250922.mbx

250922.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, September 22, 2025, Vol. 26, No. 189 Headlines F R A N C E ERAMET SA: Fitch Lowers IDR to 'BB-', On Watch Negative EUTELSAT COMMUNICATIONS: S&P Withdraws 'B-' Issuer Credit Rating HESTIAFLOOR 2: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable G E O R G I A SILK ROAD: Fitch Rates USD400MM Unsec. Notes Due 2030 'BB-' G E R M A N Y GRUNENTHAL PHARMA: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable PROTECT HOLDCO: S&P Assigns Preliminary 'B' LT ICR, Outlook Stable I R E L A N D ADAGIO VII: Fitch Affirms 'B-sf' Rating on Class F Notes ARES EUROPEAN X: Fitch Affirms 'BB-sf' Rating on Class F Notes AURIUM CLO VII: Fitch Assigns 'B-sf' Final Rating on Cl. F-R Notes AVOCA CLO XXIX: S&P Assigns B-(sf) Rating on Class F-R Notes AVOCA CLO XXXIII: S&P Assigns B-(sf) Rating on Class F Notes BBAM EUROPEAN IV: S&P Assigns B-(sf) Rating on Class F-R Notes CVC CORDATUS XXXVI: Fitch Assigns 'B-sf' Rating on Class F Notes INVESCO EURO XVI: S&P Assigns B-(sf) Rating on Class F Notes LEGATO EURO I: Fitch Assigns 'B-sf' Final Rating on Class F Notes VOYA EURO IX: Fitch Assigns 'B-(EXP)sf' Rating on Class F Notes I T A L Y SAMMONTANA ITALIA: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable K A Z A K H S T A N KAZAKHSTAN UTILITY: Fitch Alters Outlook on 'BB-' IDR to Negative L U X E M B O U R G INEOS GROUP: Fitch Lowers LongTerm IDR to 'BB-', Outlook Negative SPEED MIDCO: S&P Assigns 'B+' Rating, Outlook Stable P O L A N D BANK OCHRONY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable INPOST SA: Fitch Rates EUR850MM 4% Unsecured Notes 'BB+' P O R T U G A L TAGUS STC: Fitch Hikes Rating on Class E Notes to BB- T U R K E Y LIMAK YENILENEBILIR: Fitch Alters Outlook on 'BB-' IDR to Negative U N I T E D K I N G D O M ARAMIT PROPERTIES: Grant Thornton UK Named as Administrators AVONDALE ENVIRONMENTAL: BDO LLP Named as Administrators CMG LEISURE: Exigen Group Named as Administrators CRICHTON MANUFACTURING: Exigen Group Named as Administrators G.R. & M.M. BLACKLEDGE: Interpath Named as Administrators ITHACA ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ITHACA ENERGY: Fitch Rates EUR400MM Notes Due 2031 'BB-' ITHACA ENERGY: S&P Rates New EUR400MM Unsec. Notes 'BB-' NP ENERGY: SPK Financial Named as Administrators POWERTRAIN WARWICK: Begbies Traynor Named as Administrators TOGETHER ASSET 2024-1ST1: Fitch Affirms BB+sf Rating on Cl. E Notes UK COMMUNIIITY 1: Grant Thornton Named as Administrators VENATOR MATERIALS: S&P Downgrades ICR to 'D' Then Withdraws Rating VODAFONE GROUP: Fitch Assigns BB+ Rating on Sub. Hybrid Securities - - - - - =========== F R A N C E =========== ERAMET SA: Fitch Lowers IDR to 'BB-', On Watch Negative ------------------------------------------------------- Fitch Ratings has downgraded Eramet S.A.'s Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB-' from 'BB' and placed the ratings on Rating Watch Negative (RWN). The Recovery Rating is 'RR4'. The actions reflect its expectations of weaker earnings in 2025-2026. Eramet's debt is high following the 2024 acquisition of the remaining stake in its Centenario lithium project in Argentina, and free cash flow (FCF) remains negative. Fitch expects Fitch EBITDA net leverage to rise to around 4.5x before moderating to 3.0x-3.5x in 2027-2028. Eramet is undertaking an in-depth review of its asset portfolio to improve performance and maximise value. Forecast leverage is high, even for the current 'BB-' IDR. Fitch has placed the ratings on RWN pending the company's operational review outcome and resulting actions. Fitch will re-assess the credit profile to determine whether changes to the mid-term business plan will support a return to a more conservative financial profile. Resolution of the RWN may take longer than six months. Key Rating Drivers Earnings Under Pressure: Fitch now forecasts much lower 2025 and 2026 EBITDA of EUR350 million-400 million together with EUR95 million-100 million of dividends from WedaBay, a nickel mine in Indonesia, factoring in the slower ramp-up of Centenario, Eramet's lithium greenfield project in Argentina, and the weaker dollar. All Eramet's commodities are well supplied into the markets, so weaker global growth and uncertainty around global trade have pushed down prices across manganese, mineral sands and lithium. Fitch assumes earnings will improve by around EUR200 million due to firmer prices in 2027 and 2028 and Centenario operating at capacity. Operational Review Under Way: In June 2025 the company started a review of operating performance, efficiency benchmarking and value assessment for all its assets. No findings have been announced so far, but Fitch would expect a detailed action plan by the time full-year results are published in February 2026. Financial Policy in Focus: Eramet has a target net debt/adjusted EBITDA below 1.0x (by company definitions) on average through the cycle. Leverage by the company's measure rose to 1.8x after it took full ownership of the Centenario project in 2024; in June 2025 it was reported at 2.7x and at end-2025 it may be at or above 3.5x. To remain commensurate with a 'BB-' IDR, a commitment to a more conservative financial profile by implementing a credible plan of returning to neutral or positive free cash flow generation, and absolute debt reduction are key considerations. Leverage Still High for 'BB-' Rating: Its rating forecast indicates EBITDA net leverage of around 4.5x for 2025 and 2026, which is more in line with a 'B' category rated peers. Fitch expects EBITDA net leverage to fall to 3.0x-3.5x for 2027 and 2028, still weak for the 'BB-' IDR. Fitch will therefore reviews the action plan after conclusion of the operational review to assess the company's financial profile compared to its forecast and its ability to deleverage over the forecast horizon. Favourable Cost Position: Fitch estimates that Eramet is positioned in the second quartile on average across its portfolio. CRU places the manganese operations in the first/second quartile for business costs and Fitch expects them to represent close to 60% of earnings in 2027-2028. Guidance for the Centenario lithium project in Argentina indicates a placement in the lower half (around 15% of earnings in future), and CRU ranks nickel operations at WedaBay around the 50th percentile for all-in sustaining costs (Fitch estimates dividends at 12%-13% of combined earnings in the longer term). Indonesian Country Ceiling Applied: EBITDA from operations in France, Norway and the US, together with repatriation of dividends from Indonesia, are sufficient to cover hard-currency gross interest expense of the holding company over 2025-2028. Fitch has applied Indonesia's Country Ceiling of 'BBB' as it is the lowest among these countries. Peer Analysis Endeavour Mining plc (BB/Stable) is a major international gold producer, with annual production of 1.1 million -1.3 million oz over the medium term, and the largest in West Africa. The company's financial policy aims for net debt/EBITDA below 0.5x through the cycle. The group may exceed this target during capital-intensive growth as long as there is a clear deleveraging path after the commissioning of those assets. The company has a strong track record of project execution and sticking to its financial policy. Eramet's financial policy is wider, with net debt/adjusted EBITDA below 1.0x through the cycle, and debt has been rising quickly in 2024 and 2025 without management taking action. In addition, the Centenario project experienced cost over-runs and now is behind schedule on commissioning. Both companies have asset portfolios ranked in the second quartile of the applicable all-in sustaining cost curves and operations are located in jurisdictions with weaker operating environments. Eramet has a longer reserve life at 20 years or more; Endeavour's is around 10 years. Key Assumptions - Manganese ore price CIF China of USD4.40 per dry metric tonne unit (dmtu) in 2025 and 2026, USD4.75 in 2027 and 2028 - LME spot nickel price of USD15,300 per tonne in 2025 and USD15,000 in subsequent years - Lithium carbonate price of USD9,500 per tonne in 2025, USD10,000 in 2026, USD12,000 in 2027 and USD12,500 in 2028 - Volumes of manganese ore transported of 6.75 million tonnes in 2025 and increasing to 7.25 million tonnes by 2028; volumes of nickel ore sales in line with quotas granted in Indonesia; volumes of lithium carbonate equivalent of 4 thousand tonnes (kt) in 2025, 12kt in 2026, and 24kt in 2027 and 2028 (all Fitch assumptions taking account of the company's public guidance) - Capex of EUR440 million in 2025 and on average EUR325 million over 2026-2028 - Dividends received from associates net of dividends to be paid to minorities of EUR40 million in 2025, EUR60 million for 2026 and 2027 and EUR40 million in 2028 - No defined pay-out ratio for dividends; dividend reducing by 50% for 2026-2028 - As Eramet has committed to not provide any more funding to Societe Le Nickel (SLN) in New Caledonia, Fitch has taken the most economic financial view by de-consolidating SLN. Its forecasts for EBITDA, gross debt, net debt and leverage therefore exclude SLN RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 3.2x (capturing recurring dividends from associates and minority dividends paid) on a sustained basis (2025: expected 4.5x) - EBITDA interest coverage below 3.5x on a sustained basis (2025: expected 2.8x) - Centenario not ramping up towards nameplate capacity - Weakening dividend stream from WedaBay and earnings contributions from manganese alloy businesses in France, Norway and the US Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The RWN makes positive rating action unlikely in the short term. The following factors could lead to the ratings being removed from RWN, and being affirmed with a Stable or Negative Outlook: - EBITDA net leverage below 3.2x (capturing recurring dividends from associates and minority dividends paid) on a sustained basis (2025: expected 4.5x) - Free cash flow to turn neutral or positive, and absolute net debt reduction Liquidity and Debt Structure At June 2025, Eramet had more than EUR1.5 billion of liquidity across cash and cash equivalents, and its EUR935 million of committed revolving credit facilities (June 2029 maturity). The company is funded until end-2027, but Fitch expects some refinancing in 2026, given the high liquidity headroom the group has historically maintained. Issuer Profile Eramet is a French mid-sized metals and mining company with competitive assets in manganese (ore and alloys) in Gabon, nickel in Indonesia, and mineral sands in Senegal. Construction of Centenario in Argentina has concluded and the operation is in ramp up. 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 ----------- ------ -------- ----- Eramet S.A. LT IDR BB- Downgrade BB senior unsecured LT BB- Downgrade RR4 BB EUTELSAT COMMUNICATIONS: S&P Withdraws 'B-' Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings withdrew its 'B-' issuer credit rating on Eutelsat Communications S.A., the 'B-' issue rating on Eutelsat Communications' debt, and the 'B' issue rating on Eutelsat S.A.'s debt, at the issuer's request. S&P placed the rating on CreditWatch with positive implications on July 3, 2025 on the announced equity injection, expected to be completed before the end of 2025. The ratings were on CreditWatch with positive implications at the time of the withdrawal. HESTIAFLOOR 2: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable --------------------------------------------------------------- Fitch Ratings has upgraded Hestiafloor 2's (Gerflor) Long-Term Issuer Default Rating (IDR) to 'B+' from 'B'. The Outlook is Stable. Fitch has also upgraded the company's senior secured debt rating to 'BB-' from 'B+', with a Recovery Rating of 'RR3'. The upgrade reflects Gerflor's sound profitability supporting leverage below the previous positive rating sensitivity while its solid business profile benefits from an increasing exposure to resilient renovation end-markets. The Stable Outlook reflects its expectation of continued sound operating profitability supported by the group's end-market diversification and underpinning positive free cash flow (FCF) generation, predominantly used to finance the company's acquisition-led growth strategy. Key Rating Drivers Reduced Leverage: The rating is supported by the reduction in leverage over 2022-2024 (Fitch-defined leverage declined to 5.3x from 7.0x against the previous positive rating sensitivity of 5.5x) and expected modest deleveraging over the next four years. Fitch estimates Fitch-defined EBITDA leverage of about 5.4x at end-2025, with gradual deleveraging to about 4.7x by end-2028, mainly driven by mid-single-digit revenue growth and a modest increase in EBITDA margins. Fitch assumes positive FCF in 2025-2028 will be mainly used for continued bolt-on acquisitions. Resilient Operating Profitability: Fitch expects continued resilient operating profitability (Fitch-defined EBITDA margin around 13.5% during 2025-2028), mainly supported by the group's sound end-market diversification and focus on more resilient renovation end-markets (about 80% of the company's revenue) with limited exposure to pressured residential and office end-markets. Fitch expects continued normalisation of raw material and transportation costs over the rating horizon. The group's profitability will be further supported by the contribution from new bolt-on acquisitions and new product launches. Solid Business Profile: Gerflor's business profile is supported by strong positions in several flooring segments across geographic regions and end-customer segments. The company's Contract division is driven by renovation flooring, which is less cyclical than new build and accounts for 75%-80% of revenue, with exposure to stable commercial end-markets such as education, healthcare and transport. Positive FCF: Fitch expects positive FCF margins in 2025-2028, trending to above 1.5% by 2028 from 0.4% for 2025. Fitch expects that resilient operating profitability will be partly offset by continued high interest costs, steady capex (average EUR57 million in 2025-2028 compared with an average EUR47 million in 2021-2024) and working-capital investments required to support Gerflor's expected mid-single-digit revenue growth. Continued Acquisitive Strategy: Fitch expects Gerflor to continue its M&A-driven growth strategy and assume total new net acquisitions of about EUR40 million in 2025 and EUR30 million annually over 2026-2028. Fitch expects acquisitions to be moderate in size and financed by a recent debt add-on and internally generated cash flows. The group has a successful integration record and policy of acquiring companies with a clear strategic fit at sound valuation multiples. Nevertheless, the M&A pipeline, deal parameters and post-merger integration remain important rating drivers. Achievable Financial Targets: Management indicated a commitment to further deleveraging toward (company-defined) EBITDA net leverage of around 4.4x in 2025-2026, which is supported by the shareholders' record of providing equity injections to finance larger acquisitions. Fitch views this as achievable and supportive of the rating. Fitch also expects the company to refrain from meaningful dividend payments should leverage exceed targeted levels. Peer Analysis Gerflor has a leading market position in its resilient niche flooring segment and is larger than building product peers such as Terreal Holding SAS or PCF GmbH (CCC+), and similar in size to Victoria PLC (CCC). It is much smaller than Mohawk Industries, Inc. (BBB+/Stable) and slightly smaller than Tarkett Participation (B+/Positive). Gerflor has better geographical diversification than Victoria, although both have fairly high exposure to Europe. Tarkett is more geographically diversified. Like most building-product companies, Gerflor has limited product differentiation but has developed innovative product solutions, enabling it to cater to a wide range of end-customers. Gerflor's distribution channels result in a strong exposure to renovation or refurbishment construction activities similar to that of Tarkett. Gerflor's EBITDA margin (13.5% in 2024) is stronger than that of Tarkett (7%-8%), Victoria (7%-10%) and PCF (6%-10%). Fitch sees Gerflor's leverage profile (expected EBITDA leverage of 5.4x-4.7x in 2025-2028) as weaker compared with 4.4x-4.2x for Tarkett over the same period. Key Assumptions - Revenue to rise by 4% in 2025 on organic growth and acquisitions and price, followed by low single-digit growth in 2026-2028 - EBITDA margin around 13.5% in 2025-2028, reflecting supportive end-markets - Capex at 3.5% of revenue in 2025-2028 - M&A of around EUR40 million in 2025 and EUR30 million in 2026-2028 - Limited dividend pay-out in 2025-2028 Recovery Analysis The recovery analysis assumes that Gerflor would be reorganised as a going concern in bankruptcy rather than liquidated. Fitch assumes a 10% administrative claim. Factoring line and other credit facilities rank super senior. The going-concern EBITDA estimate of EUR150 million reflects the most recent and ongoing debt-funded acquisitions at adequate multiples and its view of a sustainable, post-reorganisation EBITDA upon which Fitch bases the valuation of Gerflor. In this scenario, Gerflor would generate neutral to negative FCF. Fitch uses an enterprise value multiple of 5.5x to calculate a post-reorganisation valuation. This reflects Gerflor's leading position in its niche markets (such as sport and transport), long-term relationship with blue-chip clients and a loyal customer base due to its direct distribution channel. Its waterfall analysis (including overdraft facilities and bilateral bank loans of EUR77 million as of end-June 2025) generates a ranked recovery for the senior secured debt (EUR950 million term loan B and EUR210 million revolving credit facility) in the 'RR3' category leading to a 'BB-' rating for the secured debt. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 5.5x - EBITDA interest coverage below 3.0x - Neutral to negative FCF margin Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Application of conservative financial policy with EBITDA gross leverage below 4.0x - FCF margins above 3% on a sustained basis - Greater diversification across segments or geographies Liquidity and Debt Structure At end-June 2025, Gerflor had around EUR30 million of Fitch-adjusted cash balance (excluding about EUR14 million restricted for intra-year working capital swings) and access to EUR205 million revolving credit facility (EUR5 million drawn out of EUR210 million available at end-June 2025) due 2029. Fitch forecasts that positive FCF in 2025-2028 will be mainly used for ongoing bolt-on acquisitions. The group's debt structure is dominated by its EUR950 million term loan B due 2030. Issuer Profile France-based Gerflor specialises in resilient flooring (vinyl and linoleum) and walls and finishes solutions that are primarily sold to commercial customers. Operations span primarily across European countries and the Americas and Asia Pacific. 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 ----------- ------ -------- ----- Hestiafloor 2 LT IDR B+ Upgrade B senior secured LT BB- Upgrade RR3 B+ ============= G E O R G I A ============= SILK ROAD: Fitch Rates USD400MM Unsec. Notes Due 2030 'BB-' ----------------------------------------------------------- Fitch Ratings has assigned a final Long-Term Rating of 'BB-' to Silk Road Group Holding LLC's USD400 million senior unsecured notes due 2030. This is on par with Silk Road's Issuer Default Rating of 'BB-' with Stable Outlook. The instrument's Recovery Rating is 'RR4'. The new instrument is structured as senior unsecured obligations of the company, with the proceeds to refinance all of its debt, including at the subsidiary level, and bolster its liquidity. The bond aligns with Fitch's expectations and an earlier assigned 'BB-(EXP)' rating. Silk Road's main rating drivers are unchanged and provided below. The ratings reflect the company's ownership of Silknet, the second-largest telecoms operator in Georgia, with stable market positions, as well as profitable luxury hotel and casino operations. These businesses generate strong internal cash flow, which Fitch expects will be broadly sufficient to fund new real estate development on Silk Road's own land. The ratings consider its expectation that EBITDA net leverage will stay below 2.5x. New construction execution risk, large FX exposure and Georgia's 'bb' economic environment may introduce volatility to future leverage. Key Rating Drivers Telecoms Shape Portfolio Profile: Silk Road's credit profile is primarily shaped by its telecoms segment with Silknet, its 95%-controlled telecoms subsidiary, which contributed about 90% of EBITDA in 2024. The former is organised as a diversified conglomerate in the telecoms, hotels and casino, and real estate and development subsectors, although with relatively small absolute scale. While the contribution of other segments is likely to increase, telecoms will remain by far the largest subsector and the key free cash flow (FCF) generating part of the group. Entrenched Telecoms Market Positions: Fitch expects Silknet to sustain its competitive positions in a highly consolidated but also relatively stable and small market of 5.8 million mobile and 1.2 million internet retail customers. Georgia is predominantly serviced by two large operators, Magticom and Silknet, with the third largest, Cellfie, far behind and other smaller players holding just a fraction of the market. The regulator GNCC estimates that Silknet's revenue market shares were 35% in mobile and 34% in fixed broadband retail subsectors in 2Q25. 