinvestment period and include reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash-flow Modelling (Positive): The WAL used for the transaction's stress portfolio analysis is 12 months less than the WAL covenant at the issue date (subject to a floor of six years), to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include, among others, passing the coverage tests and the Fitch 'CCC' bucket limitation test post reinvestment, as well as a WAL covenant that progressively steps down, before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during the stress period. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) across all ratings and a 25% decrease of the RRR across all ratings of the identified portfolio would have no impact on the class A-R, B-R and C-R notes and lead to one-notch downgrades for the class D-R and E-R notes and to below 'B-sf' for the class F-R notes. Based on the identified portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio, the class B-R, D-R, E-R and F-R notes display rating cushions of two notches and the class C notes of three notches. The class A notes have no rating cushion. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded 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 class A-R to D-R notes and to below 'B-sf' for the class E-R and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings of Fitch's stress portfolio would lead to upgrades of up to three notches, except for the 'AAAsf' rated notes, which are at the highest level on Fitch's scale and cannot be upgraded. During the reinvestment period, based on Fitch's stress portfolio, upgrades may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, meaning the notes are able to withstand larger than expected losses for the transaction's remaining life. After the end of the reinvestment period, upgrades may occur in case of stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses on 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 BBAM European CLO IV DAC 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 Recognized Statistical Rating Organizations 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 BBAM European CLO IV 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. CAIRN CLO VII: Moody's Affirms B3 Rating on EUR9.1MM Class F Notes ------------------------------------------------------------------ Moody's Ratings has upgraded the ratings on the following notes issued by Cairn CLO VII DAC: EUR40,800,000 Class B Senior Secured Floating Rate Notes due 2030, Upgraded to Aaa (sf); previously on Feb 26, 2021 Upgraded to Aa1 (sf) EUR19,700,000 Class C Senior Secured Deferrable Floating Rate Notes due 2030, Upgraded to Aa3 (sf); previously on Feb 26, 2021 Upgraded to A1 (sf) EUR17,900,000 Class D Senior Secured Deferrable Floating Rate Notes due 2030, Upgraded to Baa1 (sf); previously on Feb 26, 2021 Affirmed Baa2 (sf) Moody's have also affirmed the ratings on the following notes: EUR203,900,000 (Outstanding amount EUR130,612,366) Class A-1 Senior Secured Floating Rate Notes due 2030, Affirmed Aaa (sf); previously on Feb 26, 2021 Affirmed Aaa (sf) EUR10,000,000 (Outstanding amount EUR6,405,707) Class A-2 Senior Secured Fixed Rate Notes due 2030, Affirmed Aaa (sf); previously on Feb 26, 2021 Affirmed Aaa (sf) EUR22,400,000 Class E Senior Secured Deferrable Floating Rate Notes due 2030, Affirmed Ba2 (sf); previously on Feb 26, 2021 Affirmed Ba2 (sf) EUR9,100,000 Class F Senior Secured Deferrable Floating Rate Notes due 2030, Affirmed B3 (sf); previously on Feb 26, 2021 Affirmed B3 (sf) Cairn CLO VII DAC, issued in February 2017, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Cairn Loan Investments LLP. The transaction's reinvestment period ended in February 2021. RATINGS RATIONALE The upgrades on the ratings on the Class B, Class C and Class D notes are primarily a result of the deleveraging of the senior notes following amortisation of the underlying portfolio since the payment date in October 2024. The affirmations on the ratings on the Class A-1, Class A-2, Class E 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-1 and Class A-2 notes have collectively paid down by approximately EUR38.2 million (17.9% of original balance) since the payment date in October 2024 and by EUR76.9 million (35.9%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated August 2025[1], the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 149.6%, 134.6%, 123.5%, 111.8% and 107.7%, compared to October 2024[2] levels of 140.0%, 128.4%, 119.5%, 109.9% and 106.4%, respectively. Key model inputs: 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 methodologies 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: EUR263.7m Defaulted Securities: EUR5.9m Diversity Score: 31 Weighted Average Rating Factor (WARF): 2994 Weighted Average Life (WAL): 2.93 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.75% Weighted Average Coupon (WAC): 4.55% Weighted Average Recovery Rate (WARR): 43.80% 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. 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: -- 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. Moody's analysed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. -- Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes that, at transaction maturity, the liquidation value of such an asset will depend on the nature of the asset as well as the extent to which the asset's maturity lags that of the liabilities. Liquidation values higher than Moody's expectations would have a positive impact on the notes' ratings. 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. OCP EURO 2025-14: Fitch Assigns 'B-(EXP)sf' Rating on Class F Notes ------------------------------------------------------------------- Fitch Ratings has assigned OCP Euro CLO 2025-14 DAC expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ OCP Euro CLO 2025-14 DAC Class A-1 LT AAA(EXP)sf Expected Rating Class A-2 LT AAA(EXP)sf Expected Rating Class B LT AA(EXP)sf Expected Rating Class C LT A(EXP)sf Expected Rating Class D LT BBB-(EXP)sf Expected Rating Class E LT BB-(EXP)sf Expected Rating Class F LT B-(EXP)sf Expected Rating Subordinated Notes LT NR(EXP)sf Expected Rating Transaction Summary OCP EURO CLO 2025-14 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. Note proceeds will be used to fund the portfolio with a target par of EUR400 million. The portfolio is actively managed by Onex Credit Partners Europe LLP. The CLO will have an approximately 4.6-year reinvestment period and 7.5-year weighted average life (WAL) test covenant at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'. The Fitch-weighted average rating factor of the identified portfolio is 23.7. High Recovery Expectations (Positive): At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate of the identified portfolio is 63.0%. Diversified Asset Portfolio (Positive): The transaction also includes various concentration limits, including a maximum exposure to the three largest Fitch-defined industries at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has an approximately 4.6-year reinvestment period, which is governed by reinvestment criteria that are 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 on the step-up date, which is one year after closing. The WAL extension is subject to conditions including passing the collateral quality, portfolio profile and coverage tests and the collateral principal amount (defaulted obligations at their Fitch-calculated collateral value) being at least at the reinvestment target par balance. Cash-flow Modelling (Positive): The WAL Fitch modelled is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged after the reinvestment period. These include, among others, passing both the coverage tests and the Fitch 'CCC' limit post reinvestment as well as a WAL covenant that progressively steps down before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during 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) across all ratings and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A-1, A-2, B, C and D notes and lead to downgrades of one notch for the class E notes and to below 'B-sf' for the class F notes. Based on the identified portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio, the class B, D, E and F notes display rating cushions of two notches. The class C notes have a cushion of three notches 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 across all ratings and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of two notches for the class A-1 notes, four notches for the class B and C notes, three notches for the class A-2 and D notes, and to below 'B-sf' for the class E and F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to two notches for the class B, C and D notes and up to three notches for the class E and F notes. The class A-1 and A-2 notes are already rated 'AAAsf', which is the highest level on Fitch's scale and cannot be upgraded. During the reinvestment period, based on the Fitch-stressed portfolio, upgrades 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. After the end of the reinvestment period, upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations 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 OCP Euro CLO 2025-14 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 ========= CEME SPA: Fitch Alters Outlook on 'B' LongTerm IDR to Negative -------------------------------------------------------------- Fitch Ratings has revised the Outlook on CEME S.p.A.'s Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'B' and senior secured rating at 'B' with a Recovery Rating of 'RR4'. The Outlook revision reflects CEME's higher leverage following the announcement of a EUR75 million fungible add-on to its existing 2031 EUR360 million floating rate notes (FRN). The higher debt, coupled with slower improvement in underlying profitability than previously expected, will lead to leverage metrics above its downgrade sensitivity in 2025 and 2026. The affirmation of the IDR reflects its expectation of continuous improvement in the EBITDA margin, albeit more slowly than Fitch previously anticipated, and sustainable positive free cash flow (FCF) generation, which supports potential deleveraging over the coming 24 months to within the present sensitivities. The IDR reflects CEME's healthy liquidity and strong position in within its niche markets, but also its small size and limited product diversification. Key Rating Drivers Additional Debt Weakens Leverage Profile: The EUR75 million fungible add-on will raise gross leverage by about 1x from previously expected levels at end-2025. The company will use the proceeds to fund the planned acquisition of Ningbo JLT Electric Co., Ltd for EUR35m, with the remaining EUR35m allocated for general corporate purposes. Higher debt, coupled with Fitch-projected EBITDA rising more slowly than Fitch expected over the short to medium term drives the agency's slower deleveraging expectations. Fitch forecasts consolidated EBITDA leverage to remain above its negative rating sensitivity of 5.5x in 2025 and 2026, at around 7.5x and slightly under 7x, respectively, in those years. Robust Profitability: Fitch expects CEME's strong profitability to continue to improve over its forecast horizon, albeit more slowly than Fitch previously anticipated. Fitch expects the Fitch-calculated EBITDA margin to be above 16% in 2025 and above 17% in 2026, from 15.2% in 2024. This expected improvement will be driven by CEME's strategic investment in inorganic growth and sales volume recovery as original equipment manufacturer destocking trends normalise in the single-serve coffee segment, which is its most dynamic source of revenue. Expansionary Strategy and Synergies Support EBITDA: CEME's increasing market share in specialty applications, with its expansionary strategy focusing on the water dispensing and medical appliances market, along with expected synergy realisation, further supports profitability expansion. This is due to the segment being associated with the lowest cost of goods sold ratio among the company's revenue streams and effectively supports its margin resilience through inherent market cyclicality. Improving FCF Generation: Fitch views the expected improvement in FCF generation as a credit strength for CEME. The temporary pressure on FCF in 2024, which was chiefly the result of the acquisition of Fluid Control, will subside in the short term as the group's operations become fully integrated in 2025. Combined with continuous conservative working-capital management and stable capex and interest costs, Fitch expects this to drive consistent positive FCF generation of over 3% for the forecast horizon, which is strong for the rating. Healthy Liquidity Headroom: Fitch forecasts sustained satisfactory liquidity in the medium term, underpinning CEME's financial flexibility, which is a credit strength. CEME's liquidity buffer will increase after the transaction, with the revolving credit facility (RCF) increasing to EUR82.5 million from EUR67.5 million, while the limited outstanding short-term maturities relate to the ongoing factoring facility of EUR20 million. The company will also have a solid cash position after the transaction as some of the add-on proceeds will be kept for general liquidity purposes. Limited Scale Constrains Rating: Fitch believes CEME's small size exposes it to heightened risks in case of market shocks and considering the inherent industry cyclicality. The latter arises from CEME's cost construction being subject to raw material price volatility as it represents about 75% of its total cost of goods sold. Improving Geographic Diversification: Fitch expects the company's solid and improving geographic diversification to partially safeguard it against market risks, including tariffs. Fitch assumes CEME will be able to sustain its market-leading position and maintain a competitive advantage on high-quality products against industry peers, albeit modestly offset by its limited product coverage. Peer Analysis CEME is a solenoid pumps and valves manufacturer for high precision fluid control technology solutions, which differentiates it from several diversified manufacturing companies. Fitch therefore focuses on the characteristics of the broader diversified manufacturing portfolio rather than of niche-specific peers. CEME has similar modest scale (annual revenue under EUR500 million) and end-market diversification to Artel Electronics LLC (B/Negative), which also has a broadly comparable profitability profile. CEME's leverage profile averaging 7.2x is comparable with Ammega Group B.V. (B-/Negative), and weaker than EVOCA S.p.A. (B/Stable) and Artel. CEME's FCF margins at an average 3.2% are stronger than Ammega's, justifying the one-notch rating difference. Other 'B' category rated companies in the diversified industrials sector, such as INNIO Group Holding GmbH (B+/Positive), are much larger, with a more diversified product range and global presence, and better capital structure, the key rating driver in the 'B' category. This drives the one-notch rating difference. Key Assumptions - Revenue growth of about 10% between 2025 and 2027 - EBITDA margin to average 17.4% until 2028 driven by higher revenue, improved product mix, spare capacity utilisation and achieved synergies - Cash interest paid of about EUR28 million a year, also reflecting Fitch's latest Global Economic Outlook - Broadly neutral working capital flows - Capex to average 4% of revenue until 2028 - No further M&A or dividends paid until 2028 Recovery Analysis - The recovery analysis assumes that CEME would be reorganised as a going concern (GC) in a bankruptcy, rather than liquidated upon default. - Fitch assumes a 10% administrative claim. - The increased GC EBITDA estimate of EUR55 million, up from EUR50 million, reflects the latest acquisition by CEME of JLT and structural changes in EBITDA following the full implementation of restructuring initiatives undertaken by CEME's management. Fitch views this as a sustainable, post-reorganisation EBITDA level upon which to base the enterprise valuation (EV). - Fitch applies an EV multiple of 5.0x EBITDA to the GC EBITDA to calculate a post-reorganisation EV, in line with industry median and peers. - The multiple of 5.0x reflects CEME's business model as a multi-specialist manufacturer of solenoid pumps and valves serving four different markets, unlike other manufacturing peers that are mainly focused on food and beverage coffee machines. It is further supported by a strong niche market position and a strong customer base. - The waterfall analysis is based on the new capital structure and consists of a super senior EUR82.5 million RCF fully drawn in a post-reorganisation scenario, senior secured EUR435 million floating-rate notes, factoring in the highest outstanding amount of EUR22 million assumed and a EUR13 million outstanding bilateral facility. - The principal waterfall analysis output percentage on current metrics and assumptions corresponds to 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to deliver expected EBITDA margin growth with strategic optimisation initiatives and a structurally weaker business profile - Gross EBITDA leverage sustainably above 5.5x - Consistently neutral to negative FCF margins - EBITDA interest coverage below 2.0x - Cash flow from operations (CFO) minus capex/debt below 2.0% Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Gross EBITDA leverage below 4.5x - FCF margins sustainably above 2% - EBITDA interest coverage above 3.0x - (CFO) minus capex/debt above 5.0% - Successful implementation of expansion strategy leading to structurally stronger business profile and product diversification Liquidity and Debt Structure As of June 2025, CEME had a healthy cash balance of about EUR41.2 million, after its adjustment for intra-year working-capital changes of 1% of sales. The liquidity headroom is supported by positive FCF generation from 2025, undrawn EUR82.5 million RCF after the transaction (due in 2031) and the increase in cash on balance sheet from the debt raised in the transaction. Fitch expects CEME to remain reliant on the factoring facility, which had an outstanding balance of EUR20 million at end-June 2025, and the EUR13 million outstanding bilateral facility after the transaction. CEME's capital structure is concentrated in the EUR435 million senior secured floating-rate notes due in 2031. Issuer Profile CEME is an Italian industrial manufacturing platform active in the production of solenoid pumps and valves for high-precision fluid control technology solutions serving global markets. 