5G Spectrum Secured: Silknet managed to get sizable 5G spectrum in June 2025, which successfully addressed its previous strategic disadvantage versus competitors. Fitch views Silknet as having reached broad spectrum parity with its peers. Real Estate/Development Diversification: Silk Road has plans to expand into real estate and development which will provide some diversification benefits. Real estate and property companies can sustain more leverage than telecoms, with up to 10x EBITDA net leverage consistent with 'bb' EMEA real estate and property navigator sub-factor for financial structure. New development will be on land that is already fully owned by Silk Road which mitigates the execution risks. However, new property development also entails risks of low market demand/low occupancy and construction cost overruns and delays. Subscale Hotel, Gaming Operations: Silk Road's hotel and casino subsector is subscale with only half a dozen hotels and casinos under management, with gaming primarily supporting lodging. However, hospitality operations contribute to more efficient management of the company's real estate portfolio, with all hotels and casinos fully owned. This subsector is strongly cash generative, so it is not weighing on the overall group profile. Macroeconomic Uncertainty: The Outlook on Georgia's sovereign 'BB' rating is Negative, reflecting weak international reserves and heightened political risk. Fitch expects economic growth to remain robust but projects GDP growth moderation to 5.6% in 2025 and 5.2% in 2026, down from 9.4% in 2024. High FX Mismatch: Silk Road has high FX exposure, with leverage sensitive to changes in the lari exchange rate. All its debt and over 70% of its capex are FX-denominated, while nearly all revenue is in local currency. Hotel revenues are soft pegged to FX, which provides a degree of natural hedge. The company is going to maintain sufficient FX cash and potentially FX forward contracts to cover short-term opex and capex needs as well as coupon payments. Substantial FX risk is reflected in conservative leverage thresholds. Cash Diverted to New Development: Fitch projects that Silknet and the incumbent hospitality operations will remain strongly cash flow generative, with most of this internally generated cash aimed at new development. Silknet's EBITDA margins of above 55% and moderate capex requirements of below 25% of revenues propel its pre-dividend FCF margin close to 30%. Overall, Fitch expects Silroad's FCF generation to remain close to break-even until stronger inflows from residential pre-sales push it into positive territory, which is likely to start from 2028. Moderate Leverage: Silk Road's net leverage to remain below 2.5x even at the peak phase of the new development, according to its projections. Cash generation, and ultimately net leverage, are sensitive to pre-sale inflows and Fitch expects the company to adjust the pace of construction to this indicator. Deleveraging will be supported by telecoms expansion and a better contribution from the newly opened landmark Telegraph hotel. Silk Road is targeting to manage its net leverage at below 2x, as per its own definition. Corporate Governance Improving: Fitch expects the company to maintain a good standard of corporate governance, including a fair representation of independent directors on its board, which is vital for balancing the influence of the majority shareholder. With the shareholders consolidating most of their commonly held assets under Silk Road, Fitch believes the risk of exposure to external shareholder projects is limited. The company is ultimately majority controlled by a single individual. Silknet is not a public company, and key creditor protection provisions, including information disclosure, are primarily implemented in its bond documentation. Peer Analysis On the telecom side, Silk Road benefits from its established customer franchise and the wide network of a fixed-line telecoms incumbent, combined with a strong mobile business that is similar to Kazakhtelecom JSC (BBB-/Stable) and Turk Telekomunikasyon A.S. (BB-/Stable). However, Silknet is smaller in size and only the second-largest telecom operator in Georgia. Silk Road's hotel operations have some similarity to FIVE Holdings (BVI) Limited (B+/Stable), as both companies have a relatively small scale and niche market positions. The former's real estate portfolio is comparable to that of Akropolis Group, UAB (BB+/Stable) from a size and high asset concentration perspective, although the latter operates with much higher leverage. Key Assumptions - Mid single-digit telecoms revenue rise on average in 2025-2028 - Hotel and casino revenues increasing by low single-digits in 2027-2028, with the opening of the Telegraph hotel providing a boost in 2025 and, to a lesser degree, in 2026 - Fitch-defined EBITDA margin of slightly above 40% in 2025-2028, with content-cost amortisation treated as operating cash expenses, reducing EBITDA and capex - Recurring capex at 13%-15% of revenues in 2025-2028, with project capex into 5G and new construction adding close to 10% on top of this - Stable GEL80 million of annual dividends in 2026-2028 - GEL/USD rate weakening to 3.0 Recovery Analysis Fitch rates Silk Road's senior unsecured debt at 'BB' in accordance with Fitch's "Corporates Recovery Ratings and Instrument Ratings Criteria", under which Fitch applies a generic approach to instrument notching for 'BB' rated issuers. Fitch labels Silk Road's bond as second lien/unsecured, according to its criteria, resulting in a Recovery Rating of 'RR4' with no notching from its 'BB-' IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage rising above 2.5x on a sustained basis without a clear path for deleveraging in the presence of significant FX risks - Stubbornly negative FCF generation leading to higher net leverage potentially driven by an inability to achieve a significant amount of pre-sale cash inflow - A rise in corporate-governance risks due to, among other things, related-party transactions or up-streaming excessive distributions to shareholders Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Telecoms market leadership in key segments in Georgia combined with stronger diversification into other segments while maintaining positive FCF generation, comfortable liquidity and net leverage sustainably managed at below 1.5x Liquidity and Debt Structure Silk Road will replace its debt, including at its subsidiaries, with the proceeds of the new, USD400 million Eurobond that matures on 15 September 2030. Post-refinancing, the company expects to have more than GEL300 million of cash on the balance sheet that should cover its short-term coupon payments and operating needs. Liquidity is supported by strong cash flow generation in the telecoms and hotels subsectors. Issuer Profile Silk Road owns Silknet, Georgia's second-largest telecoms with a more than 30% market share in the main mobile, broadband and pay-TV subsectors. It also owns several luxury hotels, casinos and residential and office development projects that are located on land that Silk Road owns in Georgia. Date of Relevant Committee 28-Aug-2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Silk Road Group Holding LLC senior unsecured LT BB- New Rating RR4 BB-(EXP) ============= G E R M A N Y ============= GRUNENTHAL PHARMA: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Grunenthal Pharma GmbH & Co. Kommanditgesellschaft's Long-Term Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. Fitch has affirmed the senior secured rating at 'BB+' with a Recovery Rating of 'RR2'. Grunenthal's IDR balances a satisfactory business risk profile with a conservative financial policy, with modest EBITDA leverage around 3.5x. Grunenthal's business risk profile is characterised by a strong niche position in a growing non-cyclical market, resilient margins, and healthy free cash flow (FCF). It is constrained by concentrated portfolio, modest scale, and mild organic sales decline in its base portfolio. The Stable Outlook reflects Fitch's expectation that Grunenthal will adhere to its financial policy and maintain a disciplined approach to acquisitions, which add to growth and diversification of the business with limited execution and integration risks. Fitch views leverage headroom as limited, heightening the focus on the successful execution of selective M&A strategy. Key Rating Drivers Resilient Business Model: The rating reflects that Grunenthal has progressively diversified and repositioned its portfolio and business model through EUR1.2 billion of acquisitions since 2021, complementing its R&D-focused niche position as a leading pain medicine specialist with a cash-generative portfolio of mature off-patent drugs. Grunenthal also benefits from an integrated business model, with strong manufacturing and distribution capabilities in Europe and Latin America. The predictability of established drugs mitigates the impact of potential R&D failures, such as that of its previous lead drug candidate RTX in early 2025. The group has demonstrated efficient capital deployment and diligence in integrating cash generative low-risk drug rights on its own manufacturing and distribution networks. The company's resilience could be tested by several factors, including potential adverse tariff implications and unfavourable foreign-exchange movements, given meaningful exposure to Latin America (22% of sales). Mild Organic Decline to Stabilise: Its rating case assumes a mild -1% organic sales decline in 2025, followed by a mid-single digit organic decline in 2026, driven by generic erosion of its off-patent drugs Palexia and Nebido and a mild decline in most of its off-patent drugs, offsetting the fast growth of Qutenza. Its rating case does not incorporate the potential contribution of its late-stage drug candidates. Fitch expects almost flat organic revenue growth in 2027 and 2028, with growth from Qutenza offsetting the decline of the rest of the portfolio. The negative effect of Palexia's decline will continue to gradually diminish (its contribution to group sales decreased from 22% to 9% in 2024). However, the impact of Qutenza's growth will increase despite a slower pace of growth, as Fitch expects it to contribute more than 15% of group sales in 2026, compared with 8% in 2024. EBITDA Margin to Recover: Fitch-defined EBITDA margins declined to 22.6% in 2023 from 25.6% in 2022 due to Palexia's patent expiry and remained subdued at 22.1% in 2024. Fitch expects margins to gradually improve to 24.7% in 2025, 24.9% in 2026 and 25.9% in 2027, supported by Qutenza and higher EBITDA from the joint venture with Kyowa Kirin, particularly once the group acquires its remaining minority rights in 2026. Underperformance of the existing portfolio or margin-dilutive M&As could weight on overall profitability and pressure the rating. Conservative Financial Policy: The rating is predicated on Grunenthal's adherence to stated financial policies, covenanted leverage levels and deleveraging, particularly after any debt-funded M&A. Fitch factors in the commitment of Grunenthal's founding-family shareholders, as reflected in their medium-term target of reported EBITDA net leverage below 2.5x, much lower than leverage at sponsor-backed leveraged buyouts with an opportunistic financial approach. Departure from the stated target leverage would signal increased risk appetite and put the ratings under pressure. Adherence to Disciplined M&A: Fitch highlights the importance of Grunenthal's disciplined selection of M&A targets, including acquisition economics and asset integration, especially in light of increasing competition from off-patent branded pharmaceuticals, rising asset valuations and cost of capital. Fitch projects opportunistic M&A averaging close to EUR200 million a year over 2025-2028, reflecting Grunenthal's M&A pattern, operating needs and financial policy. This includes the acquisition of the minority rights of its joint venture with Kyowa Kirin in 2026. Successful execution of the disciplined M&A strategy will be important to build rating headroom. Peer Analysis Fitch rates Grunenthal using its Ratings Navigator for pharmaceutical companies. The 'BB' IDR is supported by its integrated cash-generative business model with a portfolio of patented and generic drugs with strong financial credit metrics, reflecting a commitment to conservative financial policies. This offsets the operating risks from a concentrated product portfolio exposed to generic market pressures. Grunenthal is rated above asset-light scalable specialist pharmaceutical companies focused on lifecycle management of off-patent branded and generic drugs such as CHEPLAPHARM Arzneimittel GmbH (B/Stable), Pharmanovia Bidco Limited (B-/Negative) and ADVANZ PHARMA Holdco Limited (B/Stable). Grunenthal also has a higher rating than asset-intensive pharmaceutical companies such as Roar BidCo AB (B/Stable) and European Medco Development 3 S.a.r.l. (B-/Stable), mainly due to its much stronger leverage metrics, with EBITDA leverage below 3.5x versus 5.0x-8.0x for peers. Grunenthal's stronger leverage profile is embedded in its considerably more conservative financial policy and less aggressive M&A strategy. It is larger than most of these peers, but product concentration remains a risk for most non-investment-grade pharmaceutical credits given their niche. Key Assumptions - Volatile revenue profile, with inorganic growth from acquisitions offsetting the organic portfolio decline at low single-digits due to generic and payor pressure - Acquisitions of EUR150 million in 2025 and EUR250 million in 2026, followed by acquisitions averaging EUR200 million over 2027-2028 - EBITDA margin at around 24.7% in 2025, gradually improving towards 26.1% by 2028 - Working capital outflows of EUR100 million in 2025 and around EUR10 million over 2026-2028 - Sustained maintenance capex around 3% of sales, in addition to milestone payments related to previous acquisitions over the next four years - Dividend payments of EUR40 million a year on average from 2025 to 2028 - Flexible use of the revolving credit facility (RCF) to support organic and inorganic growth Recovery Analysis Fitch follows the generic approach for corporates rated 'BB-' or above in accordance with its Corporates Recovery Ratings and Instrument Ratings Criteria. Given the senior secured nature of Grunenthal's debt (single debt class) Fitch classifies its debt as 'category 2 first lien' under the generic approach for rating instruments of companies in the 'BB' rating category based on the criteria. Consequently, Fitch rates Grunenthal's senior secured debt one notch above the IDR, leading to the 'BB+' senior secured rating with a Recovery Rating of 'RR2'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Absence of consistent top line growth, further decline in EBITDA margin, signalling challenges in addressing market pressures or poorly executed M&A with increased execution risks leading to leverage exceeding its sensitivity on a sustained basis - Departure from conservative financial policies and commitment to deleveraging, leading to EBITDA leverage above 3.5x (3.0x net of readily available cash) Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade to 'BB+' is unlikely as it would require an improved business risk profile through increased visibility of positive organic growth combined with improving EBITDA and continued strong FCF margins - A more conservative financial policy with EBITDA leverage trending towards 1.5x (1.0x net of readily available cash) on a sustained basis Liquidity and Debt Structure Fitch projects satisfactory liquidity will be maintained, supported by sustained positive FCF generation, albeit subject to fluctuations in trade working capital, plus performance-related and milestones payments, which Fitch treats as regular capital commitments as they relate to the existing product portfolio. Fitch expects Grunenthal will make flexible use of its upsized EUR600 million RCF due November 2029 to top up liquidity or fund M&A, based on its record and financial policies. Grunenthal's liquidity profile benefits from its RCF with extended maturity, with its senior secured notes due in 2028, 2030 and 2031. Issuer Profile Grunenthal is a German family-owned vertically integrated pharmaceutical company focused on pain therapies and established off-patent drugs. 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 Grunenthal has an ESG Relevance Score of '4' for exposure to social impact, due to the company's reliance on reimbursement policies in its countries of operations, which has a negative impact on the credit profile, and is relevant to the rating 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 ----------- ------ -------- ----- Grunenthal GmbH senior secured LT BB+ Affirmed RR2 BB+ Grunenthal Pharma GmbH & Co. Kommanditgesellschaft LT IDR BB Affirmed BB PROTECT HOLDCO: S&P Assigns Preliminary 'B' LT ICR, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary 'B' long-term issuer credit rating to Protect HoldCo GmbH (the parent of uvex group, which will produce consolidated accounts) and our preliminary 'B' issue rating to the proposed EUR400 million TLB due 2032. The stable outlook reflects S&P's expectations that uvex will maintain leverage at 5.0x-5.5x in fiscal 2026, S&P Global Ratings-adjusted funds from operations (FFO) cash interest coverage comfortably above 2.0x, and annual free operating cash flow (FOCF; after leases) of EUR19 million-EUR23 million. On July 1, 2025 Warburg Pincus (the financial sponsor) announced the acquisition of a controlling stake in the Germany-based global player in safety personal protective equipment uvex group, a transaction we expect to close by year-end 2025. The existing family shareholders will retain a significant minority stake. Uvex plans to issue a EUR400 million senior secured term loan B (TLB) due in 2032. The transaction includes an equity injection, which mainly consist of preferred shares. Total expected cash proceeds will fund the purchase consideration (including transaction fees) and to refinance existing capital structure. Uvex has overall good diversification in terms of product categories and customers, with a focus on premium products. For fiscal 2024, uvex generated EUR661.2 million in sales with an S&P Global Ratings-adjusted EBITDA of EUR85.9 million. Uvex benefits from good market positions in the fragmented personal protective equipment (PPE) industry. The global PPE industry is very fragmented, despite the presence of large multinationals including 3M Co. (BBB+/Stable/A-2), Ansell Ltd. (not rated), and PIP/Gloves Buyer Inc. (B-/Positive/--). Uvex is the PPE market leader in the DACH region (Germany, Austria, and Switzerland), with an estimated average market share of about 10%. In the U.S. (about 21% of total sales 2024), the group has an estimated market share of about 5% within its core gloves segment. S&P said, "In our view, the PPE industry has positive underlying growth fundamentals, including the tightening of safety standards in mature markets, product premiumization, and the increased use of PPE equipment per user. Over the next five years, we expect the overall industry to have a 3%-5% compound annual growth rate (CAGR), although we expect trends to vary by product category and end-markets." The group's strong brand reputation is mainly supported by its premium product offering with loyal customer relationships. S&P said, "Of uvex's PPE products, 50%-60% are manufactured in-house which, in our view, enables the group to have better flexibility in its supply chain, coupled with higher control of the quality of the manufacturing process and, hence, of the final products. Reflecting this, 60%-70% of uvex's PPE revenue is customized or premium (customized accounts for 30%, which compares favorably with that of competitors), which compares positively with the estimated 50% for its competitors. We think the quality and reliability of the products are essential differentiators in the protective apparel industry, where safety is of the utmost importance for end-customers." The group's quality reputation results in long-standing relationships with customers (mainly distributors), with the top 60 having used uvex's brands for more than three years. The company has a diverse customer base and solid internal sales network. About 76% of uvex sales are through distributors, which are the group's main customers, with the remaining being directly to end-customers (business-to-business and, to a small extent, business-to-customer through its online channel), particularly in the DACH region, where 50% of the region's sales are direct. In this sense, the group's top 10 distributors account for 25%-30% of total revenue. Positively, behind the group's distributor network, there are many end-customers. In fact, uvex's top three direct end-customers account for less than 5% of total revenue. The group has an internal sales representative workforce of about 290 employees with offices in more than 20 countries, which influence distributors' assortment choices. Uvex's revenue base is smaller than for other global competitors and its business exhibits some geographical and end-market concentration. The revenue base of about EUR661 million in 2024 is about 22% lower than that of one of its U.S.-based direct competitor Gloves Buyer and substantially lower than other larger global competitors such as 3M or Ansell. In addition, despite producing and distributing in many countries and regions globally, about 50% of the group's revenue comes from the DACH region, with Germany alone accounting for 40%. Uvex is also concentrated to cyclical and challenging end-markets (such as auto, oil and gas, and construction), with about 50% of its PPE revenue in Europe from the auto and machinery end-markets. In particular, the main end-market in Europe for uvex includes auto (accounting for about 25% of PPE sales 2024 in Europe). The European auto sector is facing a challenging industry environment; this aspect, together with industrial automation process and the general trend toward some delocalization of European manufacturing capabilities (especially toward southeast Asian countries) could put additional pressure on volume for PPE products in Europe. S&P said, "However, we expect the group to gain further exposure to less cyclical and growing end-markets, including defense, fire and rescue, and transportation. We also expect uvex to gradually reduce revenue exposure to the DACH region over the medium term as it accelerates the expansion into the U.S." S&P said, "We expect some gradual improvement in profitability, although it is lower than that of some direct peers. In our view, the company has demonstrated some resilience in its operating performance, with overall positive group's track record in terms of revenue growth (with a CAGR of 5% from 2006-2025B) while maintaining gross margins of 48%-54%. Looking at comparable EBITDA margins (including lease adjustments, and excluding capitalized research and development [R&D] costs, one-off restructuring costs linked to the sports division, and the Russia contribution), the company posted a margin close to 12% in 2024, which is below that of some direct peers. This is mainly due to the underuse of its own manufacturing facilities (particularly in the sport protective equipment [SPE] division), in-house production process mainly taking place in high-cost countries, and loss-making performance of the group's sport division. For fiscal 2025, we expect an S&P Global Ratings-adjusted EBITDA margin of about 11%, affected by tariffs, relatively higher staff costs, and some ongoing restructuring initiatives (including warehouse closure, and supply chain optimization). We expect the margin to approach 12%-13% in 2026 and 2027 thanks to the benefits of optimization measures, which include some outsourcing of the PPE division's labor-intensive manufacturing steps and footprint optimization with centralization of warehouses. In addition, we expect the sports division's profitability to turn slightly positive, while we expect a positive geographical mix contribution, owing to higher growth in the U.S. market. We also expect uvex to gain further market share in the margin-accretive U.S. by introducing more products to the region's offering--which currently consists mainly of gloves--such as footwear and eyewear." However, the group's growth strategy entails execution risks. In particular, risks relate to the highly competitive landscape in the U.S., the cost pass-through of tariff-related expense, and synergies from its restructuring plan. The sport division (20% of total sales 2024) has been loss-making for several years, although the company expects it will contribute positively to the group's EBITDA from 2026 onward. Uvex operates in the SPE segment in cycling and winter sport with focus on bike helmet, ski equipment, and sport eyewear. This division focuses on the DACH region (more than 70% of its sales) and over the past few years, posted flattish performance in terms of sales growth, while it was loss-making in terms of EBITDA. Therefore, management restructured this division in fiscal years 2023-2025 (with total one-off restructuring costs of EUR20 million-EUR25 million) with the decision to fully outsource its manufacturing activities (buy-only strategy). Management estimates these new conditions will yield a 25% savings over the previous in-house production system. S&P said, "As a result, we expect the division's margins to gradually improve in 2026, although we estimate low single digit EBITDA margin for this division of 3%-4%. We understand the sports division remains core to the group's strategy, boosting brand awareness and visibility--particularly in the DACH region." According to management, brands within the sports division have an iconic and heritage status creating a supportive ecosystem to boost the safety division, coupled with ongoing synergies in terms of innovation and R&D focus. S&P said, "We expect uvex to generate positive recurring cash flow, with annual FOCF (after leases) of EUR21 million-EUR28 million in 2026-2027. We anticipate annual capital expenditure (capex) at 3.0%-3.5% of 2026-2027 (down from 4.8% in 2024) due to the phasing out of the restructuring plan's implementation. We assume moderate working capital outflows to support organic top-line growth, especially in the U.S. market. "We forecast the group to post adjusted debt to EBITDA of about 5.5x at year-end 2026 (post-transaction), with gradual deleveraging thereafter. We expect the company to deleverage close or below 5.0x in 2027, owing to a moderate increase in EBITDA thanks to organic revenue growth and cost optimization initiatives. Total adjusted debt post-transaction will include a EUR400 million TLB, about EUR16 million of real estate loans, EUR30 million-35 million in operating leases, and about EUR18 million of net pension liabilities. Uvex's new capital structure includes preference shares and a shareholder loan, which we treat as equity, according to our criteria. "The final ratings will depend on our receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary ratings should not be construed as evidence of the final ratings. If the terms and conditions of the final transaction depart from the material we have already reviewed, or if the transaction does not close within what we consider to be a reasonable timeframe, we reserve the right to withdraw or revise our ratings. "The stable outlook reflects our expectation that uvex will expand its sales by 5%-7% over the next couple of years with some moderate improvements in its adjusted EBITDA margin at 12%-13%, underpinned by higher growth in U.S. market (enlarging product offering), benefits from restructuring in the sports division, and some pricing actions. We estimate this will translate into adjusted debt to EBITDA of 5.0x-5.5x and positive annual FOCF (after leases) of EUR19 million-EUR23 million in 2026. "We could lower the rating on uvex if its S&P Global Ratings-adjusted debt to EBITDA approaches or passes 7.0x with limited prospects of deleveraging, or in case the company is unable to generate positive recurring FOCF. Under this scenario, the company's FFO cash interest coverage ratio will likely deteriorate below 2.0x. This could happen if the penetration strategy in the U.S. is not successful due to aggressive competition and material volume decline in the DACH market, translating into meaningful deteriorations of profitability and market share. "We could consider an upgrade if we see that uvex increases its product diversification and the size of its operations, while posting profitability levels that outperform our forecast. This should be in tandem with a track record of the adjusted debt to EBITDA ratio being well below 5.0x sustainably, alongside a clearly stated commitment to maintain a debt-leverage ratio at that level or below, and good recurring FOCF after leases." ============= I R E L A N D ============= ADAGIO VII: Fitch Affirms 'B-sf' Rating on Class F Notes -------------------------------------------------------- Fitch Ratings has upgraded Adagio VII CLO DAC's classes B-1, B-2, C-1, C-2 and D, and affirmed the others. Entity/Debt Rating Prior ----------- ------ ----- Adagio VII CLO DAC A XS1861326459 LT AAAsf Affirmed AAAsf B-1 XS1861326707 LT AAAsf Upgrade AA+sf B-2 XS1861327002 LT AAAsf Upgrade AA+sf C-1 XS1861327267 LT AAsf Upgrade Asf C-2 XS1861327697 LT AAsf Upgrade Asf D XS1861327853 LT Asf Upgrade BBB+sf E XS1861325568 LT BBsf Affirmed BBsf F XS1861326293 LT B-sf Affirmed B-sf Transaction Summary Adagio VII CLO DAC is a cash flow CLO mostly comprising senior secured obligations. The transaction is actively managed by AXA Investment Managers, Inc., and exited its reinvestment period on 10 January 2023. KEY RATING DRIVERS Amortisation Benefits Senior Notes: The transaction continues to deleverage, with the class A notes having paid down by about EUR142.6 million since October 2024. The amortisation has resulted in an increase in credit enhancement for the senior notes, which has driven the upgrades of the classes B-1, B-2, C-1, C-2 and D notes. The Stable Outlooks on the notes reflect the comfortable default rate cushion at their respective ratings. Junior Notes Sensitive to Deterioration: The portfolio's par erosion worsened to 3.4% from 2.1% at October 2024 and the level of assets with a Fitch-derived rating of 'CCC+' and below is 3.5%, well below the 7.5% limit. The portfolio had no reported defaults as of the 20 August 2025 trustee report. Transaction Outside Reinvestment Period: The transaction exited its reinvestment period in June 2024, and the most senior notes are deleveraging. The transaction is failing the Weighted Average Life Test, constraining reinvestment. Its analysis is based on a Fitch-stressed portfolio due to the manager's inability to reinvest and the short weighted average life (WAL). Assets with Negative Outlook are notched down by one level, with a 'CCC-' floor when testing for downgrades. Fitch also applies a floor to the portfolio's WAL at four years when testing for upgrades. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the transaction's underlying obligors at 'B'/'B-'. The weighted-average rating factor, as calculated by Fitch, is 25.7. High Recovery Expectations: The portfolio comprises 98.6% of senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The weighted average recovery rate, as calculated by Fitch, is 64.3%. Diversified Portfolio: The portfolio is well diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 22.4%, and the largest obligor represents 2.7% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 32.1%, as calculated by the trustee. Cash Flow Analysis: Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par-value and interest-coverage tests. Deviation from MIR: The model-implied ratings for classes C-1, C-2 and E notes are two notches above their ratings and one notch for class D and F notes, respectively. The deviation takes into consideration the possibility that the WAL test is cured through selling trades and the transaction resume reinvesting new proceeds from default and credit impaired obligations as well as part of the cash already sitting in the issuer accounts. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may occur on stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally 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 Adagio VII CLO 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. ARES EUROPEAN X: Fitch Affirms 'BB-sf' Rating on Class F Notes -------------------------------------------------------------- Fitch Ratings has affirmed the rating of all notes for Ares European CLO X DAC with a Stable Outlook. Entity/Debt Rating Prior ----------- ------ ----- Ares European CLO X DAC A-R XS2347648706 LT AAAsf Affirmed AAAsf B-1-R XS2347649340 LT AAAsf Affirmed AAAsf B-2-R XS2347650199 LT AAAsf Affirmed AAAsf C-R XS2347650785 LT AAsf Affirmed AAsf D-R XS2347651247 LT A-sf Affirmed A-sf E XS1859496645 LT BB+sf Affirmed BB+sf F XS1859495670 LT BB-sf Affirmed BB-sf Transaction Summary Ares European CLO X DAC is a cash flow CLO mostly comprising senior secured obligations. The portfolio is actively managed by Ares European Loan Management LLP and exited its reinvestment period in April 2023. KEY RATING DRIVERS Performance Broadly Stable: The portfolio's credit quality has improved over the last 12 months. Exposure to assets with a Fitch-derived rating of 'CCC+' and below decreased to 4.4% according to the latest monthly report dated August 2025, from 9.9% at the previous review in October 2024 as the manager sold troubled assets. The transaction has incurred some par losses, and according to latest monthly report, the portfolio was at around 1.04% below par compared to 0.23% above par at the previous review. Defaults comprise about 1.0% of the portfolio's outstanding principal balance. The transaction has reinvested between November 2024 to July 2025, but class A-R has amortised further by about EUR80 million and therefore credit enhancement increased across the capital structure. However, the senior classes are already rated 'AAAsf', the highest level possible. The breakeven default rate cushion has increased since the previous review for all rated notes but is not yet sufficient to enable other notes to achieve a higher rating. Manageable Refinancing Risks: The transaction has manageable exposure to near- and medium-term refinancing risk, with 5.6% portfolio assets maturing in 2026 and 9.9% maturing in 2027. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The weighted average rating factor of the current portfolio is 27.0, as calculated by Fitch under its latest criteria. High Recovery Expectations: Senior secured obligations comprise 99.9% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio is 61.9% based on the current criteria. Diversified Portfolio: The portfolio is well diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 16.5%, and no obligor represents more than 2.3% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 25.8% as calculated by the trustee. Fixed-rate assets as reported by the trustee are at 5.7%, complying with the limit of 7.5%. Transaction Outside Reinvestment Period: The transaction has been outside its reinvestment period since April 2023. The manager can therefore continue to reinvest unscheduled principal proceeds and sale proceeds from credit-impaired obligations and credit-improved obligations, subject to compliance with the reinvestment criteria. The transaction has resumed reinvestment due to the curing of the 'CCC' tests determined by Fitch and another rating agency since late November 2024. The other agency's 'CCC' test started to breach again in August 2025, but the failure is small and is curable. Therefore for upgrades Fitch's analysis is based on a portfolio where the transaction covenants have been stressed to their limits. The agency tests the rating through all the matrices. The weighted average recovery rate (WARR) is haircut by 1.5% across all matrices as the recovery rate definition is not in line with Fitch's current criteria, and this could lead to an inflated WARR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades may occur if build-up of credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed, due to unexpectedly high levels of defaults and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may occur if the portfolio quality remains stable and the notes continue amortising, leading to higher credit enhancement across the structure. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally 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 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. AURIUM CLO VII: Fitch Assigns 'B-sf' Final Rating on Cl. F-R Notes ------------------------------------------------------------------ Fitch Ratings has assigned Aurium CLO VII DAC final ratings. Entity/Debt Rating ----------- ------ Aurium CLO VII DAC A-R XS3147435393 LT AAAsf New Rating B-R XS3147435559 LT AAsf New Rating C-R XS3147435716 LT Asf New Rating D-R XS3147435807 LT BBB-sf New Rating E-R XS3147436284 LT BB-sf New Rating F-R XS3147436367 LT B-sf New Rating Subordinated Notes XS3147436441 LT NRsf New Rating Transaction Summary Aurium CLO VII DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine and second-lien loans and high-yield bonds. Note proceeds were used to redeem the existing notes except the subordinated notes, and to fund the portfolio with a target par of EUR450 million. The portfolio is actively managed by Spire Management Limited. The collateralised loan obligation (CLO) has a reinvestment period of 4.6 years and an 8.5-year weighted average life test (WAL) at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'. The Fitch-weighted average rating factor (WARF) of the identified portfolio is 24.1. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. The recovery prospects for these assets are more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate of the identified portfolio is 61.1%. Diversified Asset Portfolio (Positive): The transaction has a concentration limit for the 10 largest obligors at 20%. The deal also includes other concentration limits, including a maximum exposure of 40% to the three largest Fitch-defined industries in the portfolio. These covenants ensure the portfolio will not be excessively concentrated. Portfolio Management (Neutral): The transaction includes two sets of matrices: one effective at closing and another effective 12 months after closing. Each set incorporates fixed-rate limits of 5% and 12.5%. All four matrices are based on a top 10 obligor concentration limit of 20%. The closing matrices correspond to an 8.5-year WAL test, while the forward matrices correspond to a 7.5-year WAL test. The deal has a reinvestment period of about 4.6 years and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio, with the aim of testing the robustness of the deal structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged after the reinvestment period. These include passing the coverage tests and Fitch 'CCC' limit after the reinvestment period, and a WAL covenant that progressively steps down, before and after the end of the reinvestment period. These conditions would reduce the effective risk horizon of the portfolio during periods of stress. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade An increase of the default rate (RDR) by 25% of the mean RDR and a decrease of the recovery rate (RRR) by 25% at all rating levels in the current portfolio would have no impact on the class A-R to B-R notes, but would lead to downgrades of up to one notch for the class C-R to E-R notes and to below 'B-sf' for the class F-R notes. Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. The class B-R to F-R notes have a rating cushion of two notches due to the better metrics and shorter life of the current portfolio than the Fitch-stressed portfolio. Should the cushion between the current portfolio and the Fitch-stressed portfolio be eroded, either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of four notches for the class B-R and C-R debt, three notches for the class A-R and class D-R notes, and to below 'B-sf' for the class E-R and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A reduction of the RDR by 25% of the mean RDR and an increase in the RRR by 25% at all rating levels in the Fitch-stressed portfolio would result in upgrades of up to two notches for all notes, except for the 'AAAsf' rated notes, which are at the highest level on Fitch's scale and cannot be upgraded. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than-expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/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 Aurium CLO VII DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. AVOCA CLO XXIX: S&P Assigns B-(sf) Rating on Class F-R Notes ------------------------------------------------------------ S&P Global Ratings assigned its ratings to Avoca CLO XXIX DAC's class A-R loan and class X, A-R, B-R, C-R, D-R, E-R, and F-R notes. At closing, the issuer also issued unrated subordinated notes. This transaction is a reset of the already existing transaction. At closing, the existing classes of notes were fully redeemed with the proceeds from the issuance of the replacement notes on the reset date. The ratings assigned to Avoca CLO XXIX's reset notes reflect our assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes and loan through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,837.22 Default rate dispersion 495.54 Weighted-average life (years) 4.30 Weighted-average life (years) extended to cover the length of the reinvestment period 4.50 Obligor diversity measure 174.64 Industry diversity measure 20.67 Regional diversity measure 1.24 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.80 'AAA' weighted-average recovery (%) 36.84 Actual weighted-average spread (%) 3.70 Actual weighted-average coupon (%) 4.51 Rationale Under the transaction documents, the rated notes and loan will pay quarterly interest unless a frequency switch event occurs. Following this, the notes and loan will switch to semiannual payments. The portfolio's reinvestment period will end 4.5 years after closing. S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. The portfolio to be well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we have conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we modeled a target par of EUR400 million. Additionally, we also modelled the actual weighted-average spread (3.70%), the actual weighted-average coupon (4.51%), and the actual weighted-average recovery rates calculated in line with our CLO criteria for all classes of notes and loan. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Until the end of the reinvestment period on March 16, 2030, the collateral manager may substitute assets in the portfolio as long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes and loan. This test looks at the total amount of losses that the transaction can sustain--as established by the initial cash flows for each rating--and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings/. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our counterparty criteria. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "The CLO is managed by KKR Credit Advisors (Ireland) Unlimited Co., and the maximum potential rating on the liabilities is 'AAA' under our operational risk criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe the ratings are commensurate with the available credit enhancement for the class A-R loan, and class X to F-R notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R to E-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from closing--during which the transaction's credit risk profile could deteriorate--we have capped our ratings on the notes. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes. "Given our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for all the rated classes of notes and loan. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A-R to E-R notes based on four hypothetical scenarios." Environmental, social, and governance S&P said, "We regard the transaction's exposure to environmental, social, and governance (ESG) credit factors as broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental and social credit factors is viewed as below average, while governance credit factors are average. For this transaction, the documents prohibit or limit certain assets from being related to certain activities. Accordingly, since the exclusion of assets from these activities does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Avoca CLO XXIX DAC is a European cash flow CLO securitization of a revolving pool, comprising mainly euro-denominated leveraged loans and bonds. The transaction is a broadly syndicated CLO that is managed by KKR Credit Advisors (Ireland) Unlimited Co. Ratings Amount Credit Class Rating* (mil. EUR) Interest rate§ enhancement (%) X AAA (sf) 1.50 Three/six-month EURIBOR N/A plus 0.83% A-R AAA (sf) 195.50 Three/six-month EURIBOR 38.00 plus 1.28% A-R loan AAA (sf) 52.50 Three/six-month EURIBOR 38.00 plus 1.28% B-R AA (sf) 42.00 Three/six-month EURIBOR 27.50 plus 1.85% C-R A (sf) 25.00 Three/six-month EURIBOR 21.250 plus 2.15% D-R BBB- (sf) 29.00 Three/six-month EURIBOR 14.00 plus 2.90% 14.00 E-R BB- (sf) 18.00 Three/six-month EURIBOR 9.50 plus 5.30% F-R B- (sf) 12.00 Three/six-month EURIBOR 6.50 plus 8.25% Sub notes NR 30.85 N/A N/A *The ratings assigned to the class A-R loan and X, A-R, and B-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. AVOCA CLO XXXIII: S&P Assigns B-(sf) Rating on Class F Notes ------------------------------------------------------------ S&P Global Ratings assigned its ratings to Avoca CLO XXXIII DAC's class A-1, A-2, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated and Z notes. The ratings assigned to Avoca CLO XXXIII's notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,797.26 Default rate dispersion 454.89 Weighted-average life (years) 4.77 Obligor diversity measure 187.31 Industry diversity measure 22.19 Regional diversity measure 1.21 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.75 'AAA' weighted-average recovery (%) 36.85 Target weighted-average spread (%) 3.63 Covenanted weighted-average coupon (%) 3.50 Rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.58 years after closing. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we modeled a target par of EUR400 million. Additionally, we also modelled the target weighted-average spread (3.63%), the covenanted weighted-average coupon (3.50%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all classes of notes. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Until the end of the reinvestment period on April 15, 2030, the collateral manager may substitute assets in the portfolio as long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes. This test looks at the total amount of losses that the transaction can sustain--as established by the initial cash flows for each rating--and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our counterparty criteria. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "The CLO is managed by KKR Credit Advisors (Ireland) Unlimited Co., and the maximum potential rating on the liabilities is 'AAA' under our operational risk criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe the ratings are commensurate with the available credit enhancement for the class A-1 to F notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from closing--during which the transaction's credit risk profile could deteriorate--we have capped our ratings on the notes. "Given our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for all the rated classes of notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A-1 to E notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P said, "We regard the transaction's exposure to environmental, social, and governance (ESG) credit factors as broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental and social credit factors is viewed as below average, while governance credit factors are average. For this transaction, the documents prohibit or limit certain assets from being related to certain activities. Accordingly, since the exclusion of assets from these activities does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Avoca CLO XXXIII DAC is a European cash flow CLO securitization of a revolving pool, comprising mainly euro-denominated leveraged loans and bonds. The transaction is a broadly syndicated CLO that is managed by KKR Credit Advisors (Ireland) Unlimited Co. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A-1 AAA (sf) 244.00 39.00 Three/six-month EURIBOR plus 1.32% A-2 AAA (sf) 8.00 37.00 Three/six-month EURIBOR plus 1.65% B AA (sf) 38.00 27.50 Three/six-month EURIBOR plus 1.90% C A (sf) 26.00 21.00 Three/six-month EURIBOR plus 2.20% D BBB- (sf) 28.00 14.00 Three/six-month EURIBOR plus 2.85% E BB- (sf) 18.00 9.50 Three/six-month EURIBOR plus 5.35% F B- (sf) 12.00 6.50 Three/six-month EURIBOR plus 8.34% Z NR 00.10 N/A N/A Sub notes NR 30.50 N/A N/A *The ratings assigned to the class A-1, A-2, and B notes address timely interest and ultimate principal payments. The ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. BBAM EUROPEAN IV: S&P Assigns B-(sf) Rating on Class F-R Notes -------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to BBAM European CLO IV DAC's class A-R, B-R, C-R, D-R, E-R, and F-R notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction and issued an additional EUR4.24 million of subordinated notes. This transaction is a reset of the already existing transaction that closed in March 2024. The issuance proceeds of the refinancing notes were used to redeem the refinanced notes (the original transaction's class X, A, B-1, B-2, C, D, E and F notes), for which S&P withdrew its ratings at the same time), and pay fees and expenses incurred in connection with the reset. The ratings assigned to BBAM European CLO IV DAC's reset notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P weighted-average rating factor 2,727.62 Default rate dispersion 524.83 Weighted-average life (years) 4.98 Obligor diversity measure 157.04 Industry diversity measure 22.87 Regional diversity measure 1.22 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.45 Target 'AAA' weighted-average recovery (%) 36.26 Target weighted-average spread (net of floors; %) 3.73 Target weighted-average coupon (%) 4.81 Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. Rationale S&P said, "The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we have conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR400 million target par amount, the covenanted weighted-average spread (3.65%), the covenanted weighted-average coupon (4.0%), the target weighted-average recovery rates calculated in line with our CLO criteria with a 1% cushion for the class A-R notes, and the target weighted-average recovery rates for all other classes of notes. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Until the end of the reinvestment period on April 26, 2030, the collateral manager may substitute assets in the portfolio as long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes. This test looks at the total amount of losses that the transaction can sustain--as established by the initial cash flows for each rating--and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "Under our structured finance sovereign risk criteria, we consider the transaction's exposure to country risk sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our counterparty criteria. The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe the rating assigned to the class A-R notes is commensurate with the available credit enhancement. Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R to E-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from closing--during which the transaction's credit risk profile could deteriorate--we have capped our ratings on the notes. "For the class F-R notes, our credit and cash flow analysis indicate that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes. The ratings uplift for the class F-R notes reflects several key factors, including: -- The class F-R notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated break-even default rate at the 'B-' rating level of 25.55% (for a portfolio with a weighted-average life of 4.98 years), versus if we were to consider a long-term sustainable default rate of 3.2% for 4.98 years, which would result in a target default rate of 15.94%. -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with the assigned 'B- (sf)' rating. "Given our analysis of the credit, cash flow, counterparty, operational, and legal risks, our ratings are commensurate with the available credit enhancement for all the rated classes of debt. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A-R to E-R notes based on four hypothetical scenarios "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities."(se BBAM European CLO VI is a European cash flow CLO securitization of a revolving pool, comprising mainly euro-denominated leveraged loans and bonds. It is managed by RBC Global Asset Management (UK) Ltd. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A-R AAA (sf) 248.00 38.00 3M EURIBOR plus 1.33% B-R AA (sf) 44.00 27.00 3M EURIBOR plus 1.90% C-R A (sf) 24.00 21.00 3M EURIBOR plus 2.20% D-R BBB- (sf) 29.00 13.75 3M EURIBOR plus 3.20% E-R BB- (sf) 18.00 9.25 3M EURIBOR plus 5.25% F-R B- (sf) 11.00 6.50 3M EURIBOR plus 8.18% Sub. NR 35.34 N/A N/A *The ratings assigned to the class A-R and B-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. 3M--three month. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. CVC CORDATUS XXXVI: Fitch Assigns 'B-sf' Rating on Class F Notes ---------------------------------------------------------------- Fitch Ratings has assigned CVC Cordatus Loan Fund XXXVI DAC notes final ratings. Entity/Debt Rating Prior ----------- ------ ----- CVC Cordatus Loan Fund XXXVI DAC A XS3123484894 LT AAAsf New Rating AAA(EXP)sf B XS3123485271 LT AAsf New Rating AA(EXP)sf C XS3123485438 LT Asf New Rating A(EXP)sf D XS3123485602 LT BBB-sf New Rating BBB-(EXP)sf E XS3123485941 LT BB-sf New Rating BB-(EXP)sf F XS3123486246 LT B-sf New Rating B-(EXP)sf Subordinated XS3123486758 LT NRsf New Rating NR(EXP)sf Transaction Summary CVC Cordatus Loan Fund XXXVI DAC is a securitisation of mainly (at least 90%) senior secured obligations with a component of senior unsecured, mezzanine, second lien loans and high-yield bonds. Note proceeds have been used to fund the identified portfolio with a target par of EUR400 million, to close the warehouse arrangements and to pay issuance expenses. The portfolio is actively managed by CVC Credit Partners Investment Management Limited. The CLO has an about 4.6-year reinvestment period and a 7.5-year weighted average life (WAL) test at closing KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-weighted average rating factor of the identified portfolio is 24.2. High Recovery Expectations (Positive): At least 96% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate of the identified portfolio is 59.9%. Diversified Portfolio (Positive): The transaction includes one matrix set at closing and one forward matrix set that is effective six or 18 months after closing, depending on the WAL step-up, provided the aggregate collateral balance (defaults at Fitch-calculated collateral value) is at least at the reinvestment target par balance, among other conditions. Each matrix set comprises two matrices with fixed-rate asset limits of 5% and 12.5%. The transaction includes various portfolio concentration limits, including a top 10 obligor concentration limit of 20% and a maximum exposure to the three largest Fitch-defined industries of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The 4.6-year reinvestment period includes criteria common to other European CLOs. Fitch's analysis is based on a stress portfolio aimed at testing the robustness of the transaction structure against its covenants and portfolio guidelines. WAL Step-Up Feature (Neutral): The transaction can extend the WAL test by one year at the step-up date one year from closing if the aggregate collateral balance (defaulted obligations at collateral value) is at least at the reinvestment target par balance and if the transaction is passing the collateral quality tests. Cash Flow Modelling (Positive): The WAL for the Fitch stress portfolio is 12 months shorter than the WAL covenant. This is to account for strict reinvestment conditions envisaged by the transaction after its reinvestment period, which include coverage test satisfaction and the Fitch 'CCC' bucket limitation test after reinvestment and a WAL covenant that gradually steps down during and after the reinvestment period. Fitch believes these conditions 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 (DR) across all ratings and a 25% decrease of the recovery rate (RR) of the identified portfolio across all ratings would not impact the class A notes, and would lead to downgrades of two notches for the class B and C notes, one notch for the class D and E notes and to below 'B-sf' for the class F notes. Downgrades are based on the identified portfolio. They 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 rated notes each display a rating cushion of up to two 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 DR and a 25% decrease of the RR of the Fitch-stressed portfolio across all ratings would lead to a downgrade of up to four notches for the class A to E notes and to below 'B-sf' for the class F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean DR across all ratings and a 25% increase in the RR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches for the class B to F notes Upgrades are based on the Fitch-stressed portfolio. During the reinvestment period, they 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 CVC Cordatus Loan Fund XXXVI DAC 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 CVC Cordatus Loan Fund XXXVI 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. INVESCO EURO XVI: S&P Assigns B-(sf) Rating on Class F Notes ------------------------------------------------------------ S&P Global Ratings assigned its credit ratings to Invesco Euro CLO XVI DAC's class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated notes. The reinvestment period will be approximately 5.08 years, while the noncall period will be two years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payment. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,791.72 Default rate dispersion 481.58 Weighted-average life (years) 4.19 Weighted-average life (years) extended to cover the length of the reinvestment period 5.08 Obligor diversity measure 117.00 Industry diversity measure 24.62 Regional diversity measure 1.21 Transaction key metrics Total par amount (mil. EUR) 450.00 Defaulted assets (mil. EUR) 0.00 Number of performing obligors 136 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Target 'AAA' weighted-average recovery (%) 36.93 Actual weighted-average spread (net of floors; %) 3.91 Actual weighted-average coupon (%) 3.25 S&P's ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. S&P said, "The portfolio is well-diversified on the closing date, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we modeled the target weighted-average spread of 3.91%, the target weighted-average coupon of 3.25%, and the target weighted-average recovery rates at all rating levels calculated in line with our CLO criteria for all classes of notes. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "At closing, the transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes." The class A and F notes can withstand stresses commensurate with the assigned ratings. S&P said, "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for the class A, B, C, D, E, and F notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A to E notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. "Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. "For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Invesco Euro CLO XVI DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. Invesco CLO Equity Fund 6 LLC manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 279.00 38.00 Three/six-month EURIBOR plus 1.36% B AA (sf) 48.40 27.24 Three/six-month EURIBOR plus 2.10% C A (sf) 25.90 21.49 Three/six-month EURIBOR plus 2.60% D BBB- (sf) 33.70 14.00 Three/six-month EURIBOR plus 3.60% E BB- (sf) 19.10 9.76 Three/six-month EURIBOR plus 6.50% F B- (sf) 14.60 6.51 Three/six-month EURIBOR plus 8.74% Sub notes NR 33.90 N/A N/A *The ratings assigned to the class A and B notes address timely interest and ultimate principal payments. The ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. LEGATO EURO I: Fitch Assigns 'B-sf' Final Rating on Class F Notes ----------------------------------------------------------------- Fitch Ratings has assigned Legato Euro CLO I DAC notes final ratings. Entity/Debt Rating Prior ----------- ------ ----- Legato Euro CLO I DAC Class A XS3133199623 LT AAAsf New Rating AAA(EXP)sf Class B XS3132972509 LT AAsf New Rating AA(EXP)sf Class C XS3132972764 LT Asf New Rating A(EXP)sf Class D XS3132980353 LT BBB-sf New Rating BBB-(EXP)sf Class E XS3132985311 LT BB-sf New Rating BB-(EXP)sf Class F XS3132985584 LT B-sf New Rating B-(EXP)sf Subordinated Notes XS3133113335 LT NRsf New Rating NR(EXP)sf Transaction Summary Legato Euro CLO I 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 have been used to fund a portfolio with a target par of EUR510 million that will be actively managed by LGT Capital Partners (U.K.) Limited. The CLO will have a five-year reinvestment period and an eight-year weighted average life (WAL) test at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch places 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 comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the identified portfolio is 61.2%. Diversified Portfolio (Positive): The transaction includes various concentration limits, including a top 10 obligor concentration limit of 20% and a maximum exposure to the three largest Fitch-defined industries of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction includes three Fitch test matrix sets, each comprising two matrices that correspond to two fixed-rate asset limits of 5% and 10%. All matrices correspond to a top 10 obligor limit at 20%. One set is effective at closing, corresponding to an eight-year WAL test. Another set, which corresponds to a 7.5-year WAL test, is effective six months after closing, or 18 months after closing if the WAL steps up by one year. The third set corresponds to a seven-year WAL test and is effective one year after closing, or 24 months after closing if the WAL steps up by one year. Switching to the forward matrices is subject to the satisfaction of the reinvestment target par condition. The transaction has a five-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 Test Step Up Feature (Neutral): The transaction can extend its WAL by one year on the WAL step up determination date, which is one year after closing. The WAL extension is subject to conditions including the adjusted collateral principal amount being at least equal to the reinvestment target par balance, and each portfolio profile test and collateral quality test being satisfied. Both sets of forward matrices are not applicable on the date falling 12 months post-closing if the WAL step up condition is met on that date. Cash Flow Analysis (Neutral): The WAL used for the transaction's Fitch-stressed portfolio is 12 months shorter than the WAL covenant at issue date. This is to account for strict post-reinvestment period structural and reinvestment conditions, including the satisfaction of coverage tests and the Fitch 'CCC' limitation test. These conditions reduce the effective risk horizon of the portfolio in stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade An increase of the default rate (RDR) by 25% of the mean RDR and a decrease of the recovery rate (RRR) by 25% at all ratings in the identified portfolio would lead to downgrades of one notch for the class C to E notes, two notches for the class B notes, to below 'B-sf' for the class F notes and would not affect the class A notes. Based on the identified portfolio, downgrades may occur if the loss expectation is larger than 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 and C notes have cushions of one notch, and the class D to F notes of two 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 notes, except for the class E and F notes, which would be downgraded to below 'B-sf'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches, except for the 'AAAsf' notes, which are at 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 transaction's remaining life. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread 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 Legato Euro CLO I 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. VOYA EURO IX: Fitch Assigns 'B-(EXP)sf' Rating on Class F Notes --------------------------------------------------------------- Fitch Ratings has assigned Voya Euro CLO IX DAC expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ Voya Euro CLO IX DAC A LT AAA(EXP)sf Expected Rating B-1 LT AA(EXP)sf Expected Rating B-2 LT AA(EXP)sf Expected Rating C LT A(EXP)sf Expected Rating D LT BBB-(EXP)sf Expected Rating E LT BB-(EXP)sf Expected Rating F LT B-(EXP)sf Expected Rating Subordinated Notes LT NR(EXP)sf Expected Rating Transaction Summary Voya Euro CLO IX 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 EUR500 million. The portfolio is actively managed by Voya Alternative Asset Management LLC. The transaction will have an about 4.6-year reinvestment period and an 8.5-year weighted average life (WAL) test covenant. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors in the indicative portfolio to be in the 'B'/'B-' category. The Fitch-weighted average rating factor (WARF) of the indicative portfolio is 24.8. 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 (WARR) of the identified portfolio is 62.0%. Diversified Portfolio (Positive): The transaction will include four Fitch matrices. Two will be effective at closing, corresponding to an 8.5-year WAL and two will be effective one year after closing, corresponding to a 7.5-year WAL. Each matrix set corresponds to two different fixed-rate asset limits at 5% and 10%. Switching to the forward matrices is subject to the reinvestment target par condition and a rating agency confirmation. The transaction will also include various concentration limits, including a top 10 obligor concentration limit at 20% and a maximum exposure to the three largest Fitch-defined industries in the portfolio at 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Positive): The transaction will have a 4.6-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Neutral): The WAL used for the transaction's Fitch-stressed portfolio and matrix analysis is 12 months less than the WAL test covenant at the issue date. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing the coverage tests and Fitch WARF and Fitch 'CCC' tests, and having a linearly decreasing WAL test covenant. These conditions, in the agency's opinion, reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A notes and would lead to downgrades of one notch each for the class D and E notes, of two notches for the class B and C notes, and to below 'B-sf' for the class F notes. Downgrades, which are based on the identified portfolio, may occur if the loss expectation is larger than assumed, due to unexpectedly high levels of default and portfolio deterioration. The class C notes have a one-notch rating cushion, and the class B, D, E and F notes each have a two-notch rating cushion due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. 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 each for the class A to 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 three notches for the rated notes, except for the 'AAAsf' rated notes. During the reinvestment period, upgrades, which are based on the Fitch-stressed portfolio, may result from better-than-expected portfolio credit quality and a shorter remaining WAL test, which means the notes are able to withstand larger-than-expected losses for the remaining life of the transaction. After the end of the reinvestment period, upgrades may arise 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 Voya Euro CLO IX 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 ========= SAMMONTANA ITALIA: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Sammontana Italia S.p.A.'s (SI) Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. It has placed the 'BB-' senior secured rating on SI's EUR800 million seven-year senior secured floating rate notes (SSN) with a Recovery Rating of 'RR3' on Rating Watch Negative (RWN). The RWN reflects its expectation that recovery will reduce to a percentage consistent with 'RR4' upon completion of the EUR125 million tap issue and revolving credit facility (RCF) increase, leading to a one-notch downgrade. The IDR reflects a strong business profile and moderate execution risks in achieving top line and cost synergies, and scope for sustained positive free cash flow (FCF) from 2026. However, the debt funding of the La Rocca acquisition marks a move towards a more aggressive financial policy and delays to 2026 the reduction of leverage below 5.5x, the maximum level consistent with the rating. Key Rating Drivers Italian Frozen Foods Leader: SI is the result of the end-2024 merger of two market leaders in Italy, with strong routes to market in complimentary food categories using cold storage and distribution chains. SI has leading market shares and channel diversification, although geographic concentration constrains the rating. It leads in non-bread frozen bakery products and is strong in a broad range of sweet frozen categories distributed mainly to bars, hotels and restaurants but also in supermarkets and hypermarkets. Conservative Financial Policy Tested: SI's strategy aims for organic growth and acquisitions of small sector peers and some distributors in Italy, the US and Europe. Its projections assume bolt-on M&A of EUR25 million-EUR40 million funded from annual FCF over 2026-2028. The 'B+' rating assumed that resources for M&A would come exclusively from divestment proceeds and FCF, enabling leverage to stay under 5.5x from 2025. However, the acquisition of Canadian company La Rocca for EUR95 million and restructuring charges will be funded with new debt of EUR125 million and not only with internally generated resources and the EUR45 million disposal proceeds from Lizzi, delaying deleveraging from a high 6.0x in 2024 to below 5.5x by one year to 2026, a change from the initially stated financial policy. Progress on Delivering Synergies: The company is leveraging the complimentary product portfolios and routes to market of the two merged entities to deliver cost synergies. Fitch views these plans, together with expectations of benefits from cross-selling as ambitious, but the company made good progress during 1H25, having achieved EUR6.5 million of its EUR27 million target by end-2026. Fitch assesses execution risks as moderate and expect to improve its assessment once planned cost synergies are closer to completion. Favourable Trends, Saturation Risks: Fitch believes SI will continue to benefit from the need to contain labour costs in the hotel/restaurant/catering industry, which will support continued adoption of frozen bakery products despite an already high rate of penetration. Their use significantly reduces manual and person-controlled work in bakery product production. Small bars are widespread in Italy, providing a range of food and drinks for most meal occasions across the day and are SI's main client base. Profitable Packaged Food Company: The company reported combined Fitch-adjusted EBITDA of EUR147 million in 2024, representing a margin of 16%, which was maintained in 1H25 thanks to price increases to pass on input cost inflation. This profitability is consistent with the mid to high end of European packaged food companies. Fitch assumes the continuation of a healthy pace of profit growth, with margin uplift towards 18% by 2028 thanks to acquisitions, synergies and the roll-out of new products and new market entries. Good Cash Flow Generation: The 'B+' IDR is supported by its estimated initially modest, but gradually expanding, sustained positive FCF. Fitch projects more subdued FCF in 2025, but believe it should grow to EUR50 million in 2026 and EUR70 million-EUR80 million in 2027-2028. This will be driven by SI's strong EBITDA margin along with reducing post-merger execution risks and despite high planned capex disbursements of EUR50 million-EUR55 million a year. Opportunities to Expand Abroad: The merged company intends to leverage on favourable demand trends to expand in the US, France and German-speaking European countries. Fitch believes these plans, which envisage bringing sales outside Italy to 25% by 2028, have good prospects for success, thanks to the potential demand for Italian gelato and Italian products in general. The company is mitigating challenges linked to tariffs in the US with local sourcing and pricing power linked to its premium level. Peer Analysis Sigma Holdco BV (B/Stable), Picard BondCo S.A. (B/Stable), IRCA Group Luxembourg Midco 3 S.a.r.l. (B/Stable ) are all rated one notch lower than SI. Their business profiles are broadly comparable to SI's. Sigma is the largest and most geographically diversified, with higher margins supported by strong brands despite a single-category focus, while Picard is more domestically focused. However, these benefits are tempered by higher leverage. Nomad Foods Limited's (BB/Stable) two-notch differential with SI reflects the former's strength in branded and private-label frozen food, and more diverse portfolio of categories and geographies of operation, and larger overall scale, leading to a stronger business profile. Combined with Nomad's higher cash generation, this justifies larger debt capacity. Nomad's rating also reflects its lower gross leverage of around 4.5x. Platform Bidco Limited (Valeo Foods) and Biscuit Holding SAS are both rated 'B-'/Stable, two notches lower than SI, because their credit profiles are weaker and constrained by much higher leverage above 7x despite comparable business profiles, and Platform's larger scale. Key Assumptions - Organic revenue growth of 4% and 5% in 2025-2026 before normalising to around 3.5% annually over 2027-2028 - EBITDA margin at around 15.3% in 2025, growing toward 17.6% by end-2028 - Annual capex of around EUR65 million in 2025, before normalising at around EUR50 million thereafter - FCF margins in the low single digits in 2025 before stepping up to mid single digits from 2026 - Total aggregate bolt-on spending of EUR150 million over 2025-2028 largely covered with internally generated cash flow Recovery Analysis Its recovery analysis assumes SI would be considered a going concern (GC) in bankruptcy, and that it would be reorganised rather than liquidated. This is because most of its value lies within its established brand portfolio, and client relationships and production and logistic capabilities. Fitch assumes a 10% administrative claim. Fitch assesses GC EBITDA at EUR125 million, which is after excluding the Lizzi assets earmarked for divestment and represents a hypothetical distressed EBITDA, at which level the group would have to undergo a debt restructuring due to an unsustainable capital structure. The GC EBITDA assumes corrective measures and the restructuring of the capital structure for the company to be able to remain a GC. Financial distress leading to debt restructuring may be driven by SI losing part of its key retailer base, disruption in the Italian operations or having issues with the post-merger integration. Fitch applies a recovery multiple of 5.5x, at about the mid-point of its multiple distribution in EMEA and in line with sector peers. Its estimates of creditor claims for the existing capital structure include a fully drawn EUR140 million super senior revolving credit facility which rank ahead of the EUR800 million SSN. Fitch estimates that recoveries for the SSN, once increased to EUR925 million following the EUR125million tap issuance and at the same time the super senior RCF increases to EUR170 million, would result in a ranked recovery in the 'RR4' band versus 'RR3' for the existing senior secured debt given the slightly lower amount of the committed RCF and secured debt class. Therefore, on completion Fitch expects to downgrade the notes' 'rating to 'B+' with a Recovery Rating of 'RR4', in line with the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA margin below 15% and neutral to positive FCF generation - EBITDA gross leverage remaining above 5.5x, due to slower pace of delivery of organic growth strategy or debt-funded acquisitions - Reducing liquidity headroom due to higher working capital seasonality and M&A disbursements than anticipated Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: Fitch does not envisage an upgrade to the 'BB' rating category. Any positive rating action will be subject to: - Achievement of wider scale and diversification, measured as EBITDA reaching EUR300 million and contribution of non-Italian markets to EBITDA growing to at least one quarter - EBITDA gross leverage dropping below 4.5x, thanks to organic growth, integration of bolt-on targets or gross debt prepayment, and EBITDA interest coverage above 3.5x - Evidence of EBITDA margin expanding sustainably to 18% or above, sustaining FCF at mid-single digit Liquidity and Debt Structure Fitch forecasts SI's available cash balance at around EUR47 million at end-2025 after completion of the EUR125 million SSN tap issuance and considering Fitch restricts EUR50 million of cash for daily operational purposes, including intra-year business seasonality. This liquidity is complemented by the almost full availability of the announced increase of the committed RCF to EUR170 million with no significant debt maturing before 2031. Issuer Profile SI resulted from the merger of Sammontana with Forno d'Asolo. It manufactures and distributes ice creams, and frozen sweet and savoury pastries and patisserie. 