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 ----------- ------ -------- ----- CEME S.p.A. LT IDR B Affirmed B senior secured LT B Affirmed RR4 B ===================== N E T H E R L A N D S ===================== COTY BV: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed Coty Inc. (Coty) and Coty B.V.'s Long-Term Issuer Default Ratings (IDRs) at 'BB+'. Fitch has also affirmed Coty's credit facility and senior notes at 'BBB-' with a Recovery Rating of 'RR2'. The Rating Outlook is Stable. Coty's 'BB+' ratings reflect its leading market position as one of the world's largest beauty companies with a recently improved product mix toward higher growth and higher margin prestige fragrance and skin care. Recent performance has been weak due to execution issues in the U.S and a general slowdown in the global beauty market. Fitch expects EBITDA leverage could be elevated in the low to mid 4x in fiscal 2026 (ending June 2026) before returning to under 4x in fiscal 2027 on both EBITDA growth and debt reduction. Key Rating Drivers Operating Weakness: Coty's results were weak in fiscal 2025, and revenue could remain negative through at least the first half of fiscal 2026, after several years of strong operating momentum. This decline stems from execution issues in the U.S. business (40% of total revenue), retailer destocking, flat growth in its fragrance business after double-digit growth in fiscal 2024, and declines in mass cosmetics. In the U.S., Coty's prestige beauty sales fell mid-single digits while the market rose 4%, and its mass beauty sales were down mid-teens while the market was down 1%. These gaps indicate share losses. Coty's prestige revenue was flat in fiscal 2025 after growing approximately 13% in fiscal 2024 and drove over 80% of EBITDA. Fitch expects revenue for the first half of 2026 to decline mid-single digits before stabilizing or modestly improving in the second half as retailers rightsize inventory and Coty's aligns sell-in to retailers with sell-out. Prestige fragrance should remain relatively healthy, while consumer beauty remains challenged. Fitch expects EBITDA to decline just over 10% to approximately $960 million before recovering toward $1 billion in fiscal 2027 and growing in line with about 2% revenue growth thereafter. Improved Long-Term Business Profile: Coty's operating performance and financial profile improved meaningfully between fiscal 2021 and fiscal 2024, driven by its prestige fragrance business. Prestige accounted for 59% of its revenue in fiscal 2025 and had a CAGR of 10% between fiscal 2021-2025. The company has taken steps to fill gaps in its consumer beauty portfolio and stem share losses in its key consumer brands, including Covergirl, Rimmel, Max Factor and Sally Hansen. Its consumer beauty business had a CAGR of 2% between fiscal 2021-fiscal 2025, even with the 10% decline during the last year. It is investing heavily in skin care and natural products across legacy and newer brands. Investments in innovation, new product launches and marketing could stem share losses, although the company will likely have to continue heavy investments and potentially undertake portfolio reshaping activities. Low-Single Digit Top Line Growth: Fitch expects Coty to return to positive growth in fiscal 2027 and be able to sustain 2% revenue growth annually. This assumes its prestige fragrance business will remain healthy with mid-single digit growth supported by strong consumer demand and Coty's ability to successfully launch new products. The consumer beauty business revenue could be flat to down 2%, given repositioning efforts across key brands while recognizing overall challenges in the mass market beauty space. Coty's emerging presence in categories like mass fragrances and body mist, prestige makeup and skin care, could provide medium-term growth opportunities. Elevated Leverage: Coty ended fiscal 2025 with around $4.4 billion in debt (including its preferreds and A/R securitization) and leverage at 4.1x, essentially flat to fiscal 2024, higher than its prior expectations of mid-3x. Fitch expects leverage to be around 4.4x in fiscal 2026 before trending towards the high 3x in fiscal 2027 on EBITDA growth and debt reduction. Coty had a stated goal of reducing net leverage to approximately 2.5x exiting CY24 and approximately 2.0x exiting CY25. Given the recent operating weakness, company-calculated net leverage was 3.5x at June 30, 2025 but expects to continue its deleveraging path as business and FCF recovers. Dynamic and Evolving Industry: The fragrance and color cosmetics industries have demonstrated positive long-term characteristics, including mid-single-digit annual growth and relatively high margins, due to a growing middle class, premiumization of fragrances and skin care products and a focus on wellness. However, the strong growth rates for prestige brands and fragrances could moderate given the overall pullback in discretionary consumer spending. Peer Analysis Similarly rated peers in the consumer products market include Hasbro, Inc., Mattel, Inc., and Reynolds Consumer Products Inc. Mattel's 'BBB-'/Stable rating reflects low leverage, which Fitch expects to remain in the mid-to-high 2.0x range in 2025. It also reflects good profitability and a strong liquidity profile, with annual FCF around $500 million to $600 million. Mattel's leading market position and strong portfolio of owned intellectual property (IP) helps offset its narrow product focus and seasonality. Hasbro's 'BBB-'/Stable rating reflects its significant EBITDA recovery and debt reduction in 2024, continued focus on cost improvements and debt reduction supporting leverage in the low to mid 3.0x range in 2025. Hasbro's ratings also consider its strong profitability, highly visible brands portfolio and leading market shares in several categories, which help offset the seasonality and potential for volatility of profitability inherent in the toy industry. Reynolds Consumer Products' 'BB+'/Stable rating reflects its conservative financial policies, with EBITDA leverage projected to remain below 3x over the rating horizon. A focus on innovation supports its leading market position and liquidity is robust with good annual FCF generation. This is offset by Reynolds' smaller scale, high exposure to raw material price fluctuations, and limited product diversity vs. larger consumer goods firms. Key Assumptions - Revenue declines at approximately 2% in fiscal 2026 on a fiscal 2025 revenue base of $5.9 billion, assuming mid-single digits declines in the first half and flat to low single digit growth in the second half due to a recovery in its fragrance business. Fitch expects organic revenue to grow in the 2% range thereafter, assuming mid-single growth in its fragrance business and flattish to down 2% decline in its consumer beauty (mass market cosmetics) brands; - EBITDA in fiscal 2026 declines ~ 11% to $960 million on top line declines, with EBITDA margins falling to 16.7% from 18.4% in FY2025. EBITDA generally grows in line with revenue thereafter; - FCF of around $200 million in fiscal 2026 and over $400 million annually in fiscal years 2027-2028, given EBITDA growth and assuming minimal working capital swings in fiscal 2027. Fitch's forecast does not assume any sale proceeds from the potential sale of the company's 25.9% stake in Wella. The company recently commented that the Wella business performance remains strong and it is focused on divesting the business with proceeds to be used toward debt reduction. - EBITDA leverage is expected to increase to the mid-4x in fiscal 2026, on account of EBITDA contraction before declining the high 3x in fiscal 2027. Fitch's debt calculations include $143 million in preferred stock and approximately $211 million in factored receivables; - Coty's debt generally has fixed interest rate structures aside from its revolving credit facilities. Pricing its SOFR +150bps for the $1.67 billion revolver and Euribor +150bps for the EUR300 million tranche. Recovery Analysis Fitch assigns Recovery Ratings (RRs) to the various debt tranches in accordance with Fitch's criteria, which allows for the assignment of RRs for issuers with IDRs in the 'BB' category. Given the distance to default, RRs in the 'BB' category are not computed by bespoke analysis. Instead, they serve as a label to reflect an estimate of the risk of these instruments relative to other instruments in the entity's capital structure. Fitch has affirmed Coty's senior secured credit facilities at 'BBB-'/'RR2', indicating outstanding recovery prospects in the event of default. The senior credit facilities are senior secured obligations of Coty and are guaranteed on a senior secured basis by each of Coty's wholly owned domestic subsidiaries. Fitch has also affirmed Coty's $1.7 billion senior secured notes and $1.9 billion unsecured notes at 'BBB-'/'RR2'. The notes went from secured to unsecured, with a covenant suspension and collateral release in effect since September 2024 as described below in the Criteria Variation section. The Series B preferred stock is rated 'BB-'/'RR6' due to its deeply subordinated nature. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade to 'BB' could result from a worse than expected deceleration in top-line growth and declining EBITDA margins such that EBITDA leverage is sustained above 4.0x; - A downgrade could also result from a change in financial policy or debt-financed acquisitions that result in EBITDA leverage sustained above 4.0x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of Coty's ratings to 'BBB-' could result from strong operating performance, with annual organic top-line growth in the low to mid-single digits, stable to improving market shares, with EBITDA leverage sustained under 3.5x. Liquidity and Debt Structure Coty's liquidity as of June 30, 2025, consisted of $257.1 million in cash and over $1.5 billion available under its revolving credit facilities. The company has two senior secured revolving credit tranches maturing in July 2028: a $1.670 billion tranche available in U.S. dollars and other currencies, and a EUR300 million tranche. Coty had $407 million of borrowings outstanding at June 30, 2025. Coty also maintains receivables factoring facilities, including a U.S. facility of $150 million and a European facility of EUR143 million. Net utilization was $211.8 million as of June 30, 2025, and Fitch includes this in its debt calculations. As of June 30, 2025, Coty had $3.6 billion of senior notes and $142 million of convertible series B preferred stock. Fitch treats the preferred stock as debt given due to its high coupon, which creates a lack of permanence in the capital structure. Coty faces sizable maturities on April 15, 2026, when about $1.17 billion comes due. Fitch expects the company to refinance a significant portion of this debt. Fitch expects Coty to generate around $200 million in FCF in fiscal 2026 and over $400 million in fiscal 2027, which could fund debt paydown or share buybacks. Issuer Profile Founded in 1904, Coty Inc. is one of the world's largest beauty companies. It manufactures, markets and distributes prestige and mass market products with a top three global position in prestige fragrances. Criteria Variation According to Fitch's "Corporates Recovery Ratings and Instrument Ratings Criteria," unsecured debt is capped at 'RR4'/+0. Fitch maintains an 'RR2' Recovery Rating and +1 notching for the $1.9 billion senior notes due 2027, 2028 and 2030, which were converted from secured to unsecured. This reflects the high likelihood that the notes' security will reactivate near or upon a default. Implicit in this assumption is that the liens created in favor of the holders of these notes wouldn't provide more capacity for new secured debt than what already exists in the indentures. Coty's senior secured notes are its senior secured obligations. The notes are guaranteed on a senior secured basis by each of Coty's wholly owned domestic subsidiaries that guarantees the company's obligations under its existing senior secured credit facilities. The notes are secured by first priority liens on the same collateral that secures Coty's obligations under its existing senior secured credit facilities. Upon the respective senior secured notes achieving investment grade ratings from two out of the three ratings agencies, the senior secured notes provide for certain collateral release and covenant suspension provisions, as follows: - For the 2026 Dollar Senior Secured Notes and the 2026 Euro Senior Secured Notes, the guarantees and certain covenants will be released; - For the 2029 Dollar Senior Secured Notes, the collateral security relating to the co-issuers and guarantors, the guarantees and certain covenants will be released; - For the 2027 Euro Senior Secured Notes, the 2028 Euro Senior Secured Notes and the 2030 Dollar Senior Secured Notes, the collateral security, the guarantees and certain covenants will be released. As a result, Coty's $1.9 billion senior secured notes due 2027, 2028 and 2030 went unsecured after the notes received investment grade ratings from two rating agencies, with the note guarantees suspended during a covenant suspension period which is now in effect. The collateral will be reinstated if the notes are downgraded to noninvestment grade by two out of the three rating agencies. Summary of Financial Adjustments Fitch adjusted historical and projected EBITDA to add back non-cash, stock-based compensation and exclude nonrecurring charges. With respect to the balance of receivables under Coty's factoring programs, Fitch has reinstated the balance of accounts receivables that were treated as sold on the balance sheet with a related addition to debt; accordingly, cash flows from operating and financing activities have also been adjusted. Fitch also added the Convertibles Series B Preferred Stock to its debt calculations. 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 ----------- ------ -------- ----- Coty Inc. LT IDR BB+ Affirmed BB+ Preferred LT BB- Affirmed RR6 BB- senior secured LT BBB- Affirmed RR2 BBB- senior unsecured LT BBB- Affirmed RR2 BBB- Coty B.V. LT IDR BB+ Affirmed BB+ senior secured LT BBB- Affirmed RR2 BBB- =========== T U R K E Y =========== TURKIYE WEALTH: Fitch Rates Sr. Unsecured USD Bonds 'BB-' --------------------------------------------------------- Fitch Ratings has assigned Turkiye Wealth Fund's (TWF; BB-/Stable) senior unsecured USD500 million fixed-coupon (6.875%) notes (XS3173762439) due 10 February 2031, and USD500 million fixed-coupon (7.75%) notes (XS3173762512) due 10 September 2035, final long-term ratings of BB-'. The rating is in line with TWF's Long Term Issuer Default Rating (IDR). The proceeds are being used for general working capital, general corporate purposes and project-based investment requirements. The final ratings follow the receipt of documents confirming the information already received. Key Rating Drivers Fitch classifies TWF as a government-related entity of the Turkish government and equalises its ratings with those of the sovereign. This reflects Fitch's view of 'Virtually certain' extraordinary support from Turkiye to TWF, if needed. The notes' final rating is equalised with TWF's Long-Term Foreign-Currency IDR of 'BB-', reflecting that the issuance represents a direct, unconditional, unsubordinated and unsecured obligation of TWF and ranks pari passu with all its present and other future unsecured and unsubordinated obligations. The notes are issued under TWF's offering circular, which has standard clauses such as negative pledge, events of default (if due debt exceeds USD40 million or its equivalent in any other currency), a call option for the issuer to redeem all notes at any time with a notice period to the noteholders of at least 30 days and no more than 60 days, and the notes becoming immediately repayable if Turkiye ceases to directly or indirectly control TWF or its management company. Issuer Profile TWF is Turkiye's sole sovereign wealth fund and manages key state-owned companies on behalf of the state, promoting the national economy in alignment with the national strategic agenda. At end-2024, TWF's total consolidated assets accounted for about 30% of national GDP. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of the sovereign would lead to a downgrade of TWF. - A weaker assessment of the overall support factors leading to a score below 45 under its GRE Criteria could lead to a downgrade. - A downgrade of TWF's Long-Term IDR would be reflected in the senior unsecured notes' ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of the sovereign would lead to similar rating action on TWF, provided support factors are unchanged. - An upgrade of TWF's Long-Term IDR would be reflected in the senior unsecured notes' rating. Date of Relevant Committee 25 September 2024 Public Ratings with Credit Linkage to other ratings TWF's ratings are credit linked to the Turkish sovereign ratings. 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 ----------- ------ ----- Turkiye Wealth Fund senior unsecured LT BB- New Rating senior unsecured LT BB- New Rating BB-(EXP) =========================== U N I T E D K I N G D O M =========================== ADVANZ PHARMA: Moody's Alters Outlook on 'B2' CFR to Negative ------------------------------------------------------------- Moody's Ratings has changed the outlook for ADVANZ PHARMA Holdco Limited (Advanz or the company) and its subsidiary Cidron Aida Finco S.a r.l. to negative from stable. Concurrently, Moody's have also affirmed Advanz's long term corporate family rating of B2, its probability of default rating of B2-PD and the B2 ratings of the senior secured bank credit facilities and backed senior secured notes at Cidron Aida Finco S.a r.l. RATINGS RATIONALE The change in outlook to negative from stable reflects the company's performance in the first and second quarter of 2025 and uncertainty regarding the pace and timing of recovery in sales and EBITDA. Specifically, the rapid decline of its largest drug Ocaliva after withdrawal of marketing authorization in Europe and the more gradual recovery from supply chain issues affecting two other main drugs in its portfolio, Lanreotide and Paliperidone, have weighted on performance. Sales of another of its top 10 drugs, Nitrofurantoin, have also meaningfully reduced as a result of competitive pressures in 2025. Overall, Moody's-adjusted debt/EBITDA stood well outside the guidance for the rating at 7.2x for the twelve months to June 2025 pro-forma for acquisitions and after fully expensing exceptional costs. Advanz has also remained acquisitive, for example with the June 2025 Testoviron transaction, which Moody's expects to continue and will partly balance the negative developments in its existing portfolio. Moreover, Advanz retains a solid pipeline. In the fourth quarter of 2025 the company will launch two new drugs followed by another launch in 2026 and 2027, respectively. If executed successfully and absent any further unexpected adverse developments, the company has the potential to return to visible growth and restore its credit metrics over 2026 and 2027 to levels expected for the rating. Advanz remains cash flow generative before acquisitions and has GBP266 million of unrestricted cash on the balance sheet as of June 2025, as well as a EUR214.3 million committed revolving credit facility (of which EUR191.4 or GBP163.9 million remains available). The company continues to spend significant amounts for acquisitions and has provisioned GBP56 million related to the legacy Liothyronine and Hydrocortisone CMA fines, which it may have to pay in the coming quarters. The B2 CFR also reflect the company's diversification by drug and therapeutic area, continued solid profitability and cash conversion and track record of acquisition execution. It also incorporates a degree of geographic concentration in the UK, the levered capital structure and need for ongoing acquisitions and investment in drug pipeline to generate growth. OUTLOOK The negative outlook takes into consideration Moody's expectations that leverage will be outside the guidance for the rating at least in 2025 and potentially 2026 depending on the pace of the company's recovery and success from new launches. Accordingly, there is currently an elevated risk of downgrade in case there are execution issues or further negative developments occur. The outlook could be changed to stable if the company returns to visible growth with metrics approaching levels more in line with the guidance. STRUCTURAL CONSIDERATIONS The B2 ratings on the senior secured bank credit facilities and backed senior secured notes are in line with the CFR, reflecting the company's all-senior debt structure and their pari passu ranking. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook indicates that a ratings upgrade is unlikely over the next 12-18 months. However, the ratings could be upgraded if the company (1) achieves positive organic revenue and EBITDA growth; and (2) reduces its Moody's-adjusted leverage below 4.5x on a sustainable basis; and (3) generates free cash flow (FCF) / debt above 10% on a sustainable basis; and (4) maintains at least adequate liquidity. An upgrade would also require the company to demonstrate adherence to a financial policy consistent with the above metrics. The ratings could be downgraded if (1) revenues or EBITDA continue to decline materially; or (2) the company's Moody's-adjusted gross debt/EBITDA remains above 5.5x; or (3) Moody's-adjusted FCF / debt reduces below 5% on a sustained basis; or (4) liquidity concerns arise. METHODOLOGY The principal methodology used in these ratings was Pharmaceuticals 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 Headquartered in London, UK, Advanz is a pharmaceutical company marketing a portfolio of more than 170 branded drugs and generics in over 90 countries and across various therapeutic areas. In the last twelve months ended June 2025, Advanz reported revenue of GBP637 million. The company is owned by funds ultimately controlled and advised by private equity firm Nordic Capital. ALUMINIUM CASTINGS: Exigen Group Named as Administrators -------------------------------------------------------- Aluminium Castings Limited was placed into administration proceedings In the High Court of Justice Business and Property Courts at London, Court Number: CR-2025-005902, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on Aug. 28, 2025. Aluminium Castings engaged in the temporary employment agency activities. Its registered office is at Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD Its principal trading address is at Stoke Abbott Road, Worthing, BN11 1HJ The joint administrators can be reached at: David Kemp Richard Hunt Exigen Group Limited Warehouse W, 3 Western Gateway Royal Victoria Docks, London E16 1BD For further details, contact: David Kemp Tel No: 0207 538 2222 ARDMORE CONSTRUCTION: Begbies Traynor Named as Administrators ------------------------------------------------------------- Ardmore Construction Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts of England and Wales, Court Number: CR-2025-005932, and Dominik Thiel-Czerwinke and Jamie Taylor of Begbies Traynor (Central) LLP were appointed as Joint Administrators of the Company on Aug. 28, 2025. Ardmore Construction specialized in construction - Building Construction. Its registered office is at 1066 London Road, Leigh On Sea, Essex, SS9 3NA. The joint administrators can be reached at: Dominik Thiel-Czerwinke Jamie Taylor Begbies Traynor (Central) LLP 1066 London Road Leigh-on-Sea Essex SS9 3NA -- and -- Jason Callender Panos Eliades Callender & Co Olympia House, Armitage Road London, NW11 8RQ Further details contact: Paige Pitchley Begbies Traynor (Central) LLP Email: southendteamd@btguk.com Tel No: 01702-467255 BOOTS GROUP: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has assigned The Boots Group Intermediate Limited (The Boots Group), a carve-out of the international segment of Walgreens Boots Alliance, Inc. (WBA), a final Long-Term Issuer Default Rating (IDR) of 'BB-'. The Outlook is Stable. The separation of The Boots Group from WBA and the financing package for its acquisition by Sycamore Partners have completed. The transaction details are broadly in line with its expectations. The debt raised was slightly more than its original expectations, at USD4.5 billion rather than USD4.25 billion. However, this is partly mitigated by lower-than-anticipated interest costs and marginally improved interest coverage ratios. The IDR balances Boots' strong UK market position with unique and sustainable competitive advantages. This supports an overall mid to high 'bb' category business profile with a 'b' category financial profile, which results from a moderately high 5x opening EBITDAR leverage and relatively modest 2x fixed-charge coverage. This is mitigated by the expectation of sustained positive free cash flow generation under the assumption of no cash dividends over the rating horizon. Key Rating Drivers Strong Market Position: The Boots Group has strong market positions as a leading pharmacy-led beauty and health retailer in the UK and leading pharmaceutical distributor in Germany. With about USD1.5 billion EBITDAR, The Boots Group has an investment-grade scale. Boots is the key profit contributor (about 90% of group EBITDA) while pharmacy and pharmaceutical distribution add demand stability. Sustainable Competitive Advantages: Fitch sees Boots as well-established business with sustainable competitive advantages. Pharmacy drives the footfall to a nationwide overall network of around 2,300 Boots stores, including 373 opticians, in the UK and the Republic of Ireland (RoI), which are convenient one-stop shops for a diversified product offering. Boots has leading positions across its key product categories of beauty and health and wellness, benefiting from department store closures. It has improved its position despite new store openings by premium beauty competitors. Boots has a strong loyalty card with around 17 million members. It has successful own-brand products, including Boots, No7 and Soltan, which are competitively priced and generate a good profit margin. This is reflected in a respectable EBITDA margin of close to 10% for this portion of the company's operations. Moderately High Leverage After Transaction: Fitch forecasts initial EBITDAR net leverage of about 4.9x (gross: 5.0x) following the transaction, which was funded by USD4.5 billion new debt, USD1.0 billion fresh preferred equity and common equity at USD1.58 billion. Fitch expects it to only slightly reduce to 4.5x by the financial year ending August 2028 because of mild earnings growth and free cash flow generation. This maps to a 'b' median under its Non Food Retail Navigator. Fitch includes drawings under the factoring programme, increasing gradually to around USD1 billion by FY26, in its debt calculation. Preferred Equity Not Debt: Fitch has treated preferred equity as equity under its criteria due to it being raised outside the restricted perimeter and injected as equity into the group, its perpetual and structurally subordinated nature, and intention to pay dividends in kind (PIK nature) over the rating horizon. Ring-Fenced Legal Claims at Parent: Fitch understands from the issuer that legal claims against its former US parent WBA regarding opioid-related litigation are ring-fenced to the US business, and therefore The Boots Group is insulated from the risk that they may become a liability for the company. Gradual Earnings Growth: Fitch forecasts The Boots Group EBITDAR will grow to USD1.6 billion by FY27 from USD1.5 billion in FY24. The uplift will come from low single-digit sales growth and continued efforts to manage operating cost inflation, as demonstrated in the recent past. Fitch expects a slightly declining margin due to the shift online (17% of Boots retail) and growth of third-party brands. Fitch anticipates the beauty segment growth will slow and there is no material profit contribution from other international