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 ----------- ------ -------- ----- Sammontana Italia S.p.A. LT IDR B+ Affirmed B+ senior secured LT BB- Rating Watch On RR3 BB- =================== K A Z A K H S T A N =================== KAZAKHSTAN UTILITY: Fitch Alters Outlook on 'BB-' IDR to Negative ----------------------------------------------------------------- Fitch Ratings has revised Limited Liability Partnership Kazakhstan Utility Systems' (KUS) Outlook to Negative, from Stable. Fitch has also affirmed the Long-Term Issuer Default Rating (IDR) at 'BB-'. The Negative Outlook reflects its expectations that leverage and interest coverage headroom will be fully exhausted in 2027-2028, driven by high capex. The Negative Outlook also reflects higher FX risks amid increased funding in hard currencies, and resumption of credit-negative, related-party transactions, although of limited size. The rating trend will mainly depend on KUS' ability to implement capacity expansion projects on time, limit cash leakage to related parties and secure adequate liquidity on a timely basis. The company's rating continues to reflect a solid position in Kazakhstan's electricity market, healthy tariff growth in electricity generation, long-term tariffs in distribution and the evolving regulatory framework with social and political pressure on tariffs. Key Rating Drivers Expected High Investments: KUS has started the implementation of two expansionary projects on its coal-fired power plants, with capacity addition of 240 megawatts and budgeted investments of up to KZT320 billion over 2024-2028. Investment agreements lock in approved capacity tariffs for 10 years once projects are completed, at KZT10 million-11 million per megawatt per month, which provides an attractive return on investments. The company expects capacity payments to start in 2029, once the projects are complete, around a year later than originally planned. The capex plan is partially funded, and timely funding will be important to avoid delays. Capex-Driven Releveraging: Fitch expects KUS's funds from operations (FFO) net leverage to weaken to about 3x in 2027-2028 (1.6x in 2024), leaving no rating headroom. This is driven by Fitch-expected deeply negative free cash flow (FCF) averaging about KZT50 billion a year between 2025 and 2028 on the back of expansion capex projects notwithstanding a rising EBITDA. If the projects are implemented as KUS expects, assuming no further projects, Fitch expects deleveraging from 2029, when the new power units start receiving high contracted capacity payments. Interest Coverage to Weaken: Fitch also forecasts FFO interest coverage to be at or below the negative sensitivity of 3.7x in 2027-2028 (9x in 2024), on the back of higher debt quantum and high interest rates for debt in local currency. The National Bank of Kazakhstan increased the base interest rate twice over the last year, to 16.5% in September 2025, from 14.25% in October 2024. FX Risks: Since its last review, KUS' FX risks have increased greatly, despite the refinancing of a rouble-denominated Sberbank loan at the end of 2024. At end-1H25, about 60% of its debt was denominated in US dollars while revenue is all local currency, following a new loan and new hard currency bond issues in 1H25. Fitch expects the share of USD-denominated debt to rise further once the company signs its next loan agreement. KUS has managed to link capacity tariffs for new projects to FX from 2029, once its projects are completed, however, tariffs on the existing asset base are not indexed to FX, a mismatch that weakens the company's financial flexibility. Weak Corporate Governance: In 2024 and 1H2025, KUS provided around KZT15 billion of related-party loans to people and companies related to the company's owner, where repayments are uncertain. Additionally, KUS used a complex and opaque scheme of refinancing Sberbank loan in 2024, which included creation of two intermediary companies and KUS providing a guarantee for the related party's debt (around USD12 million at end-1H25), which Fitch includes in leverage calculation. KUS has a record of receiving the auditor's qualified opinions, mainly related to insufficient disclosure and incorrect accounting of related-party transactions. Healthy Growth in Generation Tariffs: Electricity generation tariffs were increased by 25% in February 2025 for KUS's generation companies. These tariffs are revised annually, which limits cash flow visibility. This is partially balanced by healthy tariff growth above inflation over 2021-2025. The regulator is considering improving the allowed profitability rate included in tariffs from the current 11.79%, which would be positive for KUS. Supply Merged with Networks: In July 2024, a law on energy sector regulation was passed, prescribing to transfer regulated electricity supply function to networks, and suspending the licences of non-regulated energy supply companies. As a result, from January 2025, Mangistau Regional Electricity Network Company (MRENC) started electricity sales and purchases. In its view, the reform exposes MRENC to higher volatility of working capital and non-payment risk, partially mitigated by its strong counterparties from oil and gas industry. Capacity Market Adds Revenue Visibility: About 80% of KUS's installed capacity receives capacity payments (on top of generation tariffs), representing 14% of KZT80 billion EBITDA in 2024. These cover the company's fixed costs and have limited volume risk. The capacity tariff was raised, by 10%, to KZT1.2 million per megawatt per month in 2025, after an 80% hike in 2024. Fitch forecasts capacity payments to account for 11%-14% of EBITDA in 2025-2027. Long-Term Distribution Tariffs: Distribution tariffs for KUS's networks have been approved until 2028-2029, with an average increase of 7%-15% a year. As evidenced from the past, networks can apply for higher growth when approved tariff increases do not match expense dynamics. The approval of long-term tariffs improves cash flow visibility in the distribution subsector. Emerging Regulation: Tariffs for generation, distribution and supply are regulated in Kazakhstan. The regulatory framework generally allows for recovery of costs and investments, however, it remains subject to social and political pressure. This results in KUS's cash flows being less stable than peers' in more established markets. Peer Analysis KUS's closest peers are JSC Samruk-Energy (BB+/Stable, Standalone Credit Profile (SCP): b+), a Kazakhstan-based utility holding company, and Kazakhstan Electricity Grid Operating Company (KEGOC, BBB/Stable, SCP: bbb-), a transmission operator. The two have a stronger market position than KUS due to their larger scale of operations and wider geographical presence in Kazakhstan. KEGOC also has better cash flow visibility than KUS. Samruk-Energy and KEGOC have stronger liquidity than KUS, thanks to better access to credit lines and longer maturity profiles, and have higher debt capacity. KUS's financial profile is stronger than Samruk-Energy's, but weaker than KEGOC's. Energo-Pro a.s. (EPas, BB-/Negative) is active in electricity generation, distribution and supply in Bulgaria, Georgia, Turkiye, Spain and Brazil. Similar to KUS, EPas is exposed to cash flow volatility and high FX mismatch. However, EPas benefits from stronger geographic diversification and stronger regulation, so has higher debt capacity, balanced by its higher leverage, resulting in the same rating as KUS. KUS and EPas are rated on a standalone basis. Samruk-Energy is rated two notches below the sovereign under its Government-Related Entities (GRE) criteria. Fitch notches KEGOC up once for strong links with the state under the GRE criteria. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer: - GDP growth of 4%-5.6% and CPI of 8%-12% over 2025-2028 - Electricity generation and distribution volume to increase in low single-digit percentages in 2025-2028; flat heat generation volumes over the same period - Electricity generation tariffs to rise in line with inflation between 2026 and 2028; - Capacity sales tariffs as approved by the regulator for 2025 and remaining flat for 2026-2028 - Electricity distribution tariffs growth as approved by the regulator between 2025 and 2028 - Cost inflation growth at around inflation rate - Capex averaging KZT112 billion a year over 2025-2028, including new projects under investment agreements - No repayment of loans by third parties, about KZT3.5 billion of cash outflow annually to third parties in 2025-2028 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Adverse tariff changes, delays in new projects commissioning or aggressive M&A leading to FFO net leverage higher than 3x and FFO interest coverage below 3.7x, both on a sustained basis - Deterioration of corporate governance (e.g. a big increase in loans and guarantees to external companies) - Worsening liquidity position Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The rating may be affirmed with a Stable Outlook if Fitch have sufficient visibility on execution of the capex plan and its funding, and on FFO net leverage and FFO interest coverage remaining within sensitivities. Liquidity and Debt Structure At end-1H25, KUS had available cash of around KZT13billion and two working capital credit lines from local banks with a cumulative available limit of KZT26 billion. The company also held KZT31 billion of cash restricted for capex. At end-1H25, short-term debt amounted to KZT31 billion. It plans to refinance most short-term loans. Fitch expects deeply negative FCF, averaging KZT62 billion a year over 2025-2027, driven by high capex. For one investment agreement, KUS signed a loan of USD240 million with the Eurasian Development Bank with a grace period until construction is complete and maturity in 2037. The company plans to sign an agreement with similar terms on the second project. Issuer Profile KUS is an integrated utility in Kazakhstan, which owns coal-fired combined heat and power plants in Karaganda and East Kazakhstan regions with installed capacity of 1.1 gigawatt and 5% market share of the country's electricity generation. KUS also owns three electricity distribution companies in Karaganda, Turkestan and Mangistau regions, as well as a number of electricity supply companies. 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 KUS has an ESG Relevance Score of '4' for Group Structure due to non-transparent ownership structure and the presence of credit-negative, related-party and third-party transactions, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. KUS has an ESG Relevance Score of '4' for Financial Transparency due to delayed publication of IFRS accounts compared with international best practice and a record of receiving the auditor's qualified opinions. The level of transparency limits its ability to assess the company's financial condition, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. KUS has an ESG Relevance Score of '4' for Governance Structure due to key person risk from an ultimate owner, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Limited Liability Partnership Kazakhstan Utility Systems LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT BBB+(kaz) Affirmed BBB+(kaz) =================== L U X E M B O U R G =================== INEOS GROUP: Fitch Lowers LongTerm IDR to 'BB-', Outlook Negative ----------------------------------------------------------------- Fitch Ratings has downgraded INEOS Group Holdings S.A.'s (IGH) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'BB'. The Outlook remains Negative. Fitch has affirmed IGH's senior secured ratings at 'BB+' with a Recovery Rating of 'RR2'. The downgrade reflects a further deterioration of IGH's EBITDA net leverage in 2025-2026 to about 8x, due to a weak chemical market and high capex for the completion of Project One (P1). Fitch expects the group to deleverage towards 5x by 2028, supported by the EBITDA contribution of P1 and a mild recovery in chemical margins. The Negative Outlook reflects uncertainty around the recovery trend, due to global chemical oversupply, sluggish economic growth, heightened trade tensions and execution risk related to P1. IGH's rating continues to reflect its position as one of the world's largest petrochemical producers, with strong market positions in Europe and North America, and the robust cost positions of its assets. Key Rating Drivers Leverage Rises on Peak Capex: Fitch expects IGH's EBITDA to fall 20% in 2025, which, alongside high P1 capex, will raise EBITDA net leverage to about 8x. Fitch expects heightened trade tensions to constrain chemical demand in 2025-2026, keeping the market in oversupply. Fitch forecasts EBITDA net leverage to decrease towards 5x by 2028, due mainly to growing EBITDA contribution from P1 from 2027, and a gradual recovery of chemical margins as the industry rationalises capacity, and lower interest rates stimulate demand. However, the pace of recovery is uncertain due to possible capacity additions through 2028. Deleveraging in Focus: Fitch has not included any dividends or M&A for 2025-2029 as IGH focuses on P1 completion and restoring leverage closer to its 3x target. The group is cutting costs further, scaling back capex and shutting down certain assets. In June 2025 it announced its intention to close its phenol plant in Gladbeck by 2027. Digesting Past M&A: IGH has spent about EUR2.7 billion on assets in the US, France, Singapore and China in 2022-2024. The new consolidated assets will contribute to total EBITDA, but Fitch does not include dividends from its joint ventures (JV) with Sinopec due to uncertainty around their performance and leverage. The poor performance of SECCO - one of its JVs - has led IGH to prepay some of its acquisition debt. P1 Supports Cost Position: IGH is building a new ethane cracker plant in Belgium, with an annual capacity of 1.45 million tonnes (mt) a year, which will increase its ethylene backward integration in Europe. The group expects mechanical completion by end-2026 and a run-rate EBITDA contribution above EUR600 million. P1 will receive ethane feedstock from the US, resulting in a cost advantage over most EU naphtha crackers, similar to its existing cracker in Rafnes. P1's lower emissions will provide a further advantage over older assets in Europe with the expected phase-out of carbon free allowances. Scale and Cost Competitiveness: IGH's strengths include its large scale, as one of the largest chemical companies globally, with a chemical production capacity of 29.6mt. Its assets are mainly located in Europe (56%) and North America (40%), where it has a robust cost position. Its US olefin assets are particularly strong, due to their size and access to competitively priced ethane, and have been maintaining utilisation rates above the industry average. In Europe, IGH has a competitive advantage in its ethane cracker in Rafnes. Rated on Standalone Basis: IGH is the largest subsidiary of INEOS Limited, accounting for almost half its EBITDA. However, Fitch rates it on a standalone basis as it operates as a restricted group with no guarantees or cross-default provisions with INEOS Limited or other entities within the wider group. Corporate Governance: IGH's corporate governance limitations are a lack of independent directors, a three-person private shareholding structure, key-person risk at INEOS Limited and limited transparency on IGH's strategy on related-party transactions and dividends. These are incorporated into IGH's ratings and are mitigated by strong systemic governance in the countries in which INEOS Limited operates, its record of adherence to internal financial policies, historically manageable ordinary dividends, related-party transactions at arm's length, and solid financial reporting. No Related-Party Loan Repayment: In 2023, IGH made large loans of EUR1.1 billion to related parties maturing in 2028, but Fitch understands from management that repayment could be postponed. Therefore, Fitch assumes no repayment in 2025-2029. Peer Analysis Braskem S.A. (BB-/Rating Watch Negative) is an integrated producer of olefins and polymers with a strong market position in Americas, but large asset concentration in Brazil. Its scale is comparable to IGH, but its geographical diversification and cost position is weaker. Braskem's EBITDA net leverage rose to 11x in 2024. Synthos S.A. (BB/Negative) is much smaller and less diversified than IGH. This is offset by a more conservative balance sheet. Synthos's EBITDA net leverage is forecast lower than IGH's, at about 3x in 2025-2026. Nova Chemicals Corporation (BB-/Rating Watch Positive) is a North American integrated producer of olefins and polymers. It is smaller and less diversified than IGH but generates much stronger EBITDA margins in the 20% range. Fitch forecasts its EBITDA gross leverage to be lower than IGH's at about 5x in 2025-2026. The Rating Watch Positive reflects its expected acquisition by Borouge Group International. INEOS Quattro Holdings Limited (B+/Stable) has comparable global footprint and diversification to IGH. The rating difference is due to IGH's scale and stronger cost position, due to its ability to use ethane feedstocks at its US and Norway cracker, which provides a sustainable cost advantage in olefins and polymers. IGH and Quattro's leverage are comparable, but Fitch believes IGH has stronger deleveraging prospects once P1 is completed. Key Assumptions - Revenue to grow on average 2% in 2025-2029, after growing 9% in 2024 - Fitch-defined EBITDA (assuming EUR230 million-250 million lease adjustment a year) to fall to EUR1.5 billion in 2025, before rising to EUR1.6 billion in 2026, EUR2 billion in 2027, EUR2.3 billion in 2028 and EUR2.4 billion in 2029 - Capex of EUR2.2 billion in 2025, EUR1.1 billion in 2026 and EUR0.7 billion a year in 2027-2029 - P1 completed in 2026 with EBITDA contribution from 2027 - No dividends in 2025-2029 - No dividends received from SECCO JV and Tianjin JV in 2025-2029 - No acquisitions in 2025-2029 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Persistent weak market conditions constraining EBITDA generation leading to EBITDA net leverage remaining above 5.5x in 2028 - A deterioration in liquidity - Significant deterioration in the business profile, such as cost position, scale, diversification or product leadership, or prolonged market pressure, translating into EBITDA margins well below 10% on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The Negative Outlook makes positive rating action unlikely in the short term, but forecast EBITDA net leverage recovering sooner to below 5.5x versus Fitch's rating case would support a revision of the Outlook to Stable. - EBITDA net leverage at or under 4x through the cycle would be positive for the rating - Corporate-governance improvements, in particular, better transparency on decisions regarding dividends and related-party loans, and independent directors on the board Liquidity and Debt Structure Fitch assesses liquidity as sufficient to cover scheduled debt repayment until 2027, despite highly negative free cash flow in 2025 and 2026 as IGH completes P1. As of 30 June 2025, IGH had about EUR2 billion in cash and equivalents against current borrowings of EUR0.9 billion, mainly comprising the Rain facility (EUR0.6 billion) due in June 2026 and working-capital facilities (EUR0.3 billion). In addition, EUR1.1 billion remained available on the P1 facility to fund a large part of the remaining P1 capex. IGH continues to proactively refinance upcoming maturities. It raised about EUR1.4 billion in 1H25 to prepay the outstanding amounts of 2026 notes and the Gemini loan initially due in 2027. Next material maturities are the Rain facility in 2026 and the EUR375 million term loan due in 2027. In 2028, scheduled debt repayments will rise to above EUR2 billion, including the amortisation of the fully drawn P1 facility. Issuer Profile IGH is an intermediate holding company within INEOS Limited, one of the largest chemical companies in the world, operating in the commoditised petrochemical segment of olefins and polymers. Summary of Financial Adjustments - Interest on lease liabilities of EUR31 million and right-of-use asset depreciation of EUR205 million, reducing EBITDA by EUR235 million. Lease liabilities not included in financial debt - Cash used for collateral against bank guarantees and letters of credit totalling EUR136 million treated as restricted - Debt issue costs of EUR280 million added back to financial debt 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 IGH has an ESG Relevance Score of '4' for Governance Structure, due to ownership concentration and a lack of board independence, in light of opportunistic decision-making despite weak chemical market conditions. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. IGH has an ESG Relevance Score of '4' for Group Structure, due to the complex group structure of the wider INEOS Limited group and of IGH, and related-party transactions. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- INEOS Group Holdings S.A. LT IDR BB- Downgrade BB Ineos US Finance LLC senior secured LT BB+ Affirmed RR2 BB+ Ineos Finance plc senior secured LT BB+ Affirmed RR2 BB+ SPEED MIDCO: S&P Assigns 'B+' Rating, Outlook Stable ---------------------------------------------------- S&P Global Ratings assigned its 'B+' rating to Luxembourg-based visa processing company Speed Midco S.a.r.l. and its financing subsidiary Speed Midco 3 S.a.r.l. In addition, S&P assigned its 'B+' issue rating and '3' recovery rating (rounded estimate: 50%) to the company's proposed senior secured term loan B. The stable outlook reflects S&P's expectation of strong organic growth resulting in deleveraging and strong FOCF generation from fiscal 2026 onward. Speed Midco, the holding company of VFS Global AG, is seeking to refinance existing debt of about $2 billion. The company plans to raise $2 billion equivalent in a new seven-year senior secured term loan B (split into U.S. dollar and euro tranches). The company is also extending its existing EUR305 million senior revolving credit facility maturing in 2032. S&P said, "Pro forma for the transaction, we expect S&P Global Ratings-adjusted debt to EBITDA of about 5.7x in 2025 (compared with 5.5x in 2024), and negative free operating cash flow (FOCF) of about $28 million after including exceptional capital expenditure (capex) and one-off working capital. Thereafter, we expect Speed Midco S.a.r.l and its subsidiaries (VFS) to deleverage toward 5.0x over the next 12-18 months and generate FOCF above $100 million from fiscal 2026 onward as growth capex normalizes. "We expect VFS' leverage to improve toward 5x over the next 12 to 18 months from high levels of 5.7x as of fiscal 2024. Our calculation of adjusted debt in 2025 amounts to approximately $2.5 billion, comprising the proposed $2.0 billion equivalent of senior secured debt, $110 million of drawings under the revolving facility, and roughly $450 million of adjustments relating to other indebtedness, noncancellable leases, and deferred or contingent consideration linked to acquisitions. We anticipate that leverage will begin to improve in 2026, supported by higher EBITDA and the partial repayment of bilateral loans and revolving credit facility borrowing from internal cash flow. "We forecast meaningful improvement in VFS' revenues and adjusted EBITDA during 2025 and 2026, supported by an improved product mix, rising applicant volumes, and favorable structural trends in emerging markets where regulatory and security requirements are intensifying. We project revenues to reach between $1.1 billion and $1.2 billion in 2025, representing year-on-year growth of 13%–15%, and to increase further to between $1.2 billion and $1.3 billion in 2026, and $1.3 billion and $1.4 billion in 2027, equating to 5%-7% annual growth." In the first half of 2025, the company reported a 4% increase in revenues, reflecting growth in its higher-margin value-added services (VAS) and the contribution of CiX, partly offset by weaker application volumes due to temporary restrictions across a few countries. Profitability has also strengthened. The company's EBITDA margin rose to 36.8% in 2024, compared with the prior year (33.6%), driven by the expansion of higher-margin VAS, scale benefits, and cost optimization initiatives carried out during and after the pandemic. S&P expects margins to remain solid at in the range of 36%-37% for 2025 to 2027, underpinned by continued expansion of VAS, the full-year impact of the CiX acquisition, and the operating leverage gained from joint visa application centers, which allow new client governments to be added at minimal incremental cost. Solid FOCF generation from fiscal 2026 onward. Free operating cash flow is likely to be negative in 