markets combined, excluding Germany. Opportunities for Pharmacy Segment: Fitch expects UK and RoI pharmacy segment sales (near USD3 billion) to return to growth from FY26. Fitch sees further growth opportunities for Boots to capture an NHS funding uplift under the Pharmacy First programme in England through its nationwide store network, with particular benefit for the 800 smallest Boots pharmacies, which contribute less to profits. Under the programme, pharmacies will provide additional services, which are typically higher margin, although driven by the conditions of this funding provision. Wholesale Adds Stability: Alliance Healthcare Deutschland (6% of group EBITDA), the issuer's wholesale business, contributes over half of group revenues and is the leading company in Germany, with scale benefits and strong relationships with the pharmacy channel. It operates in a noncyclical and regulated market with stable demand, providing visibility and stability of revenues and cash flows. However, despite operating in an oligopolistic industry, it is subject to structurally limited profitability, reflecting intense regulatory pressures. Fitch assumes margin expansion of 20bp from 0.6% in FY24 from operating efficiencies. Risk of Under-Invested Stores: Fitch projects higher capex than in FY23-FY24 but Fitch sees some risk that the tail of under-invested Boots stores may deter customer spending, as specialised category competitors open new, very attractive stores. Fitch understands that the group is satisfied with its store estate size, after closures of 624 less profitable small stores in the UK since 2019. However, the majority of site-level profits come from the top 500, predominantly larger destination health and beauty stores, with a wide product range and extensive healthcare offerings. The remaining store estate makes a lower contribution. Positive FCF: Fitch anticipates positive free cash flow (FCF) generation of about USD200 million annually, well below management's forecast, with an FCF margin of about 1%, after an average of about USD350 million capex and USD340 million interest cost annually. Positive FCF permits a mild net leverage reduction. Previously, positive cash flow generated by WBA's international segment was up-streamed to the parent. Peer Analysis The Boots Group is larger by revenue than Kingfisher plc (BBB/Stable), El Corte Ingles, S.A. (BBB-/Positive), FNAC Darty SA (BB+/Stable), Pepco Group N.V (BB/Stable) and Kohl's Corporation (BB-/Negative). It is similar to Ceconomy AG (BB/Ratings Watch Positive), but smaller than Bellis Finco plc (ASDA, B+/Stable). Like The Boots Group, some of these businesses have leading market positions in one or two key markets. The Boots Group, El Corte, Kingfisher, Kohl's and Bellis have near or investment-grade scale on an EBITDAR basis (around USD1.5 billion). The Boots Group's operating profit margins are comparatively low due to the wholesale part of the business. The group-wide EBITDAR margin of about 6% is above ASDA (near 5%, bbb on food navigator), Ceconomy (4.5%), slightly below FNAC (nearing 7%), below El Corte (8%), Kohl (9%), Kingfisher (10%), Mobilux (11%), Pepco (13%) and Douglas (17%). The 10% EBITDA margin for Boots UK (including pharmacies) is aligned with other non-food retailers, including Douglas at about 10% and Pepco at about 11%, after the Poundland disposal). The Boots Group's German wholesale EBITDA margin of 0.6% in FY24 is below that of US pharmaceutical distributors such as Cardinal Health, Inc. (BBB/Stable) and Cencora, Inc. (A-/Stable) at around 1%, which are much larger (USD200 billion-300 billion vs USD12 billion for The Boots Group). The Boots Group's EBITDAR leverage of about 5.0x is similar to Douglas and Kohl's, one turn below ASDA's, with demand for food more resilient, 1.5 turns above FNAC's, 2.0x above Ceconomy's and 3.0x above Kingfisher's. Fixed charge coverage at 2.0x is 4.0x weaker than El Corte's (material share of properties owned), 1.0x weaker than Kingfisher's and broadly aligned with other non-food retailers. Key Assumptions - In FY25, Fitch expects sales growth of around 2.2%, as Fitch expects Boots Pharmacy to contract by around 4.5%, mainly due to store closures in FY24, offsetting growth of around 2% at Boots Retail. In FY26-FY28, Fitch expects organic sales growth of 3.0%-3.5% a year, with Boots growing at 2.5%-3% a year, while Alliance Healthcare Germany and other markets grow at 3%-4%. - Fitch assumes adjusted EBITDA margins at 4.5% in FY25, before slightly declining towards 4.3% by FY28, mainly due to channel and product mix changes, with some inflationary wage pressures at Boots mostly offset by cost initiatives. - Fitch assumes small working-capital cash outflows of around USD25 million a year (with gradual increase in factoring utilisation deducted here and added as increase in debt). - Fitch expects capex intensity to remain 1.3%-1.5% of sales. - Fitch assumes no common or preferred dividends paid in cash, with dividends to/from non-controlling interests offsetting each other. - Fitch expects no further M&A. Recovery Analysis Fitch rates Boots' senior secured debt following its generic approach for 'BB' rating category issuers. The senior secured term loans and bonds are rated at 'BB'/RR3, one notch higher than the IDR, reflecting GBP680 million of prior-ranking asset-based revolving credit facility, which reduces the recovery prospects for the senior secured debt class compared to 'BB' rated issuers with no material prior-ranking debt. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Weaker than expected performance - EBITDAR gross leverage above 5.0x on a sustained basis - EBITDAR fixed charge coverage below 1.7x on a sustained basis - Annual FCF below USD100 million Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful execution of strategy demonstrating continued positive like-for-like sales growth and cost optimisation to help offset cost inflation in the UK retail business, along with earnings growth in pharmacy segment benefiting from additional NHS funding while managing the cost of service provision, and efficiency delivery in wholesale business leading to EBITDAR growth - EBITDAR gross leverage below 4.5x on a sustained basis - EBITDAR fixed charge coverage above 2.5x on a sustained basis - FCF margin of at least 2% Liquidity and Debt Structure Fitch considers The Boots Group's pro forma available liquidity following the completion of the transaction to be satisfactory, with cash balances supported by the new GBP680 million undrawn ABL facility and nearly USD1.3 billion factoring programmes. The company uses two factoring programmes of EUR700 million, with seasonal increases to EUR800 million, and GBP250 million to fund trade receivables, mostly from pharmacies in Germany and the NHS in the UK. The lines are drawn to varying degrees throughout the year based on working-capital needs. The new prospective senior secured notes and term loan B mature in 2032 and are subordinated to the ABL facility due in 2030. The factoring lines are recourse only to sold receivables and a EUR60 million additional claim on ABL assets thereafter. Issuer Profile The Boots Group is a carve-out of all the non-US business from WBA. The Boots Group incorporates Boots UK, operations in RoI, Germany and Mexico, and other Boots stores and franchise revenue globally. 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 Boots Group Intermediate Limited has an ESG Relevance Score of '4' for Governance Structure due to a combination of concentrated ownership stake and management leadership control in the hands of one family, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- The Boots Group Luxco S.a r.l. senior secured LT BB New Rating RR3 senior secured LT BB New Rating RR3 BB(EXP) The Boots Group Bidco Limited senior secured LT BB New Rating RR3 senior secured LT BB New Rating RR3 BB(EXP) The Boots Group Intermediate Limited LT IDR BB- New Rating BB-(EXP) Boots Group Finco L.P. senior secured LT BB New Rating RR3 senior secured LT BB New Rating RR3 BB(EXP) EVOKE PLC: Fitch Affirms 'B+' LongTerm IDR, Outlook Negative ------------------------------------------------------------ Fitch Ratings has affirmed evoke plc's Long-Term Issuer Default Rating (IDR) at 'B+' with a Negative Outlook. Fitch has also assigned a 'BB-(EXP)' rating with a Recovery Rating of 'RR3' to the announced senior secured notes to be issued by 888 Acquisitions Limited, evoke's fully owned subsidiary. The IDR is constrained by evoke's weaker profitability and higher leverage than its closest peers and, consequently, a higher interest burden that pressures free cash flow (FCF) generation. This is offset by its business profile with solid brands, omnichannel presence in the UK and geographical diversification. The IDR continues to assume strict budget discipline and a conservative financial policy. The Negative Outlook reflects continued pressure on FCF from high interest costs and execution risks to organic deleveraging and restoration of coverage metrics. Its assessment takes into consideration stiff competition in the UK as well as regulatory and fiscal pressure that could affect the financial profile. Key Rating Drivers Organic Deleveraging Continues as Forecast: evoke's trading in 2025 continued to demonstrate further profitability growth, slightly accelerating deleveraging. Fitch expects net EBITDAR leverage to improve from 5.8x in 2024 to 5.5x in 2025, below the negative sensitivity for the rating. Fitch expects the company's revenues to rise in the mid-single digits and operating profitability to improve by 30bp-50bp annually in 2025-2027. This will reduce EBITDAR leverage to around 4.5x by end-2027. Pro forma for the completion of the announced transaction, the first major maturities will fall in 2028. Its deleveraging assumptions, although improved, leave little room for underperformance and remain contingent on budget discipline and execution. Geographic Concentration Risks: evoke has high revenue concentration in the UK, at 67% in 4Q24. Fitch expects minimal impact from the new regulation on spin limits introduced in April-May 2025, as management reported substantial compliance with these limits as early as 2024. Its forecast does not incorporate any additional fiscal pressure on evoke in the UK, which Fitch would treat as event risk, as large gaming taxation changes could materially affect its credit profile and that of other UK-exposed sector constituents. FCF Generation Still Challenged: evoke has comparable operating profitability with higher-rated gaming and bookmaking operators, although this does not translate into similar FCF generation. This is primarily due to a high interest burden but also sizeable one-off items. Its forecast incorporates a decline in one-off items to about GBP30 million from 2025 (from about GBP80 million in 2024), although FCF margins will remain negative, in the low single digits in 2025, before turning mildly positive in 2026. Higher-than-anticipated one-off costs, if deemed recurring, would underline inconsistent cash flow generation and affect the rating. iGaming Performance Drives Turnaround: evoke's gaming performance is stronger than in sports betting, where revenues deteriorated slightly in 2024 and so far in 2025. Fitch views sports betting as more commoditised and therefore prone to competition, especially from larger operators such as Flutter Plc and Entain plc. Fitch is cautious in its forecast of online sports betting growth, which will offset iGaming's expansion, at an overall mid-single-digit increase for the online division. Retail has also been underperforming, but Fitch expects the decline to slow dramatically from 2H25, supported by roll-out of new machines, and improvements in the sports book and instore experience. No Fixed-Charge Cover Headroom: Fitch's rating case forecasts fixed-charge cover (FCC) staying at 1.6x in 2025 before improving to 1.8x in 2026, driven by a high interest burden and sizeable lease expense. This limits available cash flow to support expanding operations and capex that partially consists of less discretionary labour costs related to software development. Evoke mitigates potential interest rate increases by hedging - at end-June 2025, only 6% of debt was effectively subject to floating interest rates. Recreational Players Affecting Profitability: An increasing focus on a recreational player base provides higher revenue visibility over the long term, as this revenue is less susceptible to regulatory policies. However, higher-spending players typically drive greater profitability. Maintaining a more recreational-based structure of active players will continue challenges to turning around profitability, offsetting synergies gained from the acquisition of William Hill. Peer Analysis evoke's business profile is weaker than that of Flutter Entertainment Plc (BBB-/Stable) and Entain plc (BB/Stable), given its similar portfolio of strong brands, but smaller scale and slightly weaker geographical diversification with no major US presence. Fitch also projects higher leverage and lower profitability for evoke over 2024-2026, which underlines its rating differential with Flutter and Entain. All three entities have high exposure to the UK market and are vulnerable to regulatory risk, which is factored into their ratings. Of the three, evoke has the highest exposure to the UK and share of online gaming revenue, making it more vulnerable to adverse regulations. evoke is also more leveraged than Allwyn International AG (BB-/Positive). Its organic growth potential of online gaming and betting is offset by a higher regulatory risk than Allwyn's lottery business. The latter's strong FCF generation and lower leverage translate into a one-notch rating differential, which is only partly offset by a more aggressive financial policy and more complex group structure. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Mid-single-digit revenue increase between 2025 and 2028 - EBITDAR margin improving to about 19.5% in 2027-2028, driven by cost optimisation and savings - Non-recurring expenses of about GBP30 million a year in 2025-2026 - Capex at about 5% of revenue to 2028 - Neutral working capital in 2025-2028 - No dividends in 2025-2028 Recovery Analysis Fitch assumes evoke would be considered a going-concern (GC) in bankruptcy and that it would be reorganised rather than liquidated. The GC EBITDA estimate reflects its view of a sustainable, post-reorganisation EBITDA level on which Fitch bases the enterprise valuation (EV). In its bespoke GC recovery analysis, Fitch considered an estimated post-restructuring EBITDA available to creditors of about GBP220 million. Fitch applied a distressed EV/EBITDA multiple of 6.0x, within the higher range of multiples Fitch uses for the corporate portfolio outside the US. In its view, the high intangible value of evoke's brands and historical multiples of B2C brand acquisitions, including William Hill International, support an above-average multiple. This multiple is higher than the 5.0x Fitch uses for Inspired Entertainment, Inc. (B-/Stable) and the 5.5x Fitch use for Meuse Bidco SA (B+/Stable). Under its criteria, evoke's GBP13 million operating company debt ranks ahead of all holding company debt of GBP1,947 million including senior secured debt and GBP200 million senior secured revolving credit facility (RCF), assumed fully drawn at default. After deducting 10% for administrative claims, its principal waterfall analysis generated a ranked recovery for the senior secured debt in the 'RR3' band, indicating a 'BB-' instrument rating for the senior secured debt of 888 Acquisitions Limited and 888 Acquisitions LLC. Pro forma for the contemplated transaction, the waterfall analysis for the senior secured debt results in similar recovery percentage, in the 'RR3' band, indicating a 'BB-(EXP)' instrument rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Persisting execution challenges due to regulatory pressures in core markets or inability to stabilise and increase revenue and profitability sufficiently, leading EBITDAR net leverage to rise above 6.0x in 2025 and above 5.5x over the long term - Erosion of liquidity headroom with consistent material reduction in RCF availability and persistently negative FCF - EBITDAR FCC consistently below 1.6x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A return to stable organic revenue expansion and consistent improvement of EBITDAR margins - Sustained positive low-single-digit FCF margins - EBITDAR net leverage trending below 4.5x - EBITDAR FCC above 2.0x on a sustained basis Liquidity and Debt Structure The announced transaction will improve evoke's debt maturity profile and liquidity, pushing 2027 maturities to 2030 and 2031 and extending the availability of GBP129 million available under its RCF to 2029. Pro forma the transaction, debt maturities in 2025-2027 will be represented by legacy William Hill notes maturing in 2026 (GBP10.5 million outstanding) and insignificant amortisation of the term loan B, and Fitch assumes existing liquidity sources will be used to address these principal repayments. Fitch expects evoke's FCF generation to turn positive in 2026, but the margin to remain in low single digits, leading to its assumptions that part of 2028 debt (outstanding at transaction completion) will have to be refinanced. Issuer Profile Gibraltar-based gaming operator evoke plc is a global online gaming and sports betting operator focused on casino and poker, with retail operations in the UK. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations evoke has an ESG Relevance Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security due to increasing regulatory scrutiny of the sector, particularly in the UK, greater awareness around social implications of gaming addiction and an increasing focus on responsible gaming. Fitch has reflected in the ratings conservative assumptions on UK online sales and profitability, ahead of the UK Online Gambling Review, but more punitive legislation than envisaged could put ratings under pressure, given evoke's high leverage. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. evoke has an ESG Relevance Score of '4' for Governance Structure- Board Independence and Effectiveness, Ownership Concentration due to recent unanticipated top management rotations, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The regulator's recent concerns over the suitability of one of its minority shareholders have resulted in a license review that concluded with no license conditions, remedies or penalties imposed on evoke. 