2025, reflecting significant capex of approximately $140 million-$150 million as the company continues to roll out new application centers for recent new client government wins. In addition, one-off negative working capital and high interest costs under the existing debt structure also affect the FOCF. S&P expects cash flow to recover around $110 million-$120 million in 2026, and $160 million-$170 million in 2027 as capex moderates to $70 million-$80 million. Historically, VFS has exhibited low capex intensity, generally spending less than 5% of revenues. VFS' business profile reflects its global leadership in visa application outsourcing and strong barriers to entry. VFS' market share has expanded in the last few years and enjoys a strong dominant position, while its closest competitors, GDIT and TLS Contact remain far smaller. The company is well placed to capture structural industry tailwinds, including increasing outbound travel from emerging markets, rising passport penetration, and stricter geopolitical and security-related visa requirements. The recovery from the pandemic has been robust, with 2024 revenues and EBITDA surpassing 2019 levels by 22% and 64%, respectively. S&P expects VFS to achieve its pre-pandemic application volumes by end of 2025, a key driver of this performance has been the rapid expansion of higher-margin VAS, contributing an increasing proportion of revenue over time. Revenue visibility is supported by the company's medium-term contract structure, typically spanning between three to five years. The average relationship length is about 10 years and VFS has achieved high customer retention rates and new business wins recently. A U.K. contract win toward the end of fiscal 2023 has boosted its operating performance in the last two years. VFS has consistently retained more than 99% of contracts and achieved tender success rates above 95%, providing a high degree of stability and predictability to its cash flows Looking ahead, S&P expects application volumes to recover to pre-pandemic levels in 2025 and continue growing thereafter, supported by these favorable demand dynamics and the company's entrenched market position. VFS is subject to application volume risk, which is linked to travel activity. Its revenue base is exposed to external shocks, as demonstrated during the pandemic when application volumes dropped sharply. While VFS' business has rebounded since the pandemic, it remains vulnerable to travel restrictions, evolving government policies, and geopolitical instability. Moreover, customer concentration is high, with the top three clients (destination markets) accounting for around 50% of revenues. There is concentration in terms of revenue split as per applicant source market. The applicants are mainly from India (20% of sales), China (10%), Asia-Pacific (15%), Middle East (20%), Africa (10%), North America (10%), Latin America (5%), and others (10%). The company's financial policy supports the 'B+' rating. S&P said, "Our financial risk profile assessment also considers the group's private equity ownership and its tolerance for high leverage. We do not anticipate any further distributions in the short to medium term. If the company's financial policy becomes increasingly aggressive, with debt-funded acquisitions or shareholder returns, we anticipate this would put downward pressure on credit metrics and delay deleveraging." S&P said, "The stable outlook reflects our expectation that VFS will achieve strong organic growth, resulting in deleveraging and positive FOCF generation. We expect debt to EBITDA to improve toward 5x and FOCF of above $100 million from fiscal 2026 onward as growth capex normalizes. "We could lower the rating if we no longer believe that adjusted leverage will remain below around 5.5x-6x and if VFS fails to generate strong positive FOCF from fiscal 2026 onward. This could occur in the event of weaker travel demand or the loss of a significant customer resulting in lower-than-expected visa application volumes. This could also result from a material debt-financed acquisition or any dividend distribution that would derail the deleveraging that we forecast. "We view upside to the ratings as unlikely in the near term. We could, however, consider a higher rating if there is evidence of a more conservative financial policy in addition to deleveraging through EBITDA growth to below 5x. This could occur as a result of debt repayments and a commitment from the financial sponsor to maintain lower leverage." =========== P O L A N D =========== BANK OCHRONY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Bank Ochrony Srodowiska S.A.'s (BOS) Long-Term Issuer Default Rating (IDR) at 'BB-' and Viability Rating (VR) at 'bb-'. The Outlook on the IDR is Stable. Key Rating Drivers Standalone Profile Drives IDRs: BOS's ratings reflect its weaker franchise and less stable business model than its larger peers, higher-than-average risk appetite and weak asset quality. The ratings are underpinned by BOS's moderate capital buffers, improved although still weak profitability, generally stable funding and liquidity position. The Short-Term IDR of 'B' is the only option corresponding to the Long-Term IDR. The National Ratings of 'BBB-(pol)'/'F3(pol)' reflect BOS's lower creditworthiness relative to Polish peers. Narrow Franchise, Volatile Performance: BOS's business profile is constrained by its small market shares in sector loans and deposits, and a weaker and more volatile through-the-cycle performance than peers. BOS has increasingly focused on specialised 'green' lending, which moderately strengthens its niche franchise and is a key pillar of the new medium-term strategy. Historically, the bank's strategy has been opportunistic amid frequent changes of the top management. The execution and strategy record under the new management is short. The bank has less than a 1% market share in lending, dominated by non-retail loans, with about 1% in deposits dominated by retail clients. Above-Average Risk Appetite: BOS's risk profile is higher than the industry average due to the inherent risks in its specialisation in green financing, high single-name loan book concentrations and large exposure to the real estate and construction sectors. The bank remains exposed to legal risks from its foreign-currency mortgage loans. However, the exposure is diminishing and improved profitability, due to higher interest rates, provides a reasonable cushion against residual risks in this portfolio. Market risk is moderate. High Impaired Loans: Fitch expects BOS's impaired-loans ratio (end-June 2025: 15.4%) to gradually improve, as the bank makes progress in cleaning up its legacy loan book and expands lending. Fitch expects high interest rates to continue to weigh moderately on asset quality, but credit losses should be largely contained as the economy rebounds and interest rates fall. BOS's impaired-loans ratio remains the weakest of Fitch-rated Polish banks. Stabilising, but Weak Profitability: Fitch expects BOS's operating profit/risk-weighted assets (RWAs; 2024: 1.2%) ratio to stabilise over the next two years, reflecting recovering loan growth, margin pressures from falling interest rates and easing operating expense pressure as the charges for the bank's Swiss franc loan portfolio decline from 2025. Due to weaker cost efficiency and asset quality, BOS's profitability remains vulnerable to interest and credit cycles despite contained net interest income sensitivity to falling rates. Moderate Capitalisation: BOS's common equity Tier 1 (CET1) ratio of 15.5% at end-June 2025 has declined, despite improved internal capital generation due to RWA inflation driven by the effect of updated capital requirements regulation rather than loan growth. Fitch views the bank's capitalisation as only moderate for its risk profile, given high single-name loan book concentrations, substantial encumbrance of capital by unprovisioned impaired loans, and volatile through-the-cycle performance. Potential increase in corporate income tax rate for banks will put additional pressure on the bank's capitalisation considering its ambitious growth targets. Generally Stable Deposit Funding: BOS's fairly granular deposit base, modest loans-to-deposits ratio and substantial liquidity buffers underpin its funding and liquidity profile. However, BOS's deposit franchise and customer relationships which are weaker than peers - reflected in its hefty reliance on price-sensitive term deposits weigh on its assessment of its funding profile. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The ratings could be downgraded on a substantial and prolonged deterioration of asset quality, with an impaired loans ratio sustainably above 18%, which would put pressure on the bank's profitability or capitalisation (CET1 ratio below 12% without credible plans to restore it). Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The ratings could be upgraded over the medium term, if the bank lowers its risk appetite and substantially improves its asset quality through healthy new loan origination, legacy loan book clean-up and reduced single-name concentrations. This would have to be combined with a sustainable improvement in profitability, while keeping stable capital buffers, and funding and liquidity. In particular, an upgrade would require the impaired loans ratio to fall below 8% and the operating profit-to-RWAs ratio to sustainably exceed 1%, even after it exits the rehabilitation programme. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS BOS' Government Support Rating (GSR) of 'b' reflects Fitch's view of a limited probability of extraordinary sovereign support for the bank, given that the Polish resolution framework constrains provision of public support for troubled banks, in line with EU state-aid rules. Fitch believes that the state would endeavour to act pre-emptively to avoid BOS breaching regulatory capital adequacy requirements, due to its indirect long-term ownership of the bank and its niche role in financing environmental projects in Poland. The state-owned National Fund for Environment Protection and Water Resource Management (the fund) remains BOS' majority shareholder, with a 58% stake, while state-related entities jointly hold an estimated 72% share. Fitch believes that it would be difficult for the fund to raise more capital at BOS without triggering state-aid and bail-in considerations, if private investors are unwilling to participate in the capital injection. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES BOS's National Ratings are sensitive to changes to its Long-Term IDR and its credit profile relative to Polish peers'. BOS's GSR could be downgraded if the state's indirect ownership in the bank falls below 50% or the state's propensity to support the bank weakens. A potential downgrade of the sovereign rating, which is on Negative Outlook, is unlikely to have a negative impact on BOS's GSR. An upgrade of the bank's GSR would be contingent on a positive change in the sovereign's propensity to support the bank. While not impossible, this is highly unlikely due to the Polish resolution framework and EU state-aid considerations. VR ADJUSTMENTS The capitalisation and leverage score of 'bb-' is below the 'bbb' implied category score due to the following adjustment reason: risk profile and business model (negative). The funding and liquidity score of 'bb' is below the 'bbb' implied category score due to the following adjustment reason: deposit structure (negative). ESG Considerations BOS has an ESG Relevance Score of '4' for Management Strategy, which reflects its view of heightened execution risk of BOS' business plan given high management turnover. This is not a key rating driver but has a negative impact on the bank's credit profile and are relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Bank Ochrony Srodowiska S.A. LT IDR BB- Affirmed BB- ST IDR B Affirmed B Natl LT BBB-(pol) Affirmed BBB-(pol) Natl ST F3(pol) Affirmed F3(pol) Viability bb- Affirmed bb- Government Support b Affirmed b INPOST SA: Fitch Rates EUR850MM 4% Unsecured Notes 'BB+' -------------------------------------------------------- Fitch Ratings has assigned InPost S.A.'s (BB+/Stable) EUR850 million 4.0% senior unsecured notes due 1 April 2031 a 'BB+' rating with a Recovery Rating of 'RR4'. The final rating is in line with the expected rating that Fitch assigned on 8 September 2025, as the receipt of final documentation conformed to the information already received. The bonds' rating is at the same level as InPost's Long-Term Foreign-Currency Issuer Default Rating (IDR) and senior unsecured rating, based on its Corporates Recovery Ratings and Instrument Ratings Criteria. InPost intends to use the proceeds from the notes to redeem its outstanding EUR490 million 2.25% senior notes due 2027 and PLN500 million senior notes due 2027, as well as to partially repay the amounts drawn under its revolving credit facility and to pay accrued interest. InPost's IDR reflects its solid EBITDA growth, high EBITDA margins relative to peers and leverage metrics consistent with a 'BB+' rating. Key Rating Drivers Senior Unsecured Bonds: The senior unsecured notes are issued by the holding company (Holdco) and are guaranteed by InPost's domestic subsidiaries, not its international subsidiaries. For the 12 months to end-June 2025, the issuer and guarantors generated 82.2% of the group's consolidated EBITDA compared with bond documentation requiring at least 80%. Prior-ranking debt at non-guarantor subsidiaries was marginal, which under Fitch's criteria does not indicate material structural subordination or lower recoveries for unsecured creditors. Accordingly, the issue rating is aligned with the group's senior unsecured rating. Financial Results in Line with Expectations: InPost's strong 1H25 results were supported by 8% year on year (yoy) parcel‑volume growth in Poland and about 35% yoy in international markets, which translated into EBITDA growth, while the integration of Yodel, despite restructuring toward profitability, weighed on the EBITDA margin. Fitch forecasts that InPost's Fitch-calculated EBITDA will grow to about PLN2.7 billion in 2025 (2024: PLN2.4 billion) and its financial profile will remain stable. Fitch expects the EBITDA margin will decline to about 18.7% in 2025 (2024: 21.9%), driven by the increasing share of UK business. Acquisitions Support International Growth: In mid-2025, InPost acquired Iberian delivery and fulfilment services company, Sending. This will help InPost improve its logistics network and operating efficiencies in Iberia. InPost also acquired a 10% minority stake in Bloq.it, a company specialising in battery powered automated parcel machines (APMs), which should enable deployment of APMs that do not require grid connections or solar panels, enabling expansion in previously inaccessible locations. Fitch does not view the acquisitions as having a substantial impact on credit metrics and expect EBITDA net leverage to be 1.8x at end-2025, comfortably within rating sensitivities. Integration of Yodel: In April 2025, InPost acquired a 95.5% stake in UK-based logistics company, Yodel, focused on to-door deliveries, gaining an 8% market share in the largest e-commerce market in Europe and creating a platform for further growth. Despite a court trial initiated by the previous owners, InPost has been allowed to proceed with restructuring and integration. InPost is now transforming unprofitable Yodel, mainly through automation and logistics efficiencies, as well as integrating Menzies and Yodel into one network to achieve operational efficiencies. Customer Concentration Risk: InPost is actively onboarding new merchants, especially from the SME segment, diversifying its domestic and international customer base. Allegro and Vinted remain InPost's two largest customers, together accounting for about 40% of revenue. Allegro has been developing its own logistics operations to diversify delivery options, which could lead to changes in the scope of cooperation, especially as the current contract expires in 2027. In 2025, InPost initiated a dispute alleging a breach of the framework agreement, disputing PLN98.7 million. Fitch will monitor the ongoing legal proceedings and the commercial relationship with Allegro. Leverage Consistent with 'BB+' Rating: Fitch projects EBITDA net leverage at around 1.8x at end-2025, consistent with the 'BB+' rating. Fitch expects a further reduction to 1.6x on average in 2026-2029, driven by solid EBITDA growth and positive free cash flow (FCF) before acquisitions. InPost's public target of maintaining EBITDA net leverage around 2.0x is broadly in line with its rating sensitivities at 1.5x-2.3x. Peer Analysis Comparability with large international logistics operators such as Deutsche Post AG (DP; A-/Stable) and La Poste (A+/Stable) is limited, despite similarities in their businesses. This is due to InPost's considerably smaller scale than DP, limited, although growing, international presence and the lack of service-offering diversification, mitigated by its dominant position and solid record of operations in APM in Poland. Fitch believes InPost's geographic diversification has improved in recent years, given its established presence in France, improving market share in the UK, and entry into new markets such as Iberia and Italy. However, it remains weaker than its well-integrated global peers, resulting in lower debt capacity for a given rating. Key Assumptions Fitch's Key Assumptions within its Rating Case for the Issuer: - InPost's parcel volumes to continue to grow by on average 14% a year in 2025-2029 - Contracts to benefit from an annual repricing mechanism - Capex (including maintenance capex) on average at PLN2.1 billion annually over 2025-2029 - Acquisitions totaling PLN2.2 billion in 2025-2029 - No dividends RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 2.3x on a sustained basis - EBITDA interest coverage below 4.5x - Negative FCF through the cycle due to lower operating margin, high dividend pay-outs or major acquisitions Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA net leverage below 1.5x on a sustained basis, supported by EBITDA growth, positive FCF in line with its expectations and a more conservative financial policy - Successful implementation of its international expansion strategy, supporting further growth and diversification, reflected in an increasing share of international businesses in EBITDA towards 50% Liquidity and Debt Structure At end-June 2025, InPost held unrestricted cash and cash equivalents of PLN885.4 million. This compares with its forecast negative FCF after acquisitions and divestitures of about PLN440 million in the next 12 months. InPost aims to use the funds from the EUR850 million issuance to repay its EUR490 million senior unsecured bonds and PLN500 million floating-rate notes. The bond issue will improve the liquidity profile and debt maturity profile. Fitch expects available funds to cover the forecast negative FCF after acquisitions and divestitures in 2025-2026, under its assumption of additional potential acquisitions. Issuer Profile InPost is a leading parcel delivery service in Poland, providing package delivery services through its nationwide network of locker-type APMs, to-door delivery, and fulfilment services. Date of Relevant Committee 19-May-2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- InPost S.A. senior unsecured LT BB+ New Rating RR4 BB+(EXP) =============== P O R T U G A L =============== TAGUS STC: Fitch Hikes Rating on Class E Notes to BB- ----------------------------------------------------- Fitch Ratings has upgraded Tagus, STC S.A. / Vasco Finance No. 2's class C, D and E notes and affirmed the others. Entity/Debt Rating Prior ----------- ------ ----- Tagus, STC S.A. / Vasco Finance No. 2 Class A PTTGUFOM0034 LT AA+sf Affirmed AA+ Class B PTTGUPOM0032 LT A+sf Affirmed A+sf Class C PTTGU7OM0023 LT A-sf Upgrade BBB+ Class D PTTGCEOM0029 LT BBB-sf Upgrade BB+ Class E PTTGCFOM0028 LT BB-sf Upgrade B+ Transaction Summary The transaction is a cash-flow securitisation of a EUR280 million revolving portfolio of credit card receivables originated by WiZink Bank S.A.U. - Sucursal em Portugal (WiZink Portugal). WiZink Portugal, the Portuguese branch of WiZink Bank, S.A.U., registered in Spain and majority-owned by Värde Partners, acts as portfolio servicer, originator and seller. KEY RATING DRIVERS Updated Asset Assumptions: The rating actions reflect its revised steady-state assumptions for the pool, taking into account updated data received from the originator and its expectations for the transaction's performance. The annual charge-off rate and the monthly payment rate are 7% (8% previously) and the annual yield rate assumption 16% (15% previously). All other asset assumptions are unchanged since closing, including the zero purchase rate, which is consistent with the absence of further credit card drawings assigned to the issuer after the end of the revolving period. Fitch has removed the previously applied criteria variation for the class X notes, as they were fully redeemed by transaction excess spread on the January 2025 payment date. Pro Rata Amortisation Influences CE: Fitch expects credit enhancement (CE) for the rated notes to remain stable in the short to medium term, as the transaction is scheduled to start amortising pro-rata in October 2025 after the end of the revolving period, unless a sequential amortisation event is triggered. The tail risk posed by the pro rata paydown is mitigated by the mandatory switch to sequential amortisation when the notes' balance falls below 10% of its initial balance. Counterparty Rating Cap: The maximum achievable rating on the transaction remains 'AA+sf' due to the minimum eligibility rating thresholds defined for the transaction account bank and the hedge provider of 'A-' or 'F1', which are insufficient to support 'AAAsf' ratings under Fitch's criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Long-term asset performance deterioration such as increased charge-offs, reduced monthly payment rate or reduced portfolio yield, which could be driven by changes in portfolio characteristics, macroeconomic conditions, business practices or legislative landscape. For example, a 25% increase in charge offs would result in downgrades of one to two notches for all notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Better asset performance than expected, such as lower charge offs and higher yield. For example, a 15% reduction in charge offs combined with a 15% increase of yield would result in upgrades of two to three notches for the class B to E notes. CE ratios increase as the transaction deleverages and are able to fully compensate for the credit losses and cash flow stresses commensurate with higher rating cases. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. 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. =========== T U R K E Y =========== LIMAK YENILENEBILIR: Fitch Alters Outlook on 'BB-' IDR to Negative ------------------------------------------------------------------ Fitch Ratings has revised the Outlook on Limak Yenilenebilir Enerji Anonim Sirketi (Limak RES)'s Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'BB-'. The Outlook revision reflects its expectations of a weaker EBITDA in 2025 and higher capex due to frontloading of some investments, leading to funds from operations (FFO) net leverage above its downgrade sensitivity between 2025 and 2027. Slower deleveraging than expected, due to weaker profitability, higher than expected investments or dividends would lead to a downgrade of the rating. The affirmation of the IDR underscores Limak RES's strong revenue visibility, healthy asset quality, largely mitigated FX risks, and supportive regulation for renewable energy producers in Turkiye (BB-/Stable). These factors are countered by the company's small scale, limited geographical diversification and nearly 90% of its EBITDA being generated from two plants. Key Rating Drivers Weak Generation Affects EBITDA: Fitch expects consolidated power generation in 2025 to be 27% lower than its previous forecast, mainly due to very poor hydrological conditions in 1H25 that are unlikely to recover in the second half (past wet season). Fitch expects EBITDA to be USD80 million-85 million in 2025, 23% below its previous forecast, and assume production in line with the historical average over the medium term, with EBITDA recovering to USD110 million-115 million by 2027. High Leverage: Fitch forecasts FFO net leverage at a high 5.0x in 2025, driven by accelerated capex and lower EBITDA. Fitch expects an average FFO net leverage of 3.8x in 2026-2027, above the negative rating sensitivity of 3.5x, which drives the Negative Outlook. Fitch anticipates FFO net leverage will return within its rating sensitivities in 2028 and fall to 1.9x in 2029, when development capex has been executed and the Incir and Pervari power plants contribute on a full-year basis to EBITDA. Slower deleveraging than expected, due to weaker profitability or higher investments and dividends than expected, would lead to a downgrade of the rating. Accelerated Growth Capex Pressures FCF: Fitch forecasts capex of USD560 million (TRY26.1 billion) across 2025-2029, mostly for the development of two new hydro power plants (415MW combined), the Alkumru hybrid solar power plant and a solar plant. This figure is cumulatively similar to its prior forecast, but the company has accelerated its 2025 investments by about 70% compared to the previous forecast, at USD177 million (TRY7.0 billion), with the aim of finishing the Incir hydro project by March 2027 to benefit from the wet season. The high capex drives its forecast of cumulative negative free cash flow (FCF) of USD215 million in 2025-2028. Capex Flexibility: Limak RES has some flexibility in executing its growth capex and could alter its schedule to manage debt and leverage if needed. However, Fitch sees some execution risk, because the projects are large in relative terms for the scale of the company and a delay or cost overrun would lead to a slower deleveraging. The company has an internal target of net debt/EBITDA of 3.0x, which is consistent with the current rating. Unchanged Business Profile: Its assessment of Limak RES's business risk profile is unchanged. The company is a small renewable energy producer with an installed capacity of 829MW at end-March 2025. Asset concentration is high, with two hydro plants generating almost 90% of 2024 EBITDA. Fitch expects this percentage to drop in the medium term as the company has two hydro plants under construction and development that it expects to be operational in 2027 and 2029, respectively. Regulatory Support Framework: 63% of Limak RES's capacity benefits from the renewable energy support mechanism (YEKDEM) and Renewable Energy Resource Area. YEKDEM grants 10-year, US dollar-denominated fixed feed-in tariffs (FiT). These assets face minimal price risk and low offtake risk, as all renewable output is purchased by the Energy Market Regulatory Authority. After 10 years, assets move to merchant status and the electricity generated is sold at wholesale prices in Turkish lira, introducing price and FX risk. Moderate Merchant Exposure: The company has an average remaining FiT life of five years, longer than most Fitch-rated Turkish peers, supporting its business risk profile and debt capacity. FiT revenues should stay above 50% in 2025-2026 and rise to 70% by 2029 with two new incentivised hydro plants. The company can annually elect to sell part of output outside the FiT, retaining upside when price expectations are strong, as in 2022-2024. Acceptable Liquidity Post Refinancing: Limak RES issued a USD525 million, senior unsecured green note in 1Q25 (USD450 million followed by a USD75 million tap), with the funds used to repay USD235.8 million of bank debt and USD27.1 million of transaction expenses; the remainder will be allocated to partially finance USD499 million of growth capex between 2025 and 2029, with the remaining capex funded with cash flow from operations. Peer Analysis Limak RES operates under the same regulatory framework as Zorlu Enerji Elektrik Uretim A.S. (B+/Stable) and Aydem Yenilenebilir Enerji Anonim Sirketi (B/Positive), its closest peers. Fitch assesses Aydem's business risk profile as weaker than Limak RES's, given its increasing merchant exposure, which is expected to reach 85% by end-2027, compared with Limak RES's 40%. Fitch regards Limak RES's business risk profile as slightly weaker than Zorlu's and, therefore, assign Zorlu slightly higher debt capacity. The latter benefits from exposure to regulated electricity distribution in Turkiye, which Fitch views as supportive, though its framework is less transparent than that in western Europe, especially in a high inflation environment. Limak RES's reliance on two hydro plants leads to more volatile generation volumes than the stable output from Zorlu's geothermal power plants. However, Zorlu's remaining incentive life under YEKDEM is shorter. Limak RES's business profile is stronger than Uzbekhydroenergo JSC's (UGE, BB/Stable, SCP b+), an Uzbekistan-based hydro power generator, due to higher revenue visibility supported by FiT and its superior asset quality. The latter has a lower debt capacity than Limak RES, although this is based on gross leverage. Key Assumptions - Annual GDP growth in Turkiye of 3.8% between 2025 and 2029 - Inflation averaging 24% a year in 2025-2029, down from 60% in 2024 - Exchange rate (year-end) US dollar/Turkish lira increasing to 56 in 2029 from 36 in 2024 - Electricity generation volumes at 3% to 5% below management forecasts between 2025 and 2029 - Wholesale price of about USD76 per megawatt hour over 2025-2029 (after achieved premiums for hydro) - Average annual capex of USD140 million in 2025-2028 - No dividend distribution over 2025-2029, in line with management forecast RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downward revision of Turkiye's 'BB-' Country Ceiling - Higher than expected capex or a generation volume well below forecasts leading to an FFO net leverage above 3.5x on a sustained basis - FFO interest cover sustainably below 2.8x - Deterioration of the business mix, with FiT-linked revenue representing less than 50% on a structural basis, could lead to a tightening of rating sensitivities Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The Negative Outlook means that an upgrade is unlikely, but Fitch could revise the Outlook to stable, based on a recovery in power generation leading to a FFO net leverage below 3.5x on sustained basis. Liquidity and Debt Structure At 31 May 2025, Limak RES had USD271 million of cash and cash equivalents, sufficient to finance its expected negative FCF in 2025-2026 and maturing bank debt. The company issued a new bond in 2025 (USD525 million), improving its liquidity and funding its long-term investment plan. Under its rating case, it will not need to raise new debt until 2028. Issuer Profile Limak RES is a renewable energy power generation company based in Turkiye. The company owns and operate seven plants with a total installed capacity of 829 megawatts, and has 50% in three hydro power plants (156 megawatts) through a 50% joint venture. 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 ----------- ------ -------- ----- Limak Yenilenebilir Enerji Anonim Sirketi LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- =========================== U N I T E D K I N G D O M =========================== ARAMIT PROPERTIES: Grant Thornton UK Named as Administrators ------------------------------------------------------------ Aramit Properties Ltd was placed into administration proceedings in the High Court Of Justice, Business And Property Court, No 005638 of 2025, and Oliver Haunch, Robert N Starkins, and Kevin J Hellard of Grant Thornton UK Advisory & Tax LLP were appointed as administrators on Aug. 22, 2025. Aramit Properties engaged in the buying and selling of own real estate. Its registered office is c/o Grant Thornton UK Advisory & Tax LLP, 11th Floor, Landmark St Peter's Square, 1 Oxford St, Manchester, M1 4PB Its principal trading address is at 351a Green Street, London, E13 9AR The joint administrators can be reached at: Oliver Haunch Robert N Starkins Kevin J Hellard Grant Thornton UK Advisory & Tax LLP 8 Finsbury Circus, London EC2M 7EA Tel No: 020 7184 4300 For further details, contact: CMU Support Grant Thornton UK Advisory & Tax LLP 8 Finsbury Circus London, EC2M 7EA Tel No: 0161 953 6906 Email: cmusupport@uk.gt.com AVONDALE ENVIRONMENTAL: BDO LLP Named as Administrators ------------------------------------------------------- Avondale Environmental Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD), Court Number: CR-2025-006074, and James Stephen and Kerry Bailey of BDO LLP were appointed as administrators on Sept. 2, 2025. Avondale Environmental specialized in remediation activities. Its registered office is at Hillhouse International Business Park, Fleetwood Road North, Thornton-Cleveleys, FY5 4QD to be changed to C/O BDO LLP, 5 Temple Square, Temple Street, Liverpool, L2 5RH Its principal trading address is at Avondale Environmental Ltd, Avondale Road, Falkirk, FK2 0YA The joint administrators can be reached at: Kerry Bailey BDO LLP Eden Building Irwell Street Salford, M3 5EN -- and -- James Stephen BDO LLP 2 Atlantic Square 31 York Street Glasgow G2 8NJ For further details, contact: Owen Casey Tel No: +44 151 237 4437 Email: BRCMTNorthandScotland@bdo.co.uk CMG LEISURE: Exigen Group Named as Administrators ------------------------------------------------- CMG Leisure Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts at London, Court Number: CR-2025-006053, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on Sept. 2, 2025. CMG Leisure is a manufacturer of sports goods. Its registered office is at Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD Its principal trading address is c/o Mark Holt & Co Ltd, 7 Sandy Court, Ashleigh Way, Langage Business Park, Plymouth, PL7 5JX 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 Further details, contact: David Kemp Tel No: 0207 538 2222 CRICHTON MANUFACTURING: Exigen Group Named as Administrators ------------------------------------------------------------ Crichton Manufacturing Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts at London Court Number: CR-2025-006052, and David Kemp and Richard Hunt of Exigen Group Limited were appointed as administrators on Sept. 2, 2025. Crichton Manufacturing engaged in aluminum production. Its registered office is at Warehouse W, 3 Western Gateway, Royal Victoria Docks, London, E16 1BD Its principal trading address is at Unit 3b Celtic Road, Moss Side Industrial Estate, Callington, Cornwall, PL17 7SD 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 G.R. & M.M. BLACKLEDGE: Interpath Named as Administrators --------------------------------------------------------- G.R. & M.M. Blackledge PLC was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales Insolvency and Companies List (ChD), No CR-2025-005835, and Nicholas Holloway, Christopher Robert Pole, and Michael Leeds of Interpath of were appointed as administrators on Sept. 5, 2025. G.R. & M.M. Blackledge specialized in the retail sale of cosmetic and toilet articles. Its registered office is c/o Interpath Ltd, 10 Fleet Place, London, EC4M 7RB Its principal trading address is at 9 Western Avenue, Matrix Park, Leyland, Lancashire, PR7 7NB The joint administrators can be reached at: Nicholas Holloway Christopher Robert Pole Interpath Ltd Fleet Place London EC4M 7RB For further details, contact: bodycare@interpath.com ITHACA ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Ithaca Energy plc's Long-Term Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. Concurrently, Fitch has affirmed the senior unsecured rating assigned to the bonds issued through Ithaca Energy (North Sea) plc at 'BB-'. The Recovery Rating is 'RR4'. Ithaca's rating reflects its growing scale and operational diversification in the UK North Sea, low leverage, and conservative financial policy. Fitch forecasts Ithaca's EBITDA net leverage will remain low on average at 1x in 2025-2028. These strengths are counterbalanced by Ithaca's short reserve life relative to peers at around five years on a 1P basis, concentrated exposure to the mature UK Continental Shelf (UKCS) with high operating costs of over USD15 per barrel of oil equivalent (boe), high taxation and a less predictable tax regime. Fitch rates Ithaca on a standalone basis given its diluted shareholding structure and limited linkage. Key Rating Drivers Acquisition-Driven Growth: Ithaca's strategy includes a stated intention to diversify, replenish and grow reserves partly through inorganic means. The company executed a transformational business combination with Eni UK in 2024 and signed bolt-on acquisitions of incremental stakes in the Cygnus and Seagull fields in 1H25. These transactions have benefited the business profile, helping increase production and reserves, while leverage has remained low. Fitch expects M&A to remain part of the company's strategy but risk is mitigated by its record of balancing acquisitions with a focus on maintaining company-defined EBITDAX net leverage below 1.5x through the cycle. Improving Production Mix: The merger with Eni UK and recent bolt-on acquisitions have materially increased Ithaca's scale, with 1H25 production of 124 thousand barrels of oil equivalent per day (mboe/d) and its expectation of full-year production averaging 122mboe/d. The company's higher gas weighting after the transaction provides a more balanced exposure to oil and gas prices, with 1H25 production split 59% liquids and 41% gas, compared with 69% liquids and 31% gas in 1H24. Moderate Reserve Life: The company's reserve base was 213 million barrels of oil equivalent (mmboe) on a proved (1P) basis and to 340 mmboe on a proved and probable basis (2P) at end-2024. Pro forma for bolt-on acquisitions signed earlier this year, reserve life will be unaffected, while the absolute amount of reserves will increase to around 231mmboe on a 1P basis and 370mmboe on a 2P basis. Fitch expects the company's pro forma reserve life to be around five years on a 1P basis at end-2024, and eight years on a 2P basis, which is lower than peers. Greenfield Projects: The company's 1P and 2P reserve life is mitigated by substantial contingent (2C) resources including greenfield projects (e.g. Cambo) that could support Ithaca's business profile in the long term, and brownfield projects linked to existing assets that offer short payback periods. Ithaca's low leverage should also allow inorganic reserve replenishment, subject to market conditions. Lower Production Costs: Economies of scale, portfolio optimisation and strict cost control have resulted in lower unit costs. Unit opex was USD17.5/boe in 1H25 (1H24: USD27.3/boe), and management has guided towards USD17-19/boe for full year 2025, with the aim of maintaining opex around USD20/boe in the medium term. This is an improvement on historical very high unit opex, but Fitch still consider the company's costs higher than average. Supportive Shareholders: Fitch views the presence of Eni in Ithaca's shareholding structure as credit positive. Eni owns around 36% of Ithaca's shares, reducing Delek Group's ownership to around 51% from around 90%. Ithaca will also benefit from Eni's industry expertise and capabilities as Eni has appointed the CEO, two non-executive board members and other senior technical management roles. Fitch believes the largest shareholders are both supportive of Ithaca's independent strategy and financial policy. Fitch rates Ithaca on a standalone basis without any credit links to its shareholders due to the diluted shareholding structure and limited linkage. Disciplined Capital Allocation: Ithaca's capital allocation priorities have remained consistent in their focus on maintaining a conservative leverage profile and a flexible dividend policy with payouts sized according to underlying cash flow generation and market conditions. The company is committed to maintaining gross leverage below 1.5x EBITDAX and common dividends at 15%-30% of post-tax cash flow from operations (CFO). Excess cash flow may be used for special dividends or inorganic business growth. Low Leverage: Fitch forecasts Ithaca's EBITDA net leverage will remain low at around 0.9x in 2025, before rising slightly to 1.2x in 2028 as Fitch assumes hydrocarbon prices will decline towards mid-cycle levels. Increased capex for Rosebank, decommissioning costs, tax charges and dividend payments in line with Ithaca's dividend policy will weigh on free cash flow until 2027. Nonetheless, Fitch expects Ithaca to maintain adequate rating headroom. Tax Burden Manageable: Fitch believes the UK government's combined tax rate of 78% after revisions in July 2024 will be manageable, due to Ithaca's material tax losses, which should allow it to offset future profits, and a relief mechanism under the Energy Profit Levy for when both oil and gas prices are very low. Fitch estimates the annual tax charge will average about USD235 million in 2025-2028, equivalent to about 14% of Fitch-defined annual EBITDA. However, lack of clarity on the evolution of taxation in the UKCS reduces longer-term cash flow visibility. It may also affect Ithaca's ability to secure partners for large projects, and influence investment on non-operated assets. Peer Analysis Ithaca's 2P reserve life is about eight years, in line with Harbour Energy PLC (BBB-/Stable) but significantly below Energean plc's (BB-/Stable) 24-year reserve life. Harbour's reserve base benefits from its acquisition of Wintershall Dea GmbH in September 2024, while Energean's extended reserve life reflects its strong concentration in lower‐cost Israeli gas assets. Ithaca's reserve life is underpinned by the Eni UK transaction and recent bolt-on acquisitions, but remains shorter due to a mature asset base in the UK North Sea. Fitch expects Ithaca's 2025 production of around 122mboe/d will trail Harbour's run rate production of around 450mboe/d and Energean's 170-180mboe/d. Fitch expects Ithaca's operating costs to trend around USD20/boe, compared to Harbour's operating costs of USD14/boe and Energean's USD10/boe. Harbour's scale and diversification drive its lower cost base, while Energean's focus on Israeli gas supports its lower costs. Recent acquisitions and efficiency measures have improved unit economics, but Ithaca's cost profile remains higher than average. Key Assumptions Fitch's Key Assumptions within Its Rating Case for the Issuer - Brent price at USD70/bbl in 2025, USD65/bbl in 2026-2027 and USD60/bbl in 2028 - Title transfer facility gas price at USD12/mcf in 2025, USD8/mcf in 2026 and USD7/mcf in 2027-2028 - Consolidated production of 122mboe/d in 2025, 134mboe/d in 2026, 126mboe/d in 2027 and 110mboe/d in 2028 - Annual capex averaging about USD712 million in 2025-2028 - Annual decommissioning costs averaging around USD139 million in 2025-2028 - Dividends in line with public dividend policy at USD500 million in 2025, 15%-30% of CFO in 2026-2028 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 2x or funds from operations (FFO) net leverage above 2.5x on a sustained basis - Production falling significantly below 100mboe/d on a sustained basis or inability to replenish reserves to current levels Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Increase in production to at least 150mboe/d with a proved reserve life sustained above five years - Geographic business diversification while maintaining EBITDA net leverage below 1x or FFO net leverage below 1.5x Liquidity and Debt Structure Ithaca held USD439 million of cash and USD790 million available liquidity under its reserve-based loan facility as of 2Q25 compared to no short-term debt. Issuer Profile Ithaca is an exploration and production company focusing on the UK North Sea. 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 Ithaca has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to high decommissioning obligations relative to global peers, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Ithaca has an ESG Relevance Score of '4' for GHG Emissions & Air Quality due to the company's operations in a stringent climate-related regulatory environment, high cost of production and energy transition strategies focusing only on Scope 1 and 2 emissions. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Ithaca Energy (North Sea) Plc senior unsecured LT BB- Affirmed RR4 BB- Ithaca Energy plc LT IDR BB- Affirmed BB- ITHACA ENERGY: Fitch Rates EUR400MM Notes Due 2031 'BB-' -------------------------------------------------------- Fitch Ratings has assigned Ithaca Energy (North Sea) Plc's EUR400 million notes due 2031 a senior unsecured rating of 'BB-' with a Recovery Rating of 'RR4'. The notes are guaranteed on a senior unsecured basis by Ithaca Energy (E&P) Limited, fully owned by Ithaca Energy plc (Ithaca, BB-/Stable), and on a senior subordinated basis by certain subsidiaries which secure its reserve-based lending (RBL) facility. The notes will rank pari passu with the issuer's existing USD750 million notes due 2029. Proceeds will be used to repay RBL borrowings, fund certain ongoing bolt-on M&A, and to replenish liquidity. Ithaca's 'BB-' Long-Term Issuer Default Rating (IDR) reflects its growing scale and operational diversification, low leverage, and conservative financial policy. These strengths are counterbalanced by a short proved reserve life relative to peers, asset concentration in the UK Continental Shelf (UKCS) with high operating costs and a high and less predictable tax regime. Fitch rates Ithaca on a standalone basis given its diluted shareholding and limited linkage. Key Rating Drivers Acquisition-Driven Growth: Ithaca's strategy includes a stated intention to diversify, replenish and grow reserves partly through inorganic means. The company executed a transformational business combination with Eni UK in 2024 and signed bolt-on acquisitions of incremental stakes in the Cygnus and Seagull fields in 1H25. These transactions have benefited the business profile, helping increase production and reserves, while leverage has remained low. Fitch expects M&A to remain part of its strategy but risk is mitigated by its record of balancing acquisitions with a focus on maintaining company-defined EBITDAX net leverage below 1.5x through the cycle. Improving Production Mix: The merger with Eni UK and recent bolt-on acquisitions have materially increased Ithaca's scale, with 1H25 production of 124 thousand barrels of oil equivalent per day (mboe/d) and its expectation of full-year production averaging 122mboe/d. The company's higher gas weighting after the transaction provides a more balanced exposure to oil and gas prices, with 1H25 production split 59% liquids and 41% gas, compared with 69% liquids and 31% gas in 1H24. Moderate Reserve Life: The company's reserve base was 213 million barrels of oil equivalent (mmboe) on a proved (1P) basis and 340 mmboe on a proved and probable basis (2P) at end-2024. Pro forma for bolt-on acquisitions signed earlier this year, reserve life will be unaffected, while the absolute amount of reserves will increase to around 231mmboe on a 1P basis and 370mmboe on a 2P basis. Fitch expects the company's pro forma reserve life to be around five years on a 1P basis at end-2024, and eight years on a 2P basis, which is lower than peers. Greenfield Projects: The company's 1P and 2P reserve life is mitigated by substantial contingent (2C) resources including greenfield projects (e.g. Cambo) that could support Ithaca's business profile in the long term, and brownfield projects linked to existing assets that offer short payback periods. Ithaca's low leverage should also allow inorganic reserve replenishment, subject to market conditions. Lower Production Costs: Economies of scale, portfolio optimisation and strict cost control have resulted in lower unit costs. Unit opex was USD17.5/boe in 1H25 (1H24: USD27.3/boe), and management has guided towards USD17-19/boe for full year 2025, with the aim of maintaining opex around USD20/boe in the medium term. This is an improvement on historical very high unit opex, but Fitch still consider the company's costs higher than average. Supportive Shareholders: Fitch views the presence of Eni in Ithaca's shareholding structure as credit positive. Eni owns around 36% of Ithaca's shares, reducing Delek Group's ownership to around 51% from around 90%. Ithaca will also benefit from Eni's industry expertise and capabilities as Eni has appointed the CEO, two non-executive board members and other senior technical management roles. Fitch believes the largest shareholders are both supportive of Ithaca's independent strategy and financial policy. Fitch rates Ithaca on a standalone basis without any credit links to its shareholders due to the diluted shareholding structure and limited linkage. Disciplined Capital Allocation: Ithaca's capital allocation priorities have remained consistent in their focus on maintaining a conservative leverage profile and a flexible dividend policy with payouts sized according to underlying cash flow generation and market conditions. The company is committed to maintaining gross leverage below 1.5x EBITDAX and common dividends at 15%-30% of post-tax cash flow from operations (CFO). Excess cash flow may be used for special dividends or inorganic business growth. Low Leverage: Fitch forecasts Ithaca's EBITDA net leverage will remain low at around 0.9x in 2025, before rising slightly to 1.2x in 2028 as Fitch assumes hydrocarbon prices will decline towards mid-cycle levels. Increased capex for Rosebank, decommissioning costs, tax charges and dividend payments in line with Ithaca's dividend policy will weigh on free cash flow until 2027. Nonetheless, Fitch expects Ithaca to maintain adequate rating headroom. Tax Burden Manageable: Fitch believes the UK government's combined tax rate of 78% after revisions in July 2024 will be manageable, due to Ithaca's material tax losses, which should allow it to offset future profits, and a relief mechanism under the Energy Profit Levy for when both oil and gas prices are very low. Fitch estimates the annual tax charge will average about USD235 million in 2025-2028, equivalent to about 14% of Fitch-defined annual EBITDA. However, lack of clarity on the evolution of taxation in the UKCS reduces longer-term cash flow visibility. It may also affect Ithaca's ability to secure partners for large projects, and influence investment on non-operated assets. Peer Analysis Ithaca's 2P reserve life is about eight years, in line with Harbour Energy PLC (BBB-/Stable) but significantly below Energean plc's (BB-/Stable) 24-year reserve life. Harbour's reserve base benefits from its acquisition of Wintershall Dea GmbH in September 2024, while Energean's extended reserve life reflects its strong concentration in lower‐cost Israeli gas assets. Ithaca's reserve life is underpinned by the Eni UK transaction and recent bolt-on acquisitions, but remains shorter due to a mature asset base in the UK North Sea. Fitch expects Ithaca's 2025 production of around 122mboe/d will trail Harbour's run rate production of around 450mboe/d and Energean's 170-180mboe/d. Fitch expects Ithaca's operating costs to trend around USD20/boe, compared to Harbour's operating costs of USD14/boe and Energean's USD10/boe. Harbour's scale and diversification drive its lower cost base, while Energean's focus on Israeli gas supports its lower costs. Recent acquisitions and efficiency measures have improved unit economics, but Ithaca's cost profile remains higher than average. Key Assumptions Fitch's Key Assumptions within Its Rating Case for the Issuer - Brent price at USD70/bbl in 2025, USD65/bbl in 2026-2027 and USD60/bbl in 2028 - Title transfer facility gas price at USD12/mcf in 2025, USD8/mcf in 2026 and USD7/mcf in 2027-2028 - Consolidated production of 122mboe/d in 2025, 134mboe/d in 2026, 126mboe/d in 2027 and 110mboe/d in 2028 - Annual capex averaging about USD712 million in 2025-2028 - Annual decommissioning costs averaging around USD139 million in 2025-2028 - Dividends in line with public dividend policy at USD500 million in 2025, 15%-30% of CFO in 2026-2028 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 2x or funds from operations (FFO) net leverage above 2.5x on a sustained basis - Production falling significantly below 100mboe/d on a sustained basis or inability to replenish reserves to current levels Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Increase in production to at least 150mboe/d with a proved reserve life sustained above five years - Geographic business diversification while maintaining EBITDA net leverage below 1x or FFO net leverage below 1.5x Liquidity and Debt Structure Ithaca held USD439 million of cash and USD790 million available liquidity under its RBL facility as of 2Q25 and had no short-term debt. Issuer Profile Ithaca is an exploration and production company focusing on the UK North Sea. Date of Relevant Committee 11 September 2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Ithaca has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to high decommissioning obligations relative to global peers, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Ithaca has an ESG Relevance Score of '4' for GHG Emissions & Air Quality due to the company's operations in a stringent climate-related regulatory environment, high cost of production and energy transition strategies focusing only on Scope 1 and 2 emissions. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- Ithaca Energy (North Sea) Plc senior unsecured LT BB- New Rating RR4 ITHACA ENERGY: S&P Rates New EUR400MM Unsec. Notes 'BB-' -------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue rating on the proposed EUR400 million equivalent senior unsecured notes issued by Ithaca Energy PLC (Ithaca). S&P assigned a '4' recovery rating to the notes, reflecting its expectation of meaningful recovery prospects of between 30%-50% in the event of a default. The recovery rating considers that the proposed notes will rank pari passu to the existing senior unsecured notes due 2029 and will benefit from the same guarantors. Ithaca are looking to raise EUR400 million equivalent notes. These proposed notes will largely be used to prefund the most recent merger and acquisition transaction of Cygnus (where the company have increased their operating interest in the gas field to 85%), repaying a portion of the reserve-based lending (RBL) drawings and the remainder being applied toward general corporate uses. As part of the transaction, the company also intends to increase the size of the cash tranche of its RBL facility to $1.3 billion from $1 billion previously, through exercising an accordion facility. As part of our recovery analysis, S&P has updated its valuation of Ithaca's reserves based on the latest available PV-10 as of fiscal 2024 (ended 31 Dec), applying its recovery price deck assumptions of $55 per barrel for Brent and $6 million British thermal units for TTF. Issue Ratings--Recovery Analysis Key analytical factors -- The issue rating on the existing senior unsecured notes due 2029 and newly proposed senior unsecured notes due 2032 are 'BB-', and the recovery ratings are '4'. -- The group's oil and gas reserves support the recovery rating but is somewhat constrained by the RBL ranking ahead of the notes. The recovery rating is '4', reflecting S&P's expectations of substantial recovery in the event of a default, in line with our methodology. -- S&P bases its recovery analysis on the proposed capital structure, assuming RBL availability of about $1.3 billion, unsecured debt of about $700 million and new unsecured notes of $460 million due 2032. -- S&P values Ithaca's reserves under our recovery rating assumptions. These incorporate value from the Proved and probable (2P) reserves, although on a reduced basis, as the banks include some 2P reserves in the RBL borrowing base. -- S&P said, "In our hypothetical default scenario, we assume a sharp drop in oil prices and operational issues that reduce production levels, potentially after a material acquisition. We value the company as a going concern. We see the primary source of recovery as Ithaca's oil and gas reserves." Simulated default assumptions -- Year of default: 2029 -- Jurisdiction: U.K. Simplified waterfall -- Net enterprise value available to creditors (after administrative costs): $1.54 billion -- First-lien debt: $1.1 billion -- Senior unsecured debt claims: $1.2 billion --Recovery expectation: 30%-50% (rounded estimate: 40%) --Recovery rating: '4' All debt amounts include six months of prepetition interest. NP ENERGY: SPK Financial Named as Administrators ------------------------------------------------ NP Energy Services Ltd was placed into administration proceedings in the High Court of Justice Business and Property Court in Manchester Company and Insolvency List, No CR-2025-MAN-001240, and Stuart Kelly and Claire Harsley of SPK Financial Solutions Limited were appointed as administrators on Sept. 4, 2025. NP Energy Services engaged in engineering design activities for industrial process and production. Its registered office and principal trading address is at 20-22 Wenlock Road, London, England, N1 7GU. The joint administrators can be reached at: Stuart Kelly Claire Harsley SPK Financial Solutions Limited 7 Smithford Walk Prescot Liverpool L35 1SF For further details, contact: Adam Farnworth Tel No: 0151 739 2698 Email: info@spkfs.co.uk POWERTRAIN WARWICK: Begbies Traynor Named as Administrators ----------------------------------------------------------- Powertrain Warwick Ltd was placed into administration proceedings in the High Court of Justice Business and Property Courts in Birmingham, Insolvency & Companies List (ChD), Court Number: CR-2025-000479, and Gary Paul Shankland and Irvin Cohen of Begbies Traynor (London) LLP were appointed as administrators on Sept. 3, 2025. Fosse Way Court (Management) engaged in engineering activities. Its registered office is at 2 Titan Business Centre, Spartan Close, Royal Leamington Spa, CV34 6RR. The joint administrators can be reached at: Gary Paul Shankland Irvin Cohen Begbies Traynor (London) LLP 31st Floor, 40 Bank Street London, E14 5NR For further details, contact: Daniel Karr Begbies Traynor (London) LLP Email: Daniel.Karr@btguk.com Tel: 020 7516 1500 TOGETHER ASSET 2024-1ST1: Fitch Affirms BB+sf Rating on Cl. E Notes ------------------------------------------------------------------- Fitch Ratings has upgraded Together Asset Backed Securitisation 2024-1ST1 PLC (TABS 2024-1ST1) and Together Asset Backed Securitisation 2024-1ST2 PLC (TABS 2024-1ST2) class B and C notes and affirmed the others. All ratings have been removed from Under Criteria Observation. Entity/Debt Rating Prior ----------- ------ ----- Together Asset Backed Securitisation 2024-1ST1 PLC A XS2795571400 LT AAAsf Affirmed AAAsf B XS2795572630 LT AA+sf Upgrade AA-sf C XS2795572713 LT A+sf Upgrade Asf D XS2795572986 LT BBBsf Affirmed BBBsf E XS2795573109 LT BB+sf Affirmed BB+sf Together Asset Backed Securitisation 2024-1ST2 PLC Class A XS2888410557 LT AAAsf Affirmed AAAsf Class B XS2888410714 LT AA+sf Upgrade AAsf Class C XS2888411365 LT A+sf Upgrade Asf Class D XS2888411795 LT BBB-sf Affirmed BBB-sf Class E XS2888412173 LT BB+sf Affirmed BB+sf Transaction Summary The transactions are securitisations of buy to-let (BTL) and owner-occupied (OO) mortgages backed by properties in the UK, originated by Together Personal Finance and Together Commercial Finance, two fully owned subsidiaries of Together Financial Services Limited (Together; BB/Stable/B). 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 (WAFF), changes to sector selection, revised recovery rate (RR) assumptions and changes to cash flow assumptions. The non-conforming sector representative 'Bsf' WAFF has seen the largest revision. Fitch applies newly introduced borrower-level recovery rate caps to underperforming seasoned collateral, for BTL sub-portfolios in this case (RR cap is 85% at 'Bsf' and 65% at 'AAAsf'). Fitch applies dynamic default distributions and high prepayment rate assumptions rather than the previous static assumptions. Fitch's updated criteria accounts for worsening asset performance by assuming loans in 12-months plus have defaulted at the review date. Transaction Adjustment Updated: Fitch has updated the transaction adjustment (TA) based on historical performance data provided by Together and its updated UK RMBS Rating Criteria. Under the previous criteria, the originator adjustment was 1.4x and 1.5x for the OO and BTL sub-pools, respectively. The TA is now 2.0x for both sub-pools leading to WAFF assumptions in line with those for previous TABS transactions. The alignment of WAFF assumptions reflects Fitch's unchanged opinion on Together's origination and underwriting policies and practices and historical performance data. Deteriorating Arrears Performance: One-month plus and three-month plus arrears for TABS 20241-ST1 were 9.3% and 4.2%, respectively, at May 2025, slightly up from 8.9% and 2.9% in November 2024. TABS 2024-1ST2 one-month plus arrears increased to 5.3% in April 2025 from 4.1% at April 2024 and three-month plus arrears to 3.5% from 2.2%. Further arrears increase could result in higher FF assumptions in Fitch's analysis, which is reflected in the Negative Outlook on TABS 2024-1ST1's class E notes. CE Build-Up: Credit enhancement (CE) has increased for the class A notes to 18% at June 2025 from 12.9% at closing for TABS 20241-ST1 and 13.4% at July 2025 from 10.5% at closing for TABS 20241-ST1, reflecting sequential amortisation of the notes. The class E notes will not benefit from any CE build-up until the turbo feature is triggered after the optional redemption date and provided excess spread is available. The class E notes are therefore more exposed to asset performance deterioration than the rest of the capital structure and may be downgraded should asset performance fail to improve. PIR Caps Ratings: The lack of a reserve fund or any other source of liquidity exposes the transaction to payment interruption risk (PIR). The class C, D and E notes in both transactions are timely when most senior, meaning non-payment of interest on the most senior notes outstanding would result in an event of default. The notes may be exposed to a payment interruption event, where the issuer temporarily has insufficient funds to make payments, which could result in an event of default. Fitch deems PIR to be mitigated up to 'A+sf', which the ratings are capped at. High-Yield Assets: The assets in the portfolio earn higher interest rates than is typical for prime mortgage loans and can generate excess spread to cover losses. The weighted average asset yield for TABS 20241-ST1 was 8.1% at April 2025 and 8.9% for TABS 2024-1ST2 at May 2025. Prior to the step-up date, excess spread was used to pay down the unrated class X notes, which have now been paid in full. On and after the step-up date, any available excess spread is diverted to the principal waterfall and can be used to amortise the rated notes. Specialised Lending: Together takes a manual approach to underwriting, focusing on borrowers that do not necessarily qualify on the automated scorecard models of high-street lenders. It attracts a higher proportion of borrowers with complex incomes, notably self-employed (where Fitch applied a 1.3x FF adjustment compared with the standard FF adjustment of 1.2x) and borrowers with adverse credit histories, than is typical for prime UK lenders. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transactions' performance may be affected by changes in market conditions and economic environment. Weakening economic performance is strongly correlated with increasing levels of delinquencies and defaults that could reduce CE available to the notes. Additionally, unanticipated declines in recoveries could also 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 WARR would imply the following: TABS 2024-1ST1 Class A: 'AA+sf' Class B: 'AA-sf' Class C: 'A-sf' Class D: 'BB+sf' Class E: 'B-sf' TABS 2024-1ST2 Class A: 'AA+sf' Class B: 'AA-sf' Class C: 'A-s'f Class D: 'BB+sf' Class E: 'BB+sf' Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch found that a decrease in the WAFF of 15% and an increase in the WARR of 15% would lead to the following: TABS 2024-1ST1 Class A: 'AAAsf' Class B: 'AAAsf' Class C: 'A+sf' Class D: 'A+sf' Class E: 'BBB-sf' TABS 2024-1ST2 Class A: 'AAAsf' Class B: 'AAAsf' Class C: 'A+sf' Class D: 'A+sf' Class E: 'Asf' USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. 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 transactions closing, Fitch sought to receive a third-party assessment conducted on the asset portfolio information, but none was available for these transactions. 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. UK COMMUNIIITY 1: Grant Thornton Named as Administrators -------------------------------------------------------- UK Communiiity Homes Impact 1 Ltd was placed into administration proceedings in the High Court Of Justice, Business And Property Court, No 005558 of 2025, and Christopher J Petts and James E Hichens of Grant Thornton UK Advisory & Tax LLP were appointed as administrators on Aug. 20, 2025. UK Communiiity Homes engaged in the buying and selling of own real estate. Its registered office is c/o Grant Thornton UK Advisory & Tax LLP, 11th Floor, Landmark St Peter's Square, 1 Oxford St, Manchester, M1 4PB Its principal trading address is at Park View Guesthouse, 9 - 11 Tennyson Avenue, Bridlington, YO15 2EU The joint administrators can be reached at: Christopher J Petts Grant Thornton UK Advisory & Tax LLP Grant Thornton – 1103a 11th Floor - Bank House, Pilgrim Street Newcastle-Upon-Tyne, NE1 6SQ -- and -- James E Hichens Grant Thornton UK Advisory & Tax LLP No 1 Whitehall Riverside Whitehall Road, Leeds, LS1 4BN Telephone: 0113 245 5514 For further details, contact: CMU Support Grant Thornton UK Advisory & Tax LLP Grant Thornton – 1103a 11th Floor - Bank House Pilgrim Street Newcastle-Upon-Tyne NE1 6SQ Tel No: 0161 953 6906 Email: cmusupport@uk.gt.com VENATOR MATERIALS: S&P Downgrades ICR to 'D' Then Withdraws Rating ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.K.-based titanium dioxide and pigments producer Venator Materials PLC to 'D' from 'CCC', its long-term issue rating on the company's $200 million first-out term loan due 2026 to 'D' from 'B-', and its issue-level rating on Venator's $175 million initial term loan due 2028 to 'D' from 'CCC-'. S&P subsequently withdrew its ratings on Venator, owing to lack of information that would allow S&P to maintain its surveillance. On Sept. 2, 2025, Venator announced it had appointed administrators who, together with the Venator leadership team, would be working to progress the sale of the U.K. businesses operating from Greatham, Wynyard, and Birtley. The other entities across the group remain under the governance of their respective boards and additional sale processes may be under way. The downgrade follows the announcement by Venator that it has appointed administrators who will progress the sale of its U.K. operations. As part of the administration process, the other entities across the group are under the governance of their respective boards and additional sale processes may be under way. S&P assumes that all payments have stopped and the company will not pay cash interest in October on its $175 million initial term loan due 2028. While the debt facilities are in place, the company is potentially in breach of affirmative and negative covenants. The withdrawal of all the ratings follows the lack of sufficient information from Venator that would allow S&P to maintain ongoing surveillance in accordance with its standards, including audited financial statements. Venator is therefore no longer under surveillance by S & P Global Ratings. VODAFONE GROUP: Fitch Assigns BB+ Rating on Sub. Hybrid Securities ------------------------------------------------------------------ Fitch Ratings has assigned Vodafone Group Plc's (BBB/Positive) EUR700 million 4.125% and EUR700 million 4.625% subordinated hybrid securities, both due in 2055, a rating of 'BB+'. The hybrid securities are subordinated to Vodafone's senior unsecured bonds, and rank senior to Vodafone's ordinary share capital and junior obligations - including all outstanding hybrids. Coupon payments can be deferred at the discretion of the company. The 'BB+' rating is, therefore, two notches below its Long-Term Issuer Default Rating (IDR), which reflects the securities' increased loss severity and heightened risk of non-performance relative to senior obligations. This approach is in accordance with Fitch's criteria, "Corporate Hybrids Treatment and Notching Criteria",. Vodafone's IDR of 'BBB' reflects its scale, strong operational footprint across Europe, the Middle East and Africa, strong competitive positions and healthy financial profile. The Positive Outlook reflects the potential for medium-term operational improvement in core markets, improving organic free cash flow (FCF) generation and reducing cash flow leverage through debt reduction. Key Rating Drivers 50% Equity Credit: The securities qualify for 50% equity credit as they meet Fitch's criteria for subordination, with full discretion to defer coupons for at least five years and limited events of default, the absence of material covenants and look-back provisions, and a long-dated effective maturity. Effective Maturity: There will be a coupon step-up of 25bp between years 11 and 12 and an additional step-up of 75bp 26-27 years after the issue date. The step-up dates are not treated as effective maturity dates under Fitch's criteria due to the cumulative amount of the step-ups being lower or equal to 1%. The documentation includes non-binding, intention-based replacement language that supports its permanence assessment of the hybrid instruments. The hybrids will be used to fund the refinancing of the company's EUR1 billion and USD500 million hybrid securities, which have their first call dates in 2026. Coupon Deferrals: Vodafone has full discretion to unilaterally defer coupon payments, which would be cumulative and compounding, with the company obliged to make a mandatory settlement of deferred interest payments under certain circumstances, including the winding-up of the five-year period from the earliest Interest Payment Date on which any Deferred Interest Payment forming part of the outstanding Arrears of Interest was scheduled to be paid. Comfortable Leverage: Vodafone has healthy leverage headroom. Fitch's latest base case forecasts envisage broadly stable EBITDA net leverage below its 3.0x positive sensitivity for the rating. German Operating Challenges: Vodafone reported a 3.2% decline in organic service revenue in its German subsector in 1QFY26 due to the customer base decline, including the impact of the end of bulk TV contracting in multi-dwelling units. However, Fitch expects investments in the network and customer services, combined with the long-term national roaming agreement with 1&1, will support a gradual improvement in revenues and EBITDA in FY27-FY28. Vodafone-Three Merger Completed: The merger with Hutchison's Three in the UK completed in June 2025 has sound industrial rationale. Fitch expects this move to greatly enhance Vodafone's performance in the UK, positioning it as a leading market participant. Fitch expects the financial benefits to be credit positive, although they may only be realised several years after the merger. Peer Analysis Vodafone's peer group includes large diversified European incumbent telecom operators, Deutsche Telekom AG, Orange S.A. (both BBB+/Stable) and Telefonica SA (BBB/Stable), and incumbents with more limited scale, such as BT Group plc and Royal KPN N.V. (both BBB/Stable). Compared with the large incumbent 'BBB+' rated peers, Vodafone retains a well-diversified portfolio of international businesses, with strong geographic scope and growth potential, although lower than some peers. The company is well-positioned for its 'BBB' rating. Positive rating action would depend on improved operational performance in core markets resulting in FCF growth. It has demonstrated a commitment to debt reduction and EBITDA leverage is conservative for the rating. Vodafone's scale and diversification provide strategic options not available to smaller operators, as reflected in its slightly looser leverage thresholds. Key Assumptions - Annual revenue growth of around 1%-2% in FY27-FY29 on a pro-forma basis (including Three UK) - EBITDA margin after leases of 28%-29% between FY26 and FY29 - Recurring restructuring costs at EUR400 million-600 million a year to FY29 - Capex (excluding spectrum payments) remaining broadly about 17% of sales a year to FY28 - Dividends to remain relatively flat in FY26-FY28 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 3.5x on a sustained basis. - Pressure on FCF driven by EBITDA margin erosion, higher-than-expected capex and shareholder distributions, or major underperformance in main operating subsidiaries. - Portfolio restructuring weakening Vodafone's operating profile without a corresponding reduction in the company's leverage and its target. Fitch could revise the Outlook to Stable on: - Cash flow from operations less capex-to-gross debt trending sustainably below 6%. - Lack of stabilisation in main European markets, including Germany, with a negative impact on overall service revenue and margins. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA net leverage falling below 3.0x on a sustained basis. - Cash flow from operations less capex-to-gross debt trending sustainably towards 6%-8%. - Material improvement in operating metrics across Vodafone's main operating subsidiaries, leading to revenue and EBITDA growth and improvements in FCF generation on a sustained basis. Liquidity and Debt Structure Vodafone reported cash and cash equivalents of EUR8.6 billion (excluding cash collateral), highly liquid short-term investments of EUR5.3 billion and non-current investment in sovereign securities of EUR913 million at FYE25. The liquidity is also supported by EUR7.8 billion of revolving credit facilities (undrawn at FYE25). The combination is sufficient to cover debt maturities of around EUR10.6 billion over the next three years. The company has good access to debt markets and strong relationships with banks. Issuer Profile Vodafone is a UK-based multinational telecommunications company providing a full range of services across fixed line and mobile. The company operates across many countries in Europe and Africa. 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 ----------- ------ Vodafone Group Plc Subordinated LT BB+ New Rating ********* 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. 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