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 ----------- ------ -------- ----- 888 Acquisitions Limited senior secured LT BB-(EXP) Expected Rating RR3 senior secured LT BB- Affirmed RR3 BB- evoke plc LT IDR B+ Affirmed B+ 888 Acquisitions LLC senior secured LT BB- Affirmed RR3 BB- FINSBURY SQUARE 2021-2: Fitch Hikes Rating on Cl. F Notes to BB+sf ------------------------------------------------------------------ Fitch Ratings has upgraded Finsbury Square 2021-2 PLC's (FSQ21-2) class D, E and F notes and affirmed the rest. Fitch has also affirmed Gemgarto 2021-1 PLC (Gemgarto) and Finsbury Square 2021-1 Green plc (FSQ21-1). All ratings have been removed from Under Criteria Observation (UCO). Entity/Debt Rating Prior ----------- ------ ----- Finsbury Square 2021-1 Green plc Class A XS2352500636 LT AAAsf Affirmed AAAsf Class B XS2352501360 LT AAAsf Affirmed AAAsf Class C XS2352501527 LT A+sf Affirmed A+sf Class D XS2352502509 LT CCCsf Affirmed CCCsf Class X2 XS2352505197 LT BB+sf Affirmed BB+sf Gemgarto 2021-1 PLC A XS2279559889 LT AAAsf Affirmed AAAsf B XS2279560119 LT AAAsf Affirmed AAAsf C XS2279560382 LT A+sf Affirmed A+sf D XS2279560622 LT A+sf Affirmed A+sf E XS2279560978 LT CCCsf Affirmed CCCsf Finsbury Square 2021-2 PLC A XS2400370255 LT AAAsf Affirmed AAAsf B XS2400370412 LT AAAsf Affirmed AAAsf C XS2400372624 LT A+sf Affirmed A+sf D XS2400373192 LT A+sf Upgrade Asf E XS2405114872 LT A-sf Upgrade BBBsf F XS2405115259 LT BB+sf Upgrade BBsf G XS2405115507 LT CCCsf Affirmed CCCsf X1 XS2400373945 LT BB+sf Affirmed BB+sf X2 XS2400374166 LT B-sf Affirmed B-sf X3 XS2405116224 LT B-sf Affirmed B-sf Transaction Summary The transactions are securitisations of owner-occupied (OO) and buy-to-let (FSQ21-1 & FSQ21-2) mortgages originated by Kensington Mortgage Company Limited (KMC) and backed by properties in the UK. KEY RATING DRIVERS UK RMBS Rating Criteria Updated: The rating actions reflect Fitch's updated UK RMBS Rating Criteria (see "Fitch Ratings Updates UK RMBS Rating Criteria" dated 23 May 2025). Key changes include updated representative pool weighted average foreclosure frequencies (WAFFs), changes to sector selection, revised recovery rate assumptions and changes to cashflow assumptions. The non-confirming sector representative 'Bsf' WAFF has had the most significant revision. Newly introduced borrower-level recovery rate caps are applied to underperforming seasoned collateral. Dynamic default distributions and high prepayment rate assumptions are now applied rather than the previous static assumptions. Transaction Adjustment: Fitch applied its prime assumptions, as well as an OO transaction adjustment of 1.2x and a BTL transaction adjustment of 1.1x. These are consistent with the originator adjustments applied under the previous version of the UK RMBS Rating Criteria. Increasing CE: Credit enhancement (CE) has increased since the last rating action in September 2024 due to the sequential amortisation of the notes and static reserve funds. CE for the most senior notes has increased from 35.7%, 43.6% and 51.4% to 58.8%, 58.2% and 57.1% for Gemgarto, FSQ21-1 and FSQ21-2, respectively. Gemgarto's revolving period has ended and both FSQ transactions have breached revolving limits, leading to all transactions amortising rather than purchasing new assets. CE build-up has supported the rating actions. Worsening Asset Performance: Asset performance for the transactions has deteriorated since its last rating actions. As of the latest interest payment date, the proportion of loans in arrears for more than one month for FSQ21-1 has increased to 7.7% from 6.5% since previous review, to 4.9% from 4.5% for FSQ21-2, and to 18.5% from 13.0% for Gemgarto. The increases are largely due to the paydown of the portfolios rather than new arrears. This could lead to potential tail risks for the junior notes. Consequently, the upgrades of FSQ21-2's class D, E and F notes have been limited to below their respective model-implied ratings. Liquidity Access Constrains Ratings: The transactions feature dedicated liquidity reserves to mitigate payment interruption risk. However, these only cover interest shortfalls on the class A and B notes. As a result, all class C notes, as well as the class D notes of Gemgarto and FSQ21-2 have been capped at 'A+sf'. Self-Employed Borrowers: KMC may lend to self-employed borrowers based on only one year's income verification. Fitch views this practice as less conservative than that of prime, high street lenders. Loans extended to self-employed borrowers comprise material portions of the pools. Fitch raised the FF by 30% for self-employed borrowers with verified income instead of the typical 20% increase, in line with its criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transactions' performance may be affected by adverse changes in market conditions and the economic environment. Weakening economic performance is strongly correlated to increasing delinquencies and defaults that could reduce CE available to the notes. In addition, unexpected declines in recoveries could result in lower net proceeds, which may make certain notes susceptible to negative rating action, depending on the extent of the decline in recoveries. Fitch found that a 15% increase in the WAFF and 15% decrease of the weighted average recovery rate (WARR) would not lead to any model-implied downgrades to any of the notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable to improved asset performance driven by stable delinquencies and defaults would lead to increasing CE and, potentially, upgrades. Fitch found that a 15% decrease in the WAFF and 15% increase of the WARR would imply the following model-implied upgrades for FSQ21-2: Class E: 'A+sf' Class F: 'A+sf' USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Finsbury Square 2021-1 Green plc, Gemgarto 2021-1 PLC 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. Prior to the transaction closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Prior to the transaction closing, Fitch conducted a review of a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. Finsbury Square 2021-2 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. Prior to the transaction closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. JOHN GILLMAN: Alvarez & Marsal Named as Administrators ------------------------------------------------------ John Gillman & Sons (Electrical) Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in Manchester, Insolvency and Companies List (ChD), No CR-2025-MAN-001205, and Michael Denny and Michael Magnay of Alvarez & Marsal Europe LLP were appointed as administrators on Aug. 26, 2025. John Gillman & Sons, trading as Domestic Appliance Distributors, engaged in the retail sale of electrical household appliances in specialised stores. Its registered office is at Domestic Appliance Distributors Henry John House, Northway Lane, Ashchurch, Tewkesbury, GL20 8JH Its principal trading address: Domestic Appliance Distributors Henry John House, Northway Lane, Ashchurch, Tewkesbury, GL20 8JH The joint administrators can be reached at: Michael Denny Michael Magnay Alvarez & Marsal Europe LLP Suite 3 Regency House, 91 Western Road, Brighton, BN1 2NW Tel No: +44-(0)20-7715-5200 For further details, contact: Sarah Elt Alvarez & Marsal Europe LLP Tel No: +44(0)20-7715-5223 Email: INS_JOGSEL@alvarezandmarsal.com SEX BRAND: Oury Clark Named as Administrators --------------------------------------------- Sex Brand Ltd was placed into administration proceedings in the High Court of Justice, Court Number: CR-2025-005958, and Nick Parsk and Carrie James of Oury Clark Chartered Accountants were appointed as administrators on Aug. 29, 2025. Sex Brand engaged in the retail sale of cosmetic and toilet articles in specialised stores. Its registered office is at 85 Great Portland Street, First Floor, London, W1W 7LT Its principal trading address is at Arch 227, Blenheim Grove, London, SE15 4QL The joint administrators can be reached at: Nick Parsk Carrie James Oury Clark Chartered Accountants Herschel House, 58 Herschel Street Slough, Berkshire, SL1 1PG For further details, contact: The Joint Administrators Email: IR@ouryclark.com Alternative contact: Emma Adams TSTS WHOLESALE: Quantuma Advisory Named as Administrators --------------------------------------------------------- TSTS Wholesale Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts of England and Wales, Insolvency & Companies List (ChD), Court Number: CR-2025-005151, and Michael Kiely and Andrew Andronikou of Quantuma Advisory Limited were appointed as administrators on Sept. 1, 2025. TSTS Wholesale, trading as The Sea, The Sea, engaged in the wholesale of fish, crustaceans and molluscs. Its registered office is at Britannia Court, 5 Moor Street, Worcester, WR1 3DB and it is in the process of being changed to c/o Quantuma Advisory Limited, 7th Floor, 20 St Andrew Street, London, EC4A 3AG Its principal trading address is at Unit 1, The Fish Market, Buller Quay, East Looe, Cornwall PL13 1DX; Unit 2, New Granite Quay, East Looe, Cornwall PL13 1DX; Arch 337, Acton Mews, London E8 4EA The joint administrators can be reached at: Michael Kiely Andrew Andronikou Quantuma Advisory Limited 7th Floor, 20 St. Andrew Street London, EC4A 3AG For further details contact: Elliot Segal Tel No: 020 3856 6720 Email: elliot.segal@quantuma.com ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *