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251230.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 Tuesday, December 30, 2025, Vol. 26, No. 260 Headlines A L B A N I A PROCREDIT BANK SH.A: Fitch Withdraws 'b-' Viability Rating B E L G I U M ONTEX GROUP: S&P Alters Outlook to Stable, Affirms 'B+' ICR B O S N I A A N D H E R Z E G O V I N A PROCREDIT BANK SARAJEVO: Fitch Withdraws B+ Foreign Currency IDR F R A N C E ATOS SE: Fitch Affirms 'B-' LongTerm IDR, Alters Outlook to Pos. ELO SA: S&P Withdraws 'BB-' Long-Term Issuer Credit Rating G E R M A N Y STEPSTONE GROUP: Fitch Cuts LongTerm IDR to B, Outlook Stable I R E L A N D CVC CORDATUS XXXVII: S&P Assigns B- (sf) Rating to Class F Notes PALMER SQUARE 2024-1: S&P Assigns B- (sf) Rating to Cl. F-R Notes STANNAWAY PARK: S&P Assigns B- (sf) Rating to Class F Notes VICTORY STREET II: Fitch Puts 'B-sf' Final Rating to Class F Debt M A C E D O N I A PROCREDIT BANK SKOPJE: Fitch Withdraws 'bb-' Viability Rating P O L A N D SYNTHOS SA: S&P Affirms 'BB' Long-Term ICR on Agreement with Orlen S E R B I A PROCREDIT BANK BEOGRAD: Fitch Withdraws 'bb-' Viability Rating S P A I N ROMANSUR INVESTMENTS: Fitch Puts Final 'B' LT IDR, Outlook Stable S W E D E N SAMHALLSBYGGNADSBOLAGET I NORDEN: S&P Raises Long-Term ICR to 'CCC' U N I T E D K I N G D O M GRIFONAS FINANCE 1: Fitch Affirms B-sf Rating on Class C Notes LOVELACE 01: S&P Assigns B- (sf) Rating on Class F-Dfrd Notes LUDGATE FUNDING 2007-FF1: S&P Affirms 'BB+ (sf)' Rating on E Notes PROJECT GRAND: S&P Affirms 'B' Sr. Notes Rating, Outlook Now Neg. WOLSELEY GROUP: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable - - - - - ============= A L B A N I A ============= PROCREDIT BANK SH.A: Fitch Withdraws 'b-' Viability Rating ---------------------------------------------------------- Fitch Ratings has affirmed Albanian ProCredit Bank Sh.a.'s (PCBA) ratings, including its Long-Term Issuer Default Ratings (IDR) of 'BB+' Shareholder Support Rating (SSR) at 'bb+' and Viability Rating (VR) at 'b-', and simultaneously withdrawn them. The Outlooks on the Long-Term IDRs were Stable at the time of withdrawal. Fitch has withdrawn all of PCBA's ratings for commercial reasons. Fitch will no longer provide ratings or analytical coverage of the issuer. Key Rating Drivers PCBA's IDRs were driven by its SSR, which reflected Fitch's view of potential support from the bank's sole shareholder, ProCredit Holding AG (PCH; BBB/Stable). Support considerations included the strategic importance of south-eastern Europe to PCH, PCBA's strong integration within the group and a proven record of providing capital and liquidity support. The extent to which potential support from PCH could be factored into the bank's ratings was constrained by Fitch's view of Albanian country risks, in particular transfer and convertibility. Prior to withdrawal, PCBA's VR was constrained by the bank's small scale and narrow franchise and was therefore one notch below its 'b' implied VR. The VR also balanced prudent risk management, improved profitability and better-than-sector asset quality against a challenging Albanian operating environment. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Not applicable as the ratings have been withdrawn. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Not applicable as the ratings have been withdrawn. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Prior to withdrawal, PCBA's 'B' Short-Term IDRs were the only option mapping to their respective Long-Term IDRs. PCBA's Long-Term Foreign-Currency IDR (xgs) was driven by support from PCH. The Long-Term Local-Currency IDR (xgs) was in line with PCBA's Long-Term Foreign-Currency IDR (xgs). The Short-Term IDRs (xgs) were mapped to their respective Long-Term IDRs (xgs). OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Not applicable as the ratings have been withdrawn. RATING ACTIONS Rating Prior ------ ----- ProCredit Bank Sh.a. LT IDR BB+ Affirmed BB+ LT IDR WD Withdrawn ST IDR B Affirmed B ST IDR WD Withdrawn LC LT IDR BB+ Affirmed BB+ LC LT IDR WD Withdrawn LC ST IDR B Affirmed B LC ST IDR WD Withdrawn Viability b- Affirmed b- Viability WD Withdrawn LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) LC ST IDR (xgs) B(xgs) Affirmed B(xgs) LC LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) ST IDR (xgs) B(xgs) Affirmed B(xgs) Shareholder Support bb+ Affirmed bb+ LT IDR (xgs) WD Withdrawn Shareholder Support WD Withdrawn ST IDR (xgs) WD Withdrawn LC LT IDR (xgs) WD Withdrawn LC ST IDR (xgs) WD Withdrawn ============= B E L G I U M ============= ONTEX GROUP: S&P Alters Outlook to Stable, Affirms 'B+' ICR ----------------------------------------------------------- S&P Global Ratings revised its outlook on hygiene products manufacturer Ontex Group N.V. to stable from positive and affirmed its 'B+' long-term issuer credit and issue ratings on the company and its EUR400 million senior unsecured debt. The recovery rating on the debt remains '3'. S&P said, "The stable outlook reflects our expectation that Ontex will expand its organic sales 1%-2% from 2026 onward, mainly supported by new contract wins and volumes growth. This should enable EBITDA margins expansion toward 10%. Under our base-case scenario, we forecast Ontex to generate positive FOCF of EUR30 million in 2026, while S&P Global Ratings-adjusted debt to EBITDA should reduce and stay comfortably below 5.0x over the next 12 months." On Dec. 11 2025, hygiene products manufacturer Ontex Group N.V. revised downward its full-year 2025 guidance for the second time in 2025, reflecting weaker-than-expected sales volumes, particularly in baby care (about 40% of total business in terms of sales) and resulting in lower cash flow and higher leverage. S&P said, "We now expect S&P Global Ratings adjusted debt to EBITDA of about 5.2x – 5.4x and negative free operating cash flow (FOCF) of EUR30 million-EUR40 million, compared with our previous leverage expectations of 4.0x-4.5x and flat cash flow generation." S&P said, "At the same time, Ontex has announced a cost efficiency program targeting about EUR200 million of gross savings over the next three years; however, we see some execution risks and expect about EUR40 million restructuring and implementation costs over 2026-2028, which will weigh on EBITDA and FOCF. "For 2026 we remain cautious on the baby care market's recovery but expect moderate improvement in operating performance, supported by the ramp-up of new contracts in Europe and North America." The outlook revision follows Ontex's second profit warning for fiscal year 2025, amid accelerated softness in the baby care market. On Dec. 11, 2025, the company lowered its full-year guidance. It now assumes 4%-6% annual sales decline in its core markets, compared with its previous expectation of a 1%-3% decline (following its first profit warning in July 2025) and with its original 3%-5% growth forecast. At the same time, Ontex revised its profitability guidance, with adjusted EBITDA now at EUR175 million-EUR180 million, EUR25 million-EUR30 million below its previous guidance and EUR45 million-EUR50 million below its original expectations at the beginning of 2025. This implies negative free cash flow of about EUR35 million in 2025, and leverage (under Ontex's definition) of about 3.2x in 2025, up from 2.5x in 2024. S&P understands the latest guidance revision primarily reflects persistently challenging market conditions, particularly in baby care, due to declining birth rates in developed markets and intense promotional activity from branded players such as Essity AB (BBB+/Positive/A-2), Kimberly Clark Corp. (A/Negative/A-1), and Procter & Gamble Co. (AA-/Stable/A-1+). Although Ontex has gradually secured new contracts in Europe and North America, the volume contribution from these agreements has been lower than initially anticipated due to a general softness environment for the whole industry. S&P said, "We revised our base case and now expect reported revenue to decline by about 14% in 2025 (and about 4.0%-5.0% decline on a like-for-like basis). This is a material deviation from our previous base-case scenario, when we assumed a 4.0%-5.0% decline in 2025's top line, with organic growth in Ontex's core markets partially mitigating the negative effect of the change in consolidation perimeter. The weaker top line weighs on our forecast profitability and cash flow metrics. We now anticipate S&P Global Ratings-adjusted EBITDA margin of about 7.5% in 2025, 250-300 basis points (bps) below our previous base-case scenario, and that the company will fail to generate positive FOCF in 2025 (compared with our original forecast of EUR45 million-EUR55 million positive cash flow contribution). As a result, we now assume adjusted debt to EBITDA to remain in the 5.2x-5.4x range in 2025, versus our previous expectations of 3.0x-3.5x. "We expect moderate improvements in operating performance in 2026, but remain cautious around the development of the baby care market. Visibility on the pace of recovery in the baby care segment remains limited and constrains our confidence in the company's growth trajectory. We forecast revenue in 2026 of EUR1.79 billion-EUR1.8 billion assuming 1.0%-2.0% organic revenue growth, supported by volume growth in adult care and feminine care, as well as contribution from new contracts. However, this level of organic growth will not offset the negative consolidation effect coming from the exit from Brazil and Turkiye (occurred over the course of the second and third quarter 2025), which we exclude from our revenue calculation starting 2026. Still, we expect S&P Global Ratings-adjusted EBITDA margins to trend toward 10% in 2026, reflecting better absorption of fixed costs, delivery of cost savings from the restructuring of Ontex's Belgian operations, and the removal of the dilutive effect on profitability from emerging markets. This, combined capital expenditure (capex) of about EUR80 million in 2026 (down from EUR90 million-EUR95 million estimated for 2025) and broadly stable working capital, should support a return to positive FOCF over the next 12 months, which remains a key rating consideration. We anticipate Ontex's FOCF to remain near EUR30 million in 2026. The expanding profitability and positive FOCF generation, should translate into S&P Global Ratings-adjusted leverage declining toward 4.0x-4.5x. Still, we see significant sensitivity in our base-case scenario; a 100-bps deviation in S&P Global Ratings-adjusted EBITDA margins would result in leverage remaining close to 5.0x. "Ontex's EUR200 million cost efficiency program over 2026-2028 should support profitability, but execution risk remains given challenging market conditions. The program, announced in December 2025, is alongside continued efficiency gains in manufacturing and further procurement and logistics optimization. We understand the company plans to invest in its IT systems and streamlining its cost base. We expect these initiatives to result in EUR40 million implementation and restructuring costs over 2026-2028, which we view as operating in nature and therefore include in our adjusted EBITDA, in line with our methodology. We estimate Ontex will incur EUR15 million of these costs in 2026, with the remainder spread across 2027-2028. The company has a track record of executing optimization programs, with the restructuring of its Belgian operations in progress. However, we still see execution risk, given that the program will be implemented while the business remains exposed to subdued demand in baby care and heightened competition. The company's ability to deliver the targeted savings while maintaining operational stability will be an important factor in sustaining expected credit metric improvement. "The stable outlook reflects our expectation that Ontex will expand its organic sales by 1%-2% from 2026 onward, mainly supported by new contract wins and volumes growth. In that time, we estimate S&P Global Ratings-adjusted EBITDA margin ranging near 10%. Despite additional EUR40 million restructuring and implementation charges, we expect better absorption of fixed costs and materialization of cost savings to support EBITDA margins expansion. Under our base-case scenario, we forecast Ontex to generate FOCF of EUR30 million in 2026, while S&P Global Ratings-adjusted debt to EBITDA should stay comfortably below 5.0x. "We could lower our rating on Ontex if S&P Global Ratings-adjusted debt to surpasses 5.0x with no prospects of deleveraging or the company fails to generate positive FOCF. This scenario could stem from an inability to deliver on the business growth plan, with a decline in sales and profitability coupled with higher-than-expected restructuring costs. We could also lower the rating if the group were to follow a more aggressive approach with regards to discretionary spending via shareholder distributions or acquisitions. "We could consider a positive rating action if Ontex materially outperforms our base-case forecast. Under this scenario, we would see the group expanding its EBITDA margins and generating higher-than-expected FOCF, resulting in a track record of S&P Global Ratings-adjusted debt to EBITDA of 4.0x-4.5x and FOCF to debt approaching 10%." =========================================== B O S N I A A N D H E R Z E G O V I N A =========================================== PROCREDIT BANK SARAJEVO: Fitch Withdraws B+ Foreign Currency IDR ---------------------------------------------------------------- Fitch Ratings has affirmed ProCredit Bank d.d. Sarajevo's (PCBBiH) ratings, including its Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+', Shareholder Support Rating (SSR) at 'b+' and Viability Rating (VR) at 'b-', and simultaneously withdrawn them. At the time of withdrawal, the Outlooks were Stable. Fitch has withdrawn all of PCBBiH's ratings for commercial reasons. Fitch will no longer provide ratings or analytical coverage of PCBBiH. Key Rating Drivers Prior to their withdrawal, PCBBiH's IDRs were driven by its SSR, which reflected potential support from the bank's sole shareholder, ProCredit Holding AG (PCH; BBB/Stable). Support considerations included the strategic importance of south-eastern Europe to PCH, PCBBiH's strong integration within the group and a proven record of providing capital and liquidity support. The extent to which potential shareholder support could be factored into the bank's ratings was constrained by Fitch's view of Bosnian country risks, in particular transfer and convertibility. PCBBiH's Long-Term Local-Currency IDR was one notch above its Long-Term Foreign-Currency IDR and reflected a lower risk of restrictions on servicing LC obligations in case of systemic stress. Prior to the withdrawal, PCBBiH's VR was one notch below its implied VR and reflected its small scale and narrow franchise. The VR also balanced the bank's reasonable financial performance, prudent risk management and resilient asset quality against its only moderate record of profitable operations and a high-risk Bosnian operating environment. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Not applicable as the ratings have been withdrawn. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Not applicable as the ratings have been withdrawn. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Prior to withdrawal, PCBBiH's Short-Term IDRs of 'B' were the only option mapping to their respective Long-Term IDRs. The bank's IDRs (xgs) were driven by the parent's IDRs (xgs). However, the bank's Long-Term Foreign-Currency IDR (xgs) of 'B+(xgs)' remained constrained by country risks, at two notches below its parent's, limiting the extent to which shareholder support could be factored into PCBBiH's rating. The Short-Term IDRs (xgs) were mapped to the respective Long-Term IDRs (xgs). OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Not applicable as the ratings have been withdrawn. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. Public Ratings with Credit Linkage to other ratings Prior to the withdrawal, PCBBiH's IDRs and IDRs (xgs) were driven by support from PCH. RATING ACTIONS Rating Prior ------ ----- ProCredit Bank d.d. Sarajevo LT IDR B+ Affirmed B+ LT IDR WD Withdrawn ST IDR B Affirmed B ST IDR WD Withdrawn LC LT IDR BB- Affirmed BB- LC LT IDR WD Withdrawn LC ST IDR B Affirmed B LC ST IDR WD Withdrawn Viability b- Affirmed b- Viability WD Withdrawn =========== F R A N C E =========== ATOS SE: Fitch Affirms 'B-' LongTerm IDR, Alters Outlook to Pos. ---------------------------------------------------------------- Fitch Ratings has revised the Outlook on Atos SE's Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the rating at 'B-'. Atos's rating continues to reflect high Fitch-defined EBITDA leverage and a weak but improving Fitch-defined EBITDA margin. The rating also incorporates negative near-term Fitch-defined free cash flow (FCF) and material execution risk. Fitch said, "However, the Positive Outlook reflects our expectation that credit metrics could become in line with a 'B' rating by 2027. We forecast a sequential improvement in EBITDA margin and FCF enabling leverage to meaningfully reduce below 7.0x. We also expect interest cover including non-cash interest to rise above 2x. Liquidity remains strong to support restructuring efforts." Rating strengths include scale and market position, a diversified blue-chip customer base and provision of mission-critical IT services. However, AI capabilities could disrupt traditional IT managed-service business models. Key Rating Drivers Refreshed Plan: Atos is mid-way through its operational restructuring having set out a new plan focusing on cost reductions and productivity, billability and sales execution and investing in AI and automation. Reduced organisational complexity from the split into Atos (Services) and Eviden (Products) units and by geography should enable Atos to better serve customers while managing resources more efficiently and reducing duplication. These actions are crucial for maintaining competitiveness, but poor execution may yet lead to unforeseen costs and delays. Cost Savings: Fitch said, "Atos making progress in cost reductions amid a challenging sales environment and foreign exchange headwinds which contributed to a EUR450 million lower than expected revenue. We expect the EBITDA margin to improve to 4% in 2025 (pro forma for Advanced Computing) from 2.6% reported in 2024. Savings are primarily from rationalising loss-making contracts, particularly those with a project margin below 5%, and headcount reductions. We expect net headcount to have fallen by 14,000 to around 64,000 by year-end, although reductions in Germany and France will take longer to execute." Gradual EBITDA Improvement: Fitch said, "We expect EBITDA growth from a combination of additional efficiency savings, headcount reductions and country exits, and improved contract profitability. A couple of large loss-making contracts remain, although new contracts target a 26% project margin. We forecast an EBITDA margin of 6% in 2026 and 8% by 2028. This will help improve Atos's interest cover (including non-cash) to above 2x." Commercial Momentum: Fitch said, "We expect book-to-bill (BtB) and order entry, both of which are seasonal metrics, to improve on average next year. Atos expects significant sequential improvement in BtB in 4Q25 and 1Q26. It has secured several deals and renewals, with 14 multi-year deals signed as of 3Q25, including a EUR326 million contract with the European Commission." Deleveraging Anticipated: Fitch said, "We expect 2025 EBITDA leverage to marginally fall to 11x pro forma, from 12.6x in 2024, but still very high for the rating. However, we forecast leverage will decline to 7.8x in 2026 and 6.2x in 2027, below Fitch's upgrade sensitivity of 7.0x. We will focus on gross leverage until Atos reaches a stable cash management strategy. We expect Atos to prioritise improving credit metrics, reflecting its public commitment to reduce company-defined net leverage to below 1.5x by 2028." FCF Inflection in 2027: Fitch said, "We estimate 2025 negative FCF of about EUR475 million, including restructuring costs from the Genesis programme and other cash outflows such as onerous contracts and litigations. Most of the impact will be felt in 2025, with an additional EUR200 million across 2026-2027. Cash commitments remain sufficiently funded from Atos's strong liquidity. We also model a portion of recurring restructuring cash costs in EBITDA as part of normal operations. We expect working capital to be favourable in 2025-2026 due to declining revenue and improving payment terms. We forecast FCF will be marginally negative next year, before becoming positive in 2027." Moderate Barriers to Entry: The enterprise IT solutions industry is highly competitive, with many established providers of similar scale across the value chain. The industry benefits from the need for highly skilled talent and provision of critical infrastructure and services. However, Fitch believes AI could automate many processes and introduce new competitive pressures for incumbents. Atos will need to embed new technologies into service offerings in innovative ways to justify its pricing and value proposition to customers, which are also seeking AI-driven efficiencies. Scaled Operator, Industry Challenges: Atos remains a global player with a diversified revenue and customer base. However, profitability is constrained by its primary role as a managed service provider, which relies on extracting operating leverage for earnings scalability. Growing demand for hybrid cloud, digital services and cybersecurity and increased defence spending and regulatory risks provide opportunities for Atos to act as a one-stop-shop for its customers, leveraging economies of scale and scope, but it necessitates an effective commercial strategy. Divestment Plans: Atos has agreed to sell its Advanced Computing unit to the French state for an enterprise value of EUR410 million in 2026. Cash proceeds from the sale could support deleveraging if used for debt reduction. The sale does not change Fitch assessment of Atos's credit profile due to the unit's limited scale and volatile sales pipeline. Exits from several smaller, uncompetitive geographies, will also allow management to focus attention on core regions and capabilities. Potential for M&A: The company has expressed a desire to re-start bolt-on M&A from 2027, funded from internal cash. This may help speed up revenue recovery and add capabilities, but Fitch believes any M&A has to be executed in a disciplined manner with manageable integration risks. Peer Analysis Atos's businesses profile is comparable with those of other global IT services, systems integrators and consultancies. US peers comprise DXC Technology Company (DXC; BBB-/Stable), Kyndryl Holdings, Inc. (Kyndryl; BBB/Stable) and Hewlett Packard Enterprise Company (HPE; BBB+/Stable). Emerging markets peers include Tata Consultancy Services Limited (TCS; A/Stable), Wipro Limited (A-/Stable), and HCL Technologies Limited (HCL; A-/Stable). Atos's credit profile is weaker than those of higher rated investment-grade peers, which benefit from larger scale, stronger market positions, EBITDA margins in the mid-to-high teens and materially lower leverage. Atos has a strong position in Europe, particularly within the public sector and cybersecurity but globally, it is a challenger to industry leaders. Kyndryl, DXC and HPE have all been hit by a secular decline in legacy IT services, driven by the accelerated migration from on-premises to public cloud infrastructures, but are further progressed in the transition than Atos. Atos is likely to continue to face execution risks over the next three years as it transforms its business model, to align performance metrics more closely with industry peers. Atos's forecast leverage and profitability are broadly in line with those of 'B' category IT peers offering similar services, such as Clara.net Holdings Limited (B/Stable), Ainavda Parentco AB (Advania; B/Stable) and Engineering Ingegneria Informatica S.p.A (EII; B/Stable). In addition to high leverage, these peers have lower revenue, weaker or constrained market shares or service offerings. Fitch’s Key Rating-Case Assumptions Assumptions for revenue and EBITDA are on a pro forma basis, excluding the sale of the Advanced Computing division. - Total revenue to decline by 26% in 2025, 1% growth in 2026, followed by low single-digit growth in 2027-2028; this equates to growth of 3% CAGR over 2025-2028. - Fitch-defined EBITDA margin of 4% in 2025, before improving to 5.6% by 2026 and 8% in 2028. Fitch EBITDA is defined as pre-IFRS16 and after Fitch's assessment of recurring costs and expensed capitalised customer research and development costs. - Working-capital inflow of 2.5% of sales in 2025. Working capital to average -0.1% of sales in 2026-2028, with positive inflow also in 2026 and outflows thereafter reflecting revenue growth. - Capex averaging 3% of sales 2025-2028. The portion related to capitalised research and development costs on customer products is expensed in EBITDA and excluded from capex. - Non-recurring cash outflow of EUR545 million in 2025 and EUR200 million in 2026-2027. - EUR225 million inflow of cash proceeds from the sale of Advanced Computing in 2026. No further contingent cash proceeds included. - No shareholder remuneration. Recovery Analysis The recovery analysis assumes that Atos would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. Fitch estimates that the post-restructuring GC EBITDA, as defined by Fitch, would be around EUR400 million. Fitch would expect a default to come from a secular decline or a decline in revenue and EBITDA, following reputational damage or intense competitive pressure. An enterprise value (EV) multiple of 5.5x is applied to the GC EBITDA to calculate a post-reorganisation EV. The post-restructuring EBITDA accounts for Atos's scale, its customer and geographical diversification, and mission-critical services that support customer retention in several services. However, this is offset by a weaker-than-industry profitability and challenges stemming from secular trends in legacy IT services. Fitch said, "We have factored in 10% of administrative claims for bankruptcy and associated costs. This leads to a distressed EV of EUR1.98 billion." Fitch said, "Our waterfall analysis generates ranked recoveries for the first-lien senior secured notes (SSN) of 'BB-'/'RR1', for the 1.5-lien SSN of 'CCC+'/'RR5', and for the second-lien SSN of 'CCC'/'RR6'. We assume a full drawdown of Atos's EUR440 million revolving credit facility (RCF) on default. The RCF ranks equally with other first-lien secured debt." RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Increasingly negative FCF, reducing liquidity buffers after utilisation of committed facilities - Weak organic revenue growth and EBITDA margins or insufficient deleveraging resulting in EBITDA leverage above 8.5x (EBITDA net leverage above 7.5x) for an extended period - EBITDA interest coverage, including non-cash interest, consistently below 1.5x. Fitch could revise the Outlook to Stable on: - EBITDA leverage expected by Fitch to remain above 7.0x in 2027 - FCF expected by Fitch to be negative in 2027 - EBITDA interest coverage, including non-cash interest is below 2x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- FCF margin sustained above 1%, driven by improved operating cashflow and materially lower restructuring costs -- EBITDA leverage below 7.0x (EBITDA net leverage below 6.0x), on a sustained basis, supported by progress in Atos's turnaround strategy leading to an improved EBITDA margin in single digits -- EBITDA interest coverage, including non-cash interest, sustained above 2x Liquidity and Debt Structure Fitch forecasts average balance-sheet cash to remain above EUR900 million in 2025-2028, supported by an undrawn EUR440 million RCF. Balance sheet cash, excluding restricted cash, is likely to fall to around EUR1.1 billion from EUR1.5 billion in 2024. Operational restructuring, funded with cash, is likely to be largely complete by end-2026. Fitch expects Atos to manage its working capital organically in a disciplined manner, although Fitch believes it may engage in more structured working capital securitisation. In addition to the RCF, Atos will have EUR1.1 billion of first-lien SSN maturing in 2029, EUR1.6 billion of 1.5-lien SSN maturing in 2030 and EUR356 million of second-lien SSN maturing in 2031. The SSN and term loans feature bullet payments and cash and non-cash interest payments. The first maturity in 2029 provides Atos with time to improve its credit profile ahead of a refinancing. Issuer Profile Atos SE is a global IT services provider with expertise in digital transformation, cybersecurity and high-performance computing, cloud solutions, and digital workplace services. Atos serves various sectors such as manufacturing, healthcare, financial services, public sector, and telecommunications with a leading position in Europe. RATINGS ACTION Atos SE Rating Prior ------ ----- LT IDR B- Affirmed B- senior secured LT BB- Affirmed RR1 BB- Senior Secured 2nd Lien LT CCC+ Affirmed RR5 CCC+ Senior Secured 3rd Lien LT CCC Affirmed RR6 CCC ELO SA: S&P Withdraws 'BB-' Long-Term Issuer Credit Rating ---------------------------------------------------------- S&P Global Ratings withdrew its ratings on ELO SA, including its 'BB-' long-term issuer credit rating and its 'BB-' issue rating on its senior unsecured notes due January 2026, at the issuer's request. At the time of the withdrawal, the outlook on S&P's issuer credit rating was negative. ============= G E R M A N Y ============= STEPSTONE GROUP: Fitch Cuts LongTerm IDR to B, Outlook Stable ------------------------------------------------------------- Fitch Ratings has downgraded The Stepstone Group Holding GmbH's Long-Term Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Stable. Fitch has also downgraded The Stepstone Group Midco2 GmbH's and The Stepstone Group US Co-Borrower LLC's issuance rating to 'B+' from 'BB-'. The Recovery Rating is 'RR3'. The downgrade reflects Fitch's expectations that Stepstone's leverage will remain outside Fitch's thresholds for a 'B+' rating for a longer period than previously projected, following macro-induced revenue declines, higher than previously expected for 2025. Fitch said, "We anticipate revenues will recover over the next two years, although we expect this recovery to be more gradual and subject to some downside risks." Stepstone's rating strengths include a solid business profile and high EBITDA margins, owing to a flexible cost structure. The Stable Outlook reflects Fitch's expectation that Stepstone will maintain sufficient operational and financial flexibility to navigate even a weak operating environment, underpinned by its established market positions and ongoing cost control measures. Evolution and resilience of the business model, coupled with continuing positive free cash flow (FCF) generation, could support a future upgrade. Key Rating Drivers High Leverage, Weak Coverage: Fitch forecasts EBITDA leverage to rise to 6.7x at end-2025 from 6.1x in 2024. We believe that on a through-the-cycle basis, Fitch-defined EBITDA leverage will remain within thresholds that are commensurate with a 'B' IDR over the next two years. We further expect EBITDA interest coverage to remain weak at below 2.5x until the end of 2027. The timing and extent of recovery are uncertain, but we currently expect credit metrics to gradually improve over 2026. Fitch said, "We believe the group will maintain financial discipline and seek to deleverage. Our forecast assumes no major M&A in the near term." Sluggish Revenues, Solid Margins: Fitch expects reduced hiring levels to lead to a 16% decline in revenues by end-2025, with Germany accounting for most of the decline. This will be partially offset by growth in North America, driven by the performance of the company's Appcast product. In 2026, Fitch projects global revenues to increase by 4%, supported by continued growth in North America and low-single-digit growth in EMEA. EBITDA margins have remained robust, with Fitch forecasting margins to increase to 36.6% by end-2025, up from 35.5% at end-2024, reflecting portfolio optimisation and strategic cost reductions. Fitch expects margins to be sustained at healthy levels for the rating over the next two years. Positive FCF: Fitch expects the Fitch-defined FCF margin to decline to 2-3% in 2026 compared with 15% at end-2024. Sustained EBITDA margins will support FCF, but this will be offset by costs for restructuring the business, servicing higher interest expense and funding continued investment in Stepstone's technology platform to enhance service offerings and competitive positioning. Exposure to Cyclicality: The deterioration in Stepstone's credit profile is attributed to the cyclical impact on job listings, due to dependence on job and hiring trends that correlate with the overall economy. The current hiring environment is characterised by stagnation and caution. Job postings remain above pre-pandemic levels in some sectors, but overall hiring rates are down compared with previous years, and the labour market is in a "no-hire, no-fire" state. Job Vacancies Relatively Low: At September 2025, there were approximately 615,000 job vacancies adjusted for seasonal effects in Germany, the lowest since February 2021. November 2025 data from the Bundesagentur für Arbeit shows about 625,000 vacancies, with the vacancy rate at 2.4%. This reflects a reduction from 671,000 vacancies at December 2024, marking a 7% annual decline. The decrease is largely attributed to economic uncertainty, weaker international demand, and rising costs. Downside Risk: Fitch projects Germany will experience a moderate economic recovery in 2026 and 2027, with fiscal stimulus and structural reforms supporting growth. Eurozone employment growth slowed to 0.1% qoq in 3Q25 and to 0.5% yoy. Fitch expects the annualised pace of employment growth to accelerate in 2026, driven by an improvement in Germany. We expect a slow uptick in hiring volumes in Germany in 2026, but a prolongation of the current cycle cannot be ruled out and represents a downside risk. Fitch expects economic disruptions to continue to affect some of Stepstone's other markets, such as the UK, throughout 2026. Sustainable Business Model: Stepstone is the leader in its core market, Germany, with an estimated 39% market share and a robust presence across EMEA and North America. Key competitors include established job portals and professional networking sites, but market share remains high due to brand recognition, and long-term relationships. Diversification in North America (contributing to around 25% on a reduced scale) is offsetting some of the impact of declines in EMEA. If successful, the company's transition to a subscription model will further enhance revenue visibility and strengthen customer retention. Technological Risk: Stepstone has been able to maintain high retention levels through 2025. However, the company is exposed to significant technological risk due to the rapid evolution of digital recruitment platforms. The company faces ongoing pressure to innovate and enhance its technology offering to stay competitive. Failure to keep pace with technological advancements, including developments in artificial intelligence, automation, and data analytics, could erode Stepstone's market position. Peer Analysis Stepstone's key competitors include Indeed, a global leader in online recruitment with extensive reach and robust search algorithms. Similarly, LinkedIn, with a blend of professional networking and job listings, is larger or more geographically diversified than Stepstone. Stepstone has maintained a strong market share in Germany as well as in its other main geographies. Stepstone's closest Fitch-rated peer in EMEA is Speedster Bidco GmbH (AutoScout24; B/Stable). AutoScout24 is one of the leading European digital automotive classifieds platforms that offers listing platforms for used and new cars, motorcycles and commercial vehicles to dealers and private sellers. AutoScout24 operates in a potentially less cyclical end-market than Stepstone and generates much higher EBITDA margins. However, it has higher leverage and weaker cash flow generation potential because of significant interest costs. Aviv Group GmbH (B+/Stable), a leading real estate classified company, generates similar EBITDA margins and has similar current gross leverage. However, Aviv's end markets are less cyclical and it has lower deleveraging capacity than Stepstone, which has bigger scale and better geographic diversification. ZipRecruiter, Inc (B/Negative) operates a similar business model as Stepstone's but it has smaller scale, less diversification, a weaker market position, and lower EBITDA margins though the company maintains much lower leverage than Stepstone in normalised years. Fitch also compares Stepstone with recruitment firms such as Auxey Midco Limited (AMS; B/Stable). AMS operates in the HR outsourcing sector but is limited by scale and market position, which is reflected in its tighter thresholds than Stepstone's. Fitch's Key Rating-Case Assumptions - 16% revenue decline in 2025 and mid-single-digit growth in 2026 and 2027 with gradual recovery in job listings - Fitch-defined EBITDA margins at 36%-39% in 2025-2028 - Working-capital outflows annually of EUR10-30 million - Capex at 7% of revenue until 2028 - No dividend payments for 2025-2028 - Small bolt-on acquisitions but no large M&A - No dividends assumed - Fitch treats holdco payment-in-kind raised at the Traviata B.V. level as non-debt of Stepstone due to its subordination features, interest payment structure and longer-dated maturity Recovery Analysis Fitch said, "We assume Stepstone would be considered a going-concern (GC) in bankruptcy and would be reorganised rather than liquidated. This is underscored by the group's immaterial tangible asset base, online platform, and existing user base of job seekers and employers. These features make Stepstone, in the event of financial distress, a natural target for other recruitment platforms looking to expand market share and recruitment agencies capable of benefiting from synergies out of its integration. "We have assumed a 10% administrative claim in the recovery analysis. "In our bespoke GC recovery analysis, we estimate post-restructuring GC EBITDA available to creditors of around EUR230 million, reflecting limited growth, a cyclical downturn and higher competitive intensity leading to lower margins. At this GC EBITDA, we expect the group to generate neutral to mildly negative FCF and its capital structure to be unsustainable. "We have used a distressed enterprise multiple of 6.0x. "These assumptions lead to an instrument rating of 'B+', one notch above the IDR, consistent with a Recovery Rating of 'RR3'. The capital structure includes senior secured debt of EUR1,350 million and USD598.5 million including an equally ranking revolving credit facility (RCF) of EUR300 million, assumed fully drawn in a default scenario." RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Negative FCF generation - EBITDA interest cover below 2.0x on a sustained basis - Pressure on EBITDA margins due to resumption of costs to boost growth or pricing pressure in a competitive environment that keep Fitch-defined EBITDA leverage above 6.8x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA interest cover above 3.0x on a sustained basis - FCF margin consistently above 5% - Fitch-defined EBITDA leverage below 5.5x through the cycle on a sustained basis, reflecting some commitment to a financial policy that aligns with creditors' interests and lower leverage Liquidity and Debt Structure Fitch expects Stepstone to maintain adequate liquidity until 2028. Fitch projects the company will have approximately EUR50 million in cash at end-2025. At quarter end-September 2025, Stepstone had full access to a EUR300 million RCF, which includes a EUR24 million ancillary facility. Fitch expects Stepstone to generate positive FCF margins above 3% in 2026-2028, which will support ongoing liquidity. There are no significant near-term debt maturities. We expect these resources to be sufficient to fund seasonal working capital, capex requirements and ongoing cost streamlining efforts. Issuer Profile Stepstone operates online recruitment platforms, primarily in Europe, and provides job-search related services including placement of job advertisements, programmatic recruitment as well as employer branding services. RATINGS ACTION Rating Prior ------ ----- The Stepstone Group Holding GmbH LT IDR B Downgrade B+ The Stepstone Group US Co-Borrower LLC senior secured LT B+ Downgrade RR3 BB- The Stepstone Group MidCo 2 GmbH senior secured LT B+ Downgrade RR3 BB- ============= I R E L A N D ============= CVC CORDATUS XXXVII: S&P Assigns B- (sf) Rating to Class F Notes ---------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to CVC Cordatus Loan Fund XXXVII DAC's class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated notes. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which consists primarily of 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 2,845.28 Default rate dispersion 395.79 Weighted-average life (years) 5.19 Obligor diversity measure 127.52 Industry diversity measure 25.89 Regional diversity measure 1.38 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.50 Target 'AAA' weighted-average recovery (%) 36.31 Target weighted-average spread (%) 3.64 Target weighted-average coupon (%) 5.07 Liquidity facility This transaction has a EUR1.0 million liquidity facility, provided by The Bank of New York Mellon, with a maximum commitment period of four years and an option to extend for a further 24 months (12-month rolling). The margin on the facility is 2.50% and drawdowns are limited to the amount of accrued but unpaid interest on collateral debt obligations. The liquidity facility is repaid using interest proceeds in a senior position of the waterfall or repaid directly from the interest account on a business day earlier than the payment date. For its cash flow analysis, S&P assumes that the liquidity facility is fully drawn throughout the six-year period and that the amount is repaid just before the coverage tests breach. Rating rationale Under the transaction documents, the rated notes 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 4.5 years after closing. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR400 million target par amount, the covenanted weighted-average spread (3.55%), the covenanted weighted-average coupon (4.50%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all rating levels. 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. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "Until the end of the reinvestment period on June 23, 2030, the collateral manager may substitute assets in the portfolio for so 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 it 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. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "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 rating levels than those we have 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 assigned to the notes. "For the class F 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 notes reflects several key factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have 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 23.89% (for a portfolio with a weighted-average life of 5.19 years), versus if we were to consider a long-term sustainable default rate of 3.2% for 5.19 years, which would result in a target default rate of 16.61%. -- 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 notes is commensurate with the assigned 'B- (sf)' rating. "Taking the above factors into account and following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that the assigned ratings are commensurate with the available credit enhancement for all the rated classes of notes. "In addition to our standard analysis, to provide an indication of how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A 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 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." The transaction securitizes a portfolio of primarily senior secured leveraged loans and bonds and is managed by CVC Credit Partners Investment Management Ltd. Ratings Amount Credit Class Rating* (mil. EUR) Interest rate (%) enhancement (%) A AAA (sf) 248.00 3/6-month EURIBOR + 1.29 38.00 B AA (sf) 44.00 3/6-month EURIBOR + 1.90 27.00 C A (sf) 24.00 3/6-month EURIBOR + 2.15 21.00 D BBB- (sf) 28.00 3/6-month EURIBOR + 2.90 14.00 E BB- (sf) 18.00 3/6-month EURIBOR + 5.40 9.50 F B- (sf) 13.00 3/6-month EURIBOR + 8.40 6.25 Sub NR 29.10 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. NR--Not rated. N/A--Not applicable. EURIBOR--Euro Interbank Offered Rate. PALMER SQUARE 2024-1: S&P Assigns B- (sf) Rating to Cl. F-R Notes ----------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Palmer Square European CLO 2024-1 DAC's class A Loan and class A-R, B-R, C-R, D-R, E-R, and F-R notes. The issuer also has unrated subordinated notes outstanding from the original transaction. This transaction is a reset of the already existing transaction. The existing classes of notes and loan were fully redeemed with the proceeds from the issuance of the replacement notes and loan on the reset date. The ratings on the original notes and loan have been withdrawn. Under the transaction documents, the rated notes and loan will pay quarterly interest unless there is a frequency switch event. Following this, the notes and loan will switch to semiannual payment. The transaction has a 1.55 years noncall period and the portfolio's reinvestment period will end 4.56 years after closing. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes 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 our counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,572.25 Default rate dispersion 628.15 Weighted-average life (years) 4.69 Obligor diversity measure 174.73 Industry diversity measure 22.95 Regional diversity measure 1.41 Transaction key metrics Total par amount (mil. EUR) 400.00 Number of performing obligors 205 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.41 'AAA' weighted-average recovery (%) 36.21 Targeted weighted-average spread (%) 3.51 Targeted weighted-average coupon (%) 2.81 Rating rationale S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. We consider that the portfolio primarily comprises broadly syndicated speculative-grade senior secured term loans and senior secured 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 used the EUR400 million par amount, the covenanted weighted-average spread of 3.30%, the Targeted weighted-average coupon of 2.81%, and the targeted weighted-average recovery rates at all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is limited at the assigned ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "The transaction's legal structure is bankruptcy remote, in line with our legal criteria. "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 loan and class A-R to F-R notes. "Our credit and cash flow analysis indicate that the available credit enhancement for the class B-R to E-R notes could withstand stresses commensurate with higher rating levels than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that the ratings assigned are commensurate with the available credit enhancement for all 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 have also included the sensitivity of the ratings on the class A Loan and 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." Palmer Square European CLO 2024-1 is a European cash flow CLO securitization of a revolving pool, comprising primarily euro-denominated senior secured loans and bonds. Palmer Square Europe Capital Management LLC manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A-R AAA (sf) 164.5 38.00 3-month EURIBOR plus 1.28% A Loan AAA (sf) 83.5 38.00 3-month EURIBOR plus 1.28% B-R AA (sf) 45.0 26.75 3-month EURIBOR plus 1.90% C-R A (sf) 23.0 21.00 3-month EURIBOR plus 2.20% D-R BBB- (sf) 28.0 14.00 3-month EURIBOR plus 3.15% E-R BB- (sf) 17.5 9.63 3-month EURIBOR plus 5.20% F-R B- (sf) 12.5 6.50 3-month EURIBOR plus 8.25% Sub notes NR 42.2 N/A N/A *The ratings assigned to the class A Loan and 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. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. STANNAWAY PARK: S&P Assigns B- (sf) Rating to Class F Notes ----------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Stannaway Park CLO DAC's class A-1 and A-2 loans and class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated notes. The ratings assigned to Stannaway Park CLO DAC's debt 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 loans 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 2,859.33 Default rate dispersion 462.54 Weighted-average life (years) 4.67 Obligor diversity measure 163.17 Industry diversity measure 23.17 Regional diversity measure 1.34 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.75 Target 'AAA' weighted-average recovery (%) 35.75 Target weighted-average spread (net of floors, %) 3.71 Target weighted-average coupon (%) 6.25 Rationale Under the transaction documents, the rated notes and loans will pay quarterly interest unless a frequency switch event occurs. Following this, the notes and loans will switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.67 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 its criteria for corporate cash flow CDOs. The transaction includes an amortizing reinvestment target par amount, which is a predetermined reduction in the value of the transaction's target par amount unrelated to the principal payments on the notes and loans. This may allow for the principal proceeds to be characterized as interest proceeds when the collateral par exceeds this amount, subject to a limit, and affect the reinvestment criteria, among others. This feature allows some excess par to be released to equity during benign times, which may lead to a reduction in the amount of losses that the transaction can sustain during an economic downturn. Hence, in S&P's cash flow analysis, it assumed a starting collateral size of less than target par (i.e., the EUR400 million target par minus the EUR4 million maximum reinvestment target par adjustment amount). S&P said, "In our cash flow analysis, we also modeled the covenanted weighted-average spread (3.50%), the covenanted weighted-average coupon (4.50%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all classes of notes and loans. 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 July 23, 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 loans. 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 Blackstone Ireland Ltd., 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 assigned ratings are commensurate with the available credit enhancement for the class A-1 and A-2 loans and the class A, D, and F notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B and C 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 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 notes reflects several key factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have 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 23.42% (for a portfolio with a weighted-average life of 4.67 years), versus if we were to consider a long-term sustainable default rate of 3.2% for five years, which would result in a target default rate of 14.94%. -- S&P said not believe that there is a one-in-two chance of this note defaulting. -- S&P said 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 notes is commensurate with the assigned 'B- (sf)' rating. "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 loans. "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 and A-2 loans and 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 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." Stannaway Park CLO 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 managed by Blackstone Ireland Ltd. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 57.40 38.00 Three/six-month EURIBOR plus 1.27% A-1 Loan AAA (sf) 90.60 38.00 Three/six-month EURIBOR plus 1.27% A-2 Loan AAA (sf) 100.00 38.00 Three/six-month EURIBOR plus 1.27% B AA (sf) 44.00 27.00 Three/six month EURIBOR plus 1.90% C A (sf) 24.00 21.00 Three/six month EURIBOR plus 2.10% D BBB- (sf) 29.00 13.75 Three/six month EURIBOR plus 2.90% E BB- (sf) 17.00 9.50 Three/six month EURIBOR plus 5.40% F B- (sf) 12.00 6.50 Three/six month EURIBOR plus 8.25% Sub notes NR 33.50 N/A N/A *The ratings assigned to the class A-1 and A-2 loans and 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. VICTORY STREET II: Fitch Puts 'B-sf' Final Rating to Class F Debt ----------------------------------------------------------------- Fitch Ratings has assigned Victory Street CLO II DAC final ratings. RATINGS ACTION Victory Street CLO II DAC Rating Prior ------ ----- Class A XS3213408902 LT AAAsf New Rating AAA(EXP)sf Class A-R LT AAAsf New Rating AAA(EXP)sf Class B XS3213409389 LT AAsf New Rating AA(EXP)sf Class C XS3213409546 LT Asf New Rating A(EXP)sf Class D XS3213409975 LT BBB-sf New Rating BBB-(EXP)sf Class E XS3213410122 LT BB-sf New Rating BB-(EXP)sf Class F XS3213410478 LT B-sf New Rating B-(EXP)sf Subordinated Notes XS3213410551 LT NRsf New Rating NR(EXP)sf Transaction Summary Victory Street CLO II DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. The portfolio has a target par of EUR350 million and is managed by CIC Private Debt SAS. The collateralised loan obligation (CLO) has a 4.6-year reinvestment period and an 8.5-year weighted average life test (WAL). KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B+'/'B'. The Fitch-calculated weighted average rating factor (WARF) of the identified portfolio is 22.9. 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 (WARR) of the identified portfolio is 61.6%. Diversified Portfolio (Positive): The transaction includes various concentration limits, including a top 10 obligor concentration limit at 20%, a maximum of 40% to the three-largest Fitch-defined industries and a fixed-rate asset limit of 5%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has an approximately 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. The transaction includes four Fitch test matrices, two effective at closing and another two effective one year after closing, subject to the aggregate collateral balance (defaults at Fitch collateral value) being at least at the reinvestment target par. The closing matrices correspond to an 8.5-year WAL covenant and the two forward matrices correspond to a 7.5-year WAL covenant. All the matrices are based on the same top 10 obligors limit and fixed-rate asset limits of 0% and 5%. 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 by the transaction after its reinvestment period. These conditions include passing the coverage tests and the Fitch 'CCC' bucket limitation test, and a WAL covenant that gradually steps down, before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) 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, lead to downgrades of one notch each on the class B to E 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 B to F notes each have a rating cushion of two notches due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to four notches for the class A to D notes 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 and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than- expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from a stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. ================= M A C E D O N I A ================= PROCREDIT BANK SKOPJE: Fitch Withdraws 'bb-' Viability Rating ------------------------------------------------------------- Fitch Ratings has affirmed ProCredit Bank AD Skopje's (PCBNM) ratings, including its Long-Term Issuer Default Rating (IDR) at 'BBB-', Shareholder Support Rating (SSR) at 'bbb-' and Viability Rating (VR) at 'bb-', and simultaneously withdrawn them. At the time of withdrawal, the Outlooks were Stable. Fitch has withdrawn PCBNM's ratings for commercial reasons. Fitch will no longer provide ratings or analytical coverage of PCBNM. Key Rating Drivers Prior to their withdrawal, PCBNM's IDRs were driven by its SSR, which reflected Fitch's view of potential support from the bank's sole shareholder, ProCredit Holding AG (PCH; BBB/Stable). PCBNM's SSR was one notch below PCH's Long-Term IDR and reflected our view that it is strategically important to PCH and an important part of its well-established presence in south-eastern Europe. PCBNM's Long-Term IDRs were in line with North Macedonia's Country Ceiling and reflected moderate country risks. The Stable Outlooks on PCBNM's Long-Term IDRs reflected those on both the North Macedonia's sovereign ratings and PCH's IDRs. Prior to its withdrawal, PCBNM's VR balanced its moderate domestic franchise, expertise in SME banking, prudent risk management and better-than-sector-average asset quality against North Macedonian operating environment risks. It also reflected PCBNM's improved structural profitability and adequate capitalisation and liquidity metrics. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Not applicable as the ratings have been withdrawn. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Not applicable as the ratings have been withdrawn. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Prior to withdrawal, PCBNM's Short-Term IDRs were the only option mapping to their respective Long-Term IDRs. PCBNM's Long-Term Foreign- and Local-Currency IDRs (xgs) were at the level of the bank's VR, and they were also underpinned by support from PCH. The Short-Term IDRs (xgs) were mapped to their respective Long-Term IDRs (xgs). OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Not applicable as the ratings have been withdrawn. Public Ratings with Credit Linkage to other ratings Prior to the withdrawal, PCBNM's IDRs and IDRs (xgs) were driven by support from PCH. RATING ACTIONS Rating Prior ------ ----- ProCredit Bank AD Skopje LT IDR BBB- Affirmed BBB- LT IDR WD Withdrawn ST IDR F3 Affirmed F3 ST IDR WD Withdrawn LC LT IDR BBB- Affirmed BBB- LC LT IDR WD Withdrawn LC ST IDR F3 Affirmed F3 LC ST IDR WD Withdrawn Viability bb- Affirmed bb- Viability WD Withdrawn LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) LC ST IDR (xgs) B(xgs) Affirmed B(xgs) LC LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) ST IDR (xgs) B(xgs) Affirmed B(xgs) Shareholder Support bbb- Affirmed bbb- LT IDR (xgs) WD Withdrawn Shareholder Support WD Withdrawn ST IDR (xgs) WD Withdrawn LC LT IDR (xgs) WD Withdrawn LC ST IDR (xgs) WD Withdrawn =========== P O L A N D =========== SYNTHOS SA: S&P Affirms 'BB' Long-Term ICR on Agreement with Orlen ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB' long-term issuer credit rating on Poland-based Synthos S.A. and its issue rating on its EUR600 million senior secured notes. The stable outlook reflects our expectation that the company's performance will improve in 2026 compared with 2025, supported by new product lines, improved mix, and some market improvement. S&P anticipates that debt to EBITDA will land at about 3.8x in 2025 and improve toward 3x or slightly below in 2026, which is commensurate with our rating. Synthos has disposed of its stake in butadiene subsidiary S54 to its partner Orlen for Polish zloty (PLN) 692 million and used the proceeds to fully repay its revolving credit facility (RCF) at end-December 2025 leading to lower debt. The debt repayment is a significant one-off credit positive despite Synthos' weak operating conditions in 2025, leading to about S&P Global Ratings-adjusted debt to EBITDA of about 3.8x, well within the 3x-4x we view as commensurate with the rating. However, this is higher than our early-year estimate of 3.3x, primarily due to the slower-than-expected recovery in the construction market affecting Synthos' insulation materials. S&P expects some EBITDA recovery in 2026, with lower capital expenditure (capex) helping return free operating cash flow (FOCF) to positive. S&P said, "Synthos disposed its stake in subsidiary S54 to its partner Orlen for PLN692 million, which we view as credit positive. A subsidiary (S54) was formed by Synthos to construct a new facility to produce butadiene at Orlen's site in Płock. Synthos handled the installation of the butadiene production unit, while Orlen developed a new olefin unit to produce CC4, which served as the feedstock for butadiene. However, due to delays from Orlen's side, no CC4 will be delivered before the end of 2029. Orlen acquired the stake of Synthos's subsidiary, leading to significant cash inflow in December 2025. Synthos used the proceeds in December 2025 to repay drawings under its RCF, which is now fully undrawn. This will decrease the net debt by about PLN657 million for financial year 2025, which allows S&P Global Ratings-adjusted debt to EBITDA to remain below 4.0x this year. Even if Synthos exits S54, it has already secured a substantial volume of butadiene, with production expected to commence in late 2029. We view the transaction as a significant credit positive for Synthos." Synthos' financial performance deteriorated further in the first nine months of 2025, as demand remains weak for insulation materials. Sales over this period fell by 4.2% year-on-year to PLN6,335 million (about EUR1,507 million), despite slightly improved volumes. The economic environment remains challenging due to the weakening automotive industry and depressed European construction market. S&P expects stable sales of rubber in 2025, despite the two-month turnaround in Schkopau in the third quarter and lower sales of emulsion styrene butadiene rubber, due to lower exports to Asia. EBITDA for the synthetic rubbers division improved significantly to PLN386 million over the first three quarters, thanks to margin improvement and strong export performance. S&P said, "We forecast another contraction of the sales in the insulation materials division in 2025, given the delayed recovery of the construction market. We expect the renovation market to mildly improve in 2026 before a potentially more material improvement in the new-build market in 2027 in Eastern Europe. As a result, we forecast the division to generate negative EBITDA in 2025, and to gradually recover in 2026 and 2027. We expect S&P Global Ratings-adjusted EBITDA to be about PLN713 million in 2025 and PLN900 million-PLN1,000 million in 2026, which translates into an EBITDA margin of approximately 8%-9% for the full year 2025, compared with 9.7% in 2024." S&P said, "We forecast that Synthos will generate positive FOCF in 2026. We project constrained FOCF in 2025 before improving to PLN350million-PLN400million in 2026. Capex will reduce to about PLN300million-PLN350 million in 2026, since the company has completed its growth projects focusing on increase of capacity of specialized products and gaining efficiency in the production of utilities. We expect a working capital outflow of about PLN150 million-PLN170 million in 2026 and PLN70 million-PLN90 million in 2027, mirroring gradual top-line recovery. We forecast about PLN120 million-PLN130 million of cash interest expenses, which is below our previous base case due to lower gross debt following the full RCF repayment. "We expect limited rating headroom in 2025 but forecast a gradual recovery in 2026 and 2027. S&P Global Ratings forecasts modest recovery in new-builds and renovation in the European construction sector from the second half of 2026, and the contribution of insulation materials to EBITDA should become positive again in 2026 following a negative contribution in 2025. We believe that the new capacity of grey expanded polystyrene (EPS) and the increase in sales of specialty products--especially functionalized solution styrene-butadiene rubber and neodymium polybutadiene rubber in the synthetic rubbers segment--should boost EBITDA in 2026. "We also factor in the two-month turnaround at the Schkopau plant in 2025, which occurs every five years, and should therefore not recur in 2026, allowing for higher production of solution styrene-butadiene rubber. We expect S&P Global Ratings-adjusted debt to EBITDA to remain elevated at about 3.8x in 2025, before decreasing to toward 3x or slightly below in 2026. Given that the EUR600 million bond matures in 2028, we see no refinancing risks over the next few years and view liquidity as adequate over the next 12 months. If leverage were to improve materially in 2026, we do not rule out that the company could resume dividend payments. "The stable outlook reflects our expectation that Synthos' performance will improve in 2026, supported by an increase in volumes as new lines become operational, improved product mix, and a mild improvement in market conditions. We anticipate that leverage will remain close to 4.0x in 2025 before improving toward 3x or slightly below in 2026. "We could lower the rating if Synthos' profitability and cash flow significantly weaken, leading to adjusted debt to EBITDA deteriorating to above 4x under low-cycle conditions, with no prospect for improvement. This could result from a material weakening of industry conditions, for example, a marked and prolonged drop in butadiene and styrene prices, or a material decline in rubber or polystyrene demand due to declining demand from the auto or construction sectors. Much higher-than-expected investments or shareholder distributions would also pressure the rating. "We do not currently envisage an upgrade, given the highly commoditized nature of Synthos' product portfolio, its large exposure to styrenics industry cycles, and the uncertainty surrounding its dividend policy. However, increased product and asset diversification, a strong commitment from the shareholder to maintain adjusted debt to EBITDA sustainably below 2.0x, and positive discretionary cash flow could lead to an upgrade." =========== S E R B I A =========== PROCREDIT BANK BEOGRAD: Fitch Withdraws 'bb-' Viability Rating -------------------------------------------------------------- Fitch Ratings has affirmed Serbian ProCredit Bank a.d. Beograd's (PCBS) ratings, including its Long-Term Issuer Default Rating (IDR) at 'BBB-', Shareholder Support Rating (SSR) at 'bbb-' and Viability Rating (VR) at 'bb-', and simultaneously withdrawn them. The Outlooks were Stable at the time of withdrawal. Fitch has chosen to withdraw the ratings of PCBS for commercial reasons. Fitch will no longer provide ratings or analytical coverage of the issuer. Key Rating Drivers Prior to withdrawal PCBS's IDRs were driven by its SSR, which reflected Fitch's view of potential support from the bank's sole shareholder, ProCredit Holding AG (PCH; BBB/Stable). PCBS's SSR was one notch below PCH's Long-Term IDR and reflected our view that it was strategically important to PCH and an important part of the group's well-established presence in south-eastern Europe. PCBS's Long-Term IDR was in line with Serbia's Country Ceiling and reflected only moderate country risks. The Stable Outlooks on PCBS's Long-Term IDRs reflected those on PCH's Long-Term IDRs. Prior to withdrawal PCBS's VR balanced the bank's modest domestic franchise, expertise in SME banking, reasonable profitability, capitalisation and prudent risk management against risks stemming from the Serbian operating environment. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Not applicable as the ratings have been withdrawn. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Not applicable as the ratings have been withdrawn. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Prior to withdrawal, PCBS's 'F3' Short-Term IDRs were the only option mapping to their respective Long-Term IDRs. PCBS's Long-Term Foreign- and Local-Currency IDRs (xgs) were at the level of the bank's VR, and they were also underpinned by support from PCH. The Short-Term IDRs (xgs) were mapped to their respective Long-Term IDRs (xgs). RATINGS ACTION Rating Prior ------ ----- ProCredit Bank a.d. Beograd LT IDR BBB- Affirmed BBB- LT IDR WD Withdrawn ST IDR F3 Affirmed F3 ST IDR WD Withdrawn LC LT IDR BBB- Affirmed BBB- LC LT IDR WD Withdrawn LC ST IDR F3 Affirmed F3 LC ST IDR WD Withdrawn Viability bb- Affirmed bb- Viability WD Withdrawn LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) LC ST IDR (xgs) B(xgs) Affirmed B(xgs) LC LT IDR (xgs) BB-(xgs) Affirmed BB-(xgs) ST IDR (xgs) B(xgs) Affirmed B(xgs) Shareholder Support bbb- Affirmed bbb- LT IDR (xgs) WD Withdrawn Shareholder Support WD Withdrawn ST IDR (xgs) WD Withdrawn LC LT IDR (xgs) WD Withdrawn LC ST IDR (xgs) WD Withdrawn ========= S P A I N ========= ROMANSUR INVESTMENTS: Fitch Puts Final 'B' LT IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned Romansur Investments SL (Donte) a final Long-Term Issuer Default Rating (IDR) of 'B' with a Stable Outlook. Fitch has also assigned its EUR520 million term loan B (TLB) a final secured instrument rating of 'B+', with a Recovery Rating of 'RR3'. Donte's ratings balance its leading position in the Spanish dental care market, robust EBITDA margins and free cash flow (FCF) generation, with relatively smaller scale than similarly rated healthcare providers and high but decreasing leverage. The Stable Outlook reflects our expectation of continued solid profitability resulting in strong FCF generation, driven by organic and inorganic growth of the business, leading to a steady deleveraging towards 5.0x by 2028. Key Rating Drivers Defensive Operations: Donte's rating is underpinned by its solid position as the largest private dental care provider in Spain. The company's strategy is to leverage economies of scale and standardisation of practices that increase brand awareness, resulting in profitable practices in the highly fragmented Spanish market. Fitch forecasts the company will grow organically in the low single digits to 2028, based on increased penetration of dental care services and demand for more complex treatments. High But Declining Leverage: Fitch said, "We expect Donte's EBITDAR leverage to be around 5.8x following the TLB issuance. We expect leverage to gradually reduce to below 5.0x by 2028, supported by EBITDA growth, indicating improved rating headroom as the company consolidates its operations across its multiple brands. EBITDAR fixed charge coverage of 2.0x-2.2x in our rating case is comfortable for the rating." Stable Regulation: Fitch said, "We view Donte's regulatory environment as relatively stable, with funding for dental care in Spain being almost fully private and out-of-pocket. This could expose the market to consumer spending power volatility, but growth has remained resilient due to increased awareness of dental care, and that necessary treatments may be delayed but are unlikely to be cancelled. We believe Donte has the capacity to implement retail and customer relationship management frameworks to patients by optimising price plans through its customer financing setup, creating relationships that are profitable in the long term for the company." Flexible Structure Underpins High Margins: Fitch said, "We forecast Donte's EBITDA margins to remain above 21% until 2028, improving from 17% in 2024, driven mainly by improved operating leverage, favourable treatment mix, and a more flexible cost structure. We expect continuous improvement in the existing clinics from the ramp-up of the MAEX and Moonz brands to be slightly offset by the integration of newly acquired and opened clinics." Positive FCF Drives M&A Strategy: Fitch said, "We expect Donte to generate positive FCF in the mid- to high-single digits, driven by modest working capital inflow and low capital intensity. We expect the company will use it to consolidate other smaller dental practices in Spain. The rating case assumes EUR120 million of acquisitions between 2025 and 2028, fully funded by internal cash generation. We expect Donte will execute this 'buy-and-build' strategy with strong discipline in asset selection and multiples paid, leading to enhancing its deleveraging prospects." Peer Analysis EMEA-based peers rated within the 'B' category tend to be constrained by weak credit metrics, with EBITDAR leverage averaging 6.0x-7.0x and tight EBITDAR fixed-charge cover metrics around 1.5x-2.0x. Their highly leveraged balance sheets often reflect aggressive financial policies focused on debt-funded acquisitions, as their strategies often involve consolidation of fragmented care markets and generating benefits from scale and standardised management structures, given the limited room for maximising organic returns. Fitch said, "We rate Donte at the same level as Swiss dental operator Colosseum Dental Finance BV (B/Stable), veterinary operator IVC Acquisition Midco Ltd (B/Stable), fertility clinic operator Inception Holdco S.a.r.l. (B/Stable), French hospital operator Almaviva Developpement (B/Stable), Finnish social care We rate it one notch below Germany hospital operator Schoen Klinik SE (B+/Stable) and one notch higher than Median B.V. (B-/Positive), a pan-European healthcare operator." Fitch said, "We compare Donte with diagnostic lab-testing companies including Ephios Subco 3 S.a.r.l. (Synlab, B/Stable), Inovie Group (B/Stable) and Laboratoire Eimer Selas (B/Stable). Lab-testing companies tolerate high leverage relative to their ratings due to strong operating and cash flow margins combined with non-cyclical revenue patterns, high visibility amid sector regulation, large business scale and wide geographic footprints." Fitch's Key Rating-Case Assumptions - Organic sales growth in the low to mid-single digits 2025-2028 - Fitch-estimated acquisitions of EUR22-EUR23 million in 2025-2026, followed by EUR75 million in 2027-2028 - EBITDA margin slightly above to 21.5% in 2025, up from 17% in 2024, on operating improvements, remaining at or above 21% to 2028. - Operating leases at 6.3% of sales in 2025, gradually declining to 6.15% given the operations expansion. Fitch adjusted-lease debt based on a 5.2x implied lease multiple in 2025-2028. - Capex at 6% of sales in 2025, gradually reducing to 4.4% by 2028. - No dividends until 2028 Recovery Analysis Fitch expects that in a bankruptcy Donte would most likely be sold or restructured as a going concern (GC) rather than liquidated. Fitch estimates a post-restructuring GC EBITDA at about EUR65 million. The GC EBITDA is based on a stressed scenario reflecting adverse regulatory changes, the company's inability to manage costs or retain dental practitioners leading to deteriorating quality of care. Fitch applies a distressed enterprise value/EBITDA multiple of 6.0x, in line with most healthcare providers that Fitch rates in EMEA, such as Colosseum, Inception Holdco, Almaviva and Median. After deducting 10% for administrative claims, the allocation of value in the liability waterfall results in a Recovery Rating of 'RR3' for the senior secured debt, comprising a EUR520 million TLB and a EUR100 million revolving credit facility (RCF). Fitch assumes the RCF to be fully drawn prior to distress. This indicates a 'B+' instrument rating, one notch above the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage above 6.5x on a consistent basis - EBITDAR fixed charge coverage consistently below 1.5x - Inability to contain costs due to underperformance, unsuccessful integration of new acquisitions, or adverse regulatory changes leading to EBITDA margin erosion towards 12% and FCF margins in the low-single digits. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage sustainably below 5.0x - FCF margins in the high-single digits on a consistent basis - Continued profitable growth that results in the FCF margin trending towards high-single digits and EBITDA trending towards EUR150 million Liquidity and Debt Structure Fitch expects Donte to have EUR36 million of unrestricted cash on balance sheet at end-2025 (Fitch adjusts EUR20 million for daily operations). Liquidity is strengthened by the full availability on its EUR100 million RCF and our expectation of positive FCF generation to 2028. The EUR520 million TLB matures in 2032, which in our view, lowers refinancing risk as it extends the maturity of its debt structure by four years. Issuer Profile Donte is the largest Spanish dental care provider. RATINGS ACTION Rating Prior ------ ----- Romansur Investments SL LT IDR B New Rating B(EXP) senior secured LT B+ New Rating RR3 B+(EXP) =========== S W E D E N =========== SAMHALLSBYGGNADSBOLAGET I NORDEN: S&P Raises Long-Term ICR to 'CCC' ------------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Swedish real estate company Samhallsbyggnadsbolaget i Norden AB (publ) (SBB) to 'CCC' from 'SD' (selective default), and its issue rating on the two affected senior unsecured bonds, issued by SBBH, to 'CCC' from 'D' (default). S&P affirmed its 'CCC' issue ratings on SBB's senior unsecured notes maturing in 2026, 2027, and October 2029. The recovery rating remains at '4'. S&P also affirmed at 'CC' the issue ratings on the instruments not included in the tender (related to the issuances under SBB and SBB Treasury Oyj). S&P affirmed its issue ratings on the three euro-denominated subordinated bonds at 'D'. The negative outlook reflects the risk of a conventional default or further distressed debt offers within the next 12 to 18 months if SBB does not secure sufficient funding sources. On Dec. 22, SBB and its fully controlled subsidiary Samhällsbyggnadsbolaget i Norden Holding AB (SBBH) completed a tender transaction at prices mostly below par, for a nominal amount repurchased of EUR438 million and a cash outflow of EUR386 million. SBB's capital structure remains unsustainable based on continued tight liquidity with significant short-term debt maturities over the next 12 to 18 months. S&P said, "In our view, SBB's ability to meet its future debt maturities depends upon favorable business, financial, and economic conditions. Its debt repayment-capacity may also rely on additional partial repurchases, which we could view as distressed. "We raised the issuer credit rating to 'CCC' from 'SD' following the tender transaction completion. SBB tendered nominally about EUR438 million in cash, related to its five issuances of senior unsecured notes due 2026 to 2029 under SBBH and its Swedish krona (SEK) floating-rate notes due 2027, issued by SBB. We understand that the average prices varied and for all notes were close to par for the notes maturing in 2026, 2027, and October 2029, but was much lower for the notes maturing in 2028 and September 2029, given the recent trading of the notes. We further understand that the settlement of the transaction has been concluded. "Our liquidity assessment for the company remains weak, given SBB continues to face significant debt maturities, totaling about Swedish krona (SEK)5.3 billion in 2026, and further around SEK7 billion of debt maturities in 2027. We anticipate that SBB will have around SEK4.2 billion of cash available, which is not sufficient to cover its needs, including short-term debt maturities and committed capital spending over the next 18 months. The issuer has not accessed the debt capital markets for a while, even though bond yields are below 7%. We think that SBB's capital structure will remain unsustainable over the short to medium term in light of ongoing operating cash burn and the reducing asset portfolio, until the company can demonstrate an improved liquidity position and sustain a stable capital structure. SBB's asset sales options are now more limited to reduce its leverage and managing the maturity wall, although it could also seek access to diversified funding sources. SBB has attracted some funding by selling equity stakes in several of its asset portfolios, for example, the recent Sveafastigheter transaction. However, with the recent disposals, SBB's property portfolio remains at a value of about SEK35 billion, which limits the flexibility for further significant asset sales to reduce leverage. We believe that a material deleveraging of the group remains challenging. "We maintained our 'D' rating on SBB's subordinated bonds because we expect SBB to continue deferring its related coupon payments for at least the next 12 months. Following management's intention to replace its hybrid capital with debt in 2024, we conclude SBB is no longer committed to retaining hybrid instruments as a long-standing part of its capital structure to absorb losses or conserve cash. Therefore, the hybrid instruments receive zero equity content under our methodology. The company started deferring coupon payments on its hybrids in July 2024 and we expect it to continued deferring them for at least the next 12 months. "The company has disposed of a large amount of assets over the past couple of years and its near-term operational strategy remains highly uncertain. The value of SBB's property portfolio declined to about SEK35 billion, expected at year-end 2025 from SEK135 billion at year-end 2022, due to its decentralized operational strategy and because it has been selling assets to secure liquidity and funding needs. We understand that SBB may carry out further asset sales throughout 2026, which could reduce rental cash flows, although we believe the company may be able to attract dividends from its equity stakes, which would benefit S&P Global Ratings-adjusted EBITDA. Given the lack of clarity regarding the company's mature portfolio and operations, as well as how to address upcoming debt maturities in 2026 and 2027, our rating will likely remain in the 'CCC' category after settlement of the tender. The negative outlook reflects the risk of a conventional default or further distressed debt offers within the next 12 months. S&P said, "We could lower the ratings on SBB if the company fails to secure sufficient funding for its short to medium term liquidity needs. "We could also downgrade SBB if additional unexpected events constrain SBB's credit profile or liquidity; or if SBB undertakes another tender offer or bond buyback that we consider distressed and tantamount to default. "We could raise the ratings on SBB if the company successfully refinances debt maturities and restores its liquidity headroom sustainably." =========================== U N I T E D K I N G D O M =========================== GRIFONAS FINANCE 1: Fitch Affirms B-sf Rating on Class C Notes -------------------------------------------------------------- Fitch Ratings has upgraded Grifonas Finance No. 1 Plc's class A and B notes and affirmed the class C notes. The rating action follows Fitch's periodic review of the transaction and factors in the upgrade of Greece's Long-Term Issuer Default Rating (IDR) by one notch to 'BBB'. Fitch maintains a six-notch differential between the sovereign IDR and the highest achievable structured finance (SF) ratings in Greece. RATINGS ACTION Grifonas Finance No. 1 Plc Rating Prior ------ ----- Class A XS0262719320 LT AAsf Upgrade AA-sf Class B XS0262719759 LT A+sf Upgrade Asf Class C XS0262720252 LT B-sf Affirmed B-sf Transaction Summary The transaction comprises fully amortising residential mortgages originated and serviced by Consignment Deposits & Loans Fund. KEY RATING DRIVERS Revised SF Cap for Greece: The rating actions consider the one-notch upgrade of the sovereign IDR and upward revision of the country cap for Greek SF transactions to 'AAsf'. Following the recalibration of asset assumptions up to 'AAsf', the class A notes are able to sustain stresses at the 'AAsf' SF rating cap. Stable Asset Performance; Increased CE: Asset performance has remained stable overall since the last review in April 2025, and Fitch expects this to continue, given the portfolio deleveraging. At the August 2025 payment date, cumulative defaults were 5.3% (unchanged since our last review). The notes are amortising sequentially and credit enhancement (CE) has built up since the last review to approximately 54%, 37% and 17% for the class A, B and C notes, respectively (from around 46%, 30% and 12% at the last review). The CE build-up has driven the upgrade of the class B notes. Data Discrepancy; Class C Notes Affirmed: Due to previous group loan substitutions, the servicer is unable to provide loan-by-loan data fully aligned with Fitch's data requirements. Fitch relies upon the investor report and has applied assumptions to the loan-by-loan to run its asset model (ResiGlobal). Fitch notes that the transaction has deleveraged and asset model results are driven by the portfolio loss floor. Fitch believes that the class C notes cannot achieve higher ratings until its data requirements are fully met. This is the reason for their affirmation, despite the build-up of CE since our previous review. Interest Payments and Liquidity Mechanism: Since February 2023, class C interest payments have been postponed to a more junior item in the waterfall following the cumulative default trigger breach (5.0%), to ensure additional protection for the class A and B notes. The structure also includes a facility that is non-amortising due to breached triggers and reduces the transaction's available funds, given the associated commitment fee paid on the committed facility amount. The facility costs are included in Fitch's cash flow analysis as senior expenses. Ratings Capped at 'AAsf': The class A notes' 'AAsf' rating is at the maximum achievable rating for Greek SF transactions, in accordance with Fitch's Structured Finance and Covered Bonds Country Risk Rating Criteria, six notches above Greece's Long-Term IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Insufficient CE to fully compensate the credit losses and cash flow stresses associated with the current rating scenario could lead to a downgrade of the notes. The class A notes are rated at the maximum achievable rating (i.e. six notches above the sovereign IDR), and any negative action on the sovereign IDR would trigger similar action. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The class A notes are rated at the highest achievable rating for SF transactions in Greece. An upgrade of Greece's Long-Term IDR could increase the maximum achievable rating for Greek SF transactions and lead to an upgrade of the class A notes, provided that credit enhancement was commensurate with higher rating stresses. The ratings of the class B and C notes may change if Fitch is provided with loan-by-loan data that perfectly matches its data requirements. LOVELACE 01: S&P Assigns B- (sf) Rating on Class F-Dfrd Notes ------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Lovelace 01 CBP PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd notes. At closing, the issuer issued unrated class Z and X notes, and residual certificates. This U.K. GBP442 million buy-to-let (BTL) RMBS transaction features a 24-month revolving period from closing, during which the issuer can purchase new loans, further advances, product switches and overdrafts subject to various conditions and eligibility criteria. The loans were originated by Cynergy Bank PLC (CB) between 2006 and 2025, with the majority (over 90%) being originated after 2022. The pool balance comprises commercial (26.80%) and mixed-use (22.88%) at the property level based on the current balance, with the remainder residential (50.32%) properties. This is the sixth transaction we have rated in the U.K. that securitizes small-ticket commercial mortgage loans and will be the first securitization from CB. Another key feature of the transaction is that the loans are originated with short original terms (the majority between two and five-year terms), with repayment structured as hard bullet maturities. CB can decide on whether to grant another term or not, depending on whether the borrower wants to stay or refinance elsewhere. Borrowers are also grouped into risk groups, which is not a typical feature of RMBS transactions. There can be several loans backed by one or more properties within one risk group. The risk can be shared within the risk group and there are different linkages between borrowers as a result of cross-collateralization and cross-guarantees. The class A and B-Dfrd notes (subject to conditions) benefit from a liquidity reserve fund. Principal can be used to pay senior fees and interest on the class A notes and B-Dfrd notes (subject to conditions). A setoff reserve fund is available to cover deposit setoff risks. S&P said, "There are no rating constraints in the transaction under our counterparty, operational risk, or structured finance sovereign risk criteria. We consider the issuer to be bankruptcy remote." Ratings Class Rating Amount (mil. GBP) A AAA (sf) 367.290 B-Dfrd AA- (sf) 39.827 C-Dfrd A (sf) 13.276 D-Dfrd BBB (sf) 8.850 E-Dfrd BB (sf) 4.425 F-Dfrd B- (sf) 4.425 Z NR 4.436 X NR 6.638 Residual Certificates NR N/A N/A--Not applicable. NR--Not rated. LUDGATE FUNDING 2007-FF1: S&P Affirms 'BB+ (sf)' Rating on E Notes ------------------------------------------------------------------ S&P Global Ratings affirmed its credit ratings in Ludgate Funding PLC's series 2006-FF1 and series 2007-FF1. Specifically: -- In series 2006-FF1 S&P affirmed its 'A+ (sf)' ratings on the class A2a, A2b, Ba, and Bb notes, its 'A (sf)' rating on the class C notes, 'A- (sf)' rating on the class D notes, and its 'BBB (sf)' rating on the class E notes. -- In series 2007-FF1, S&P affirmed its 'A+ (sf)' ratings on the class A2a, A2b, Ma, Mb, Bb, and Cb notes, its 'BBB+ (sf)' ratings on the class Da and Db notes, and its 'BB+ (sf)' rating on the class E notes. S&P has resolved the UCO placements of all classes of notes. S&P said, "The rating actions follow our analysis of the counterparty risk caps under our revised counterparty criteria and our credit and cash flow analysis of the most recent transaction information that we have received as of the September 2025 payment date." Performance has remained stable since our previous review. According to the September 2025 and October 2025 investor reports respectively, arrears are 11.51% in series 2006-FF1 and 12.62% in series 2007-FF1, and cumulative losses are 1.12% in series 2006-FF1 and 2.93% in series 2007-FF1. S&P said, "Our weighted-average foreclosure frequency (WAFF) and weighted-average loss severity (WALS) assumptions are shown in the table below. The increase in WAFF reflects a revised analytical approach regarding defaulted and past-maturity loans. Previously, these loans were treated as defaulted on day 1 and only given recovery credit. However, our current approach recognizes that loans past their maturity date or exhibiting significant arrears may not necessarily result in immediate repossession, particularly when demonstrating a consistently high repayment rate. Therefore, instead of applying the 100% WAFF adjustment to these loans, we are giving pay rate credit and applying a 5x adjustment to the WAFF, reflecting their reduced risk profile. "The WALS have remained relatively stable since our last review. However, considering the transactions' historical loss severity levels and the latest available data, the portfolios' underlying properties may have only partially benefited from rising house prices, and we have therefore applied a haircut to property valuations to reflect this. The WALS remains at the floor of 2% at the 'BBB', 'BB' and 'B' rating levels in series 2006-FF1 and at the 'BB' and 'B' rating levels in series 2007-FF1." Portfolio WAFF and WALS Rating level WAFF (%) WALS (%) Credit coverage (%) Series 2006 FF1 AAA 28.82 21.38 6.16 AA 24.09 14.40 3.47 A 21.61 4.53 0.98 BBB 16.60 2.00 0.33 BB 13.94 2.00 0.28 B 13.28 2.00 0.27 Series 2007-FF1 AAA 27.80 26.98 7.50 AA 23.16 20.24 4.69 A 20.73 9.20 1.91 BBB 16.98 4.21 0.72 BB 14.24 2.00 0.28 B 13.55 2.00 0.27 WAFF--Weighted-average foreclosure frequency. WALS--Weighted-average loss severity. The series 2006-FF1 reserve fund stood at GBP778,000 as of September 2025, which was below the target of GBP1.15 million and the series 2007-FF1 reserve fund stood at GBP1.44 million, below the GBP1.66 million target. Both reserve funds remain nonamortizing due to various trigger breaches per the transaction documents. The liquidity facilities currently stand at GBP5.61 million in series 2006-FF1 and GBP10.66 million in series 2007-FF1. The liquidity facilities are available to cover interest shortfalls on the notes, are undrawn, and also remain nonamortizing due to various trigger breaches per the transaction documents. Both transactions' structures switch between sequential and pro rata amortization, depending on various triggers. The series 2006-FF1 notes are currently amortizing sequentially due to the reserve fund not being at the required amount, whereas the series 2007-FF1 notes amortized pro rata at the recent October 2025 interest payment date, due to all note amortization triggers being met. S&P said, "In series 2006-FF1, the replacement trigger ('A-1+', which is equivalent to a long-term rating of 'AA-') is higher than the required 'BBB' rating level under our revised counterparty criteria for low exposures. However, Barclays Bank is currently in breach of its replacement triggers as the transaction account provider, liquidity provider, guaranteed investment contract provider, and collection bank given our current issuer credit rating (ICR) on it is 'A+'. S&P said, "Therefore, given the ongoing breach and lack of remedial actions since our 2011 downgrade, we conclude that the counterparty risk cap remains applicable. Moreover, the documented swap triggers are inconsistent with our revised counterparty criteria and would lead to the application of a counterparty risk cap at Barclay's current resolution counterparty rating (RCR) of 'AA-'." In series 2007-FF1, Barclay's replacement triggers as transaction account provider and collection bank ('A-2', which is equivalent to a long-term rating of 'BBB') are in line with the required 'BBB' rating level under our revised counterparty criteria for low exposures. However, Lloyd's Bank PLC's replacement trigger as liquidity facility provider ('A-1+', which is equivalent to a long-term rating of 'AA-') is currently in breach given our current ICR on it is 'A+', which results in a counterparty risk cap at 'A+'. Moreover, the documented swap triggers in relation to Merrill Lynch International are inconsistent with S&P's revised counterparty criteria and would lead to the application of a counterparty risk cap at Merrill Lynch International's current RCR of 'A+'. S&P said, "We affirmed our ratings on all notes in both series. Our credit and cash flow analysis indicates that the available credit enhancement for series 2006-FF1's class A2a, A2b, Ba, and Bb notes and series 2007-FF1's class A2a, A2b, Ma, Mb, Bb, and Cb notes is commensurate with higher ratings than those currently assigned. However, as our counterparty criteria continue to cap these ratings at 'A+', we affirmed our 'A+ (sf)' ratings on these classes of notes. "Our analysis also indicates that the available credit enhancement for series 2006-FF1's class C and D notes and series 2007-FF1's class Da, Db, and E notes is commensurate with higher ratings than those currently assigned. However, our analysis considered the borrowers' credit profile, the level of credit enhancement, the tranches' junior position in their respective capital structures, the elevated arrears, the high-interest rate environment, and tail risk in the transactions due to the low pool factor and the high percentage of interest-only loans. We therefore affirmed our 'A (sf)' credit rating on series 2006 FF1's class C notes, 'A- (sf)' credit rating on series 2006-FF1's class D notes, and 'BBB+ (sf)' credit ratings on series 2007-FF1's class Da and Db notes. "Series 2006-FF1's class E notes and series 2007-FF1's class E notes face minor shortfalls in our standard cash flow run under high prepayment scenarios. However, when we lower the high prepayment assumption according to our expectations considering the low observed constant prepayment rate (CPR) on these transactions, these notes do not face any shortfalls. We therefore affirmed our 'BBB (sf)' rating on series 2006-FF1's class E notes and 'BB+ (sf)' rating on series 2007-FF1's class E notes." The transactions are backed by pools of legacy nonconforming owner-occupied and buy-to-let mortgage loans secured on properties in the U.K. PROJECT GRAND: S&P Affirms 'B' Sr. Notes Rating, Outlook Now Neg. ----------------------------------------------------------------- S&P Global Ratings revised its outlook to negative and affirmed its issuer credit rating on Project Grand Bidco (UK) Ltd. (Purmo) and its issue rating on the EUR430 million sustainability-linked senior secured fixed-rate notes it had issued at 'B'. The recovery rating is unchanged at '4', indicating our expectation of average recovery prospects (30%-50% rounded estimate: 40%). The negative outlook reflects thin rating headroom, at a time where any underperformance against S&P's base case could result in higher-than-expected leverage for a prolonged period and credit metrics more commensurate with a lower rating. Growth in Purmo's key underlying markets has been more challenging than expected because of declining volumes in the construction end-market, especially the residential end-market, where the company generates about 80% of its sales. Management continues to pursue initiatives to streamline Purmo's cost base and improve profitability. As a result, restructuring costs in 2025 will exceed our previous estimates. S&P understands these initiatives could continue through 2026, and the associated costs could therefore continue to weigh on profitability. S&P said, "We expect Purmo to continue to see benefits from its restructuring in 2026, so that the company's profitability shows a mild recovery from the lower-than-expected level seen in 2025. That said, we now forecast S&P Global Ratings-adjusted debt to EBITDA (including one-off costs) of 6.0x-6.5x in 2026, up from our previous forecast of 4.5x-5.0x. "Because the residential construction sector has recovered more slowly than anticipated, we have revised down our expectations for projected revenue at Purmo for 2025-2026. The anticipated recovery in residential construction spending in Europe during 2025 has not materialized. Given that Purmo has significant exposure to residential construction, which accounts for about 80% of company sales, this meant softer demand for Purmo's products through the first nine months of the year. Purmo's core product, radiators, benefit from recurring demand driven by home renovations and proved to be resilient. However, the company's second-best-selling product category, underfloor heating solutions, are more exposed to new construction. Purmo's products and components exposed to the new build segment represent about 40% of group sales. "We anticipate a slow recovery in new construction in 2026, especially in key markets like Germany and the U.K., where Purmo maintains a strong presence. Although overall market conditions will improve slightly, they will likely remain challenging, and we anticipate that demand for Purmo's products will therefore be relatively flat and will start from a lower sales base than we had projected for the full year 2025. Given the company's strong market share and the premium quality of its products, Purmo has capacity to increase prices, which could offset lower volumes. As a result, we foresee revenue growth of about 1.5%, and overall revenue of about EUR720 million in 2026, compared with our previous expectation of about EUR810 million. In the long term, we still expect demand for Purmo's products and services to be favourable, in light of sustainability megatrends, supported by EU regulations that promote more-energy-efficient heating systems. That said, robust growth in demand is likely to materialize only after a recovery in the residential construction market. "Restructuring costs, combined with lower volumes, weigh on the company's profitability. We now predict lower S&P Global Ratings-adjusted EBITDA margins than we previously forecast. Since 2022, Purmo has been implementing a series of restructuring initiatives to address operational inefficiencies and mitigate the impact of declining volumes. We now expect these initiatives to be extended into 2026, and therefore that restructuring charges will be higher than previously anticipated for the next two years." The latest measures include changing Purmo's production base to move its assembly and production lines toward lower-cost countries. The company had materially reduced headcount to maximize its efficiency, given that it is experiencing slower business growth. Management estimates that these initiatives will generate material cost savings of about EUR32 million through 2027. S&P said, "However, we expect the full cash benefit of these savings to materialize partially in 2026 and fully in 2027. Furthermore, lower-than-anticipated volumes are offsetting supportive steel pricing, which could squeeze the company's S&P Global Ratings-adjusted EBITDA margin further. We now estimate that S&P Global Ratings-adjusted EBITDA margins will average 9%-11% in 2025-2026; our previous forecast was 12%-14%." S&P said, "We assume that lower profitability, combined with one-off fees of about EUR15 million linked to the take-private transaction, are likely to cause FOCF to turn negative by about EUR35 million in 2025. That said, we expect FOCF to improve and be at least neutral in 2026 as the underlying market recovers and the impact of one-off items eases. Purmo has historically exhibited positive cash flow, supported by recurring and replacement activities. The company has a flexible cost structure--about 30% of its total costs are related to raw materials (steel and plastics). Management has also made substantial improvements to the company's collection of receivables and inventory management in recent quarters. As such, we forecast that Purmo will generate materially positive FOCF from 2027 onward. "After revising our base case, we now expect debt to EBITDA to be 6.0x-6.5x in 2026. Lower profitability and the impact of one-off items depressed our forecast from the previous 4.5x-5.0x. Our base case does not include any potential incremental debt, although we cannot rule this out, given that Purmo is owned by a financial sponsor and these typically tolerate high leverage. In addition, Purmo operates in a fragmented market that could offer new opportunities for acquisitions. We understand that management aims to broaden its product offerings and reduce its concentration on radiators, which could lead to new deals. "Our rating on Purmo is supported by its ample liquidity and lack of upcoming maturities. Our assessment reflects the company's adequate liquidity profile, further enhanced by management's decision to proactively upsize the super senior revolving credit facility (RCF) to EUR120 million from EUR100 million. The facility matures in 2029 and is currently undrawn. In our view, Purmo has limited liquidity needs, given that its business model is not that asset-intensive and capital expenditure (capex) usually amounts to less than 3% of sales. More importantly, its senior secured notes do not mature until 2029, and therefore it has no upcoming debt maturities. "The negative outlook reflects thin rating headroom, at a time where any underperformance against our base case could result in higher-than-expected leverage for a prolonged period and credit metrics more commensurate with a lower rating." S&P could lower the rating if demand in key regions is persistently subdued or restructuring costs in 2026 exceed expectations, leading to lower EBITDA growth than it currently forecasts and, as a result: -- Debt to EBITDA above 5.5x, without expectations of an improvement; -- Funds from operations (FFO) cash interest coverage remaining well below 2x with no prospect of recovery; -- Persistent negative FOCF; or -- Liquidity coming under strain. S&P said, "We could revise the outlook to stable if demand in key regions began to rise meaningfully and the company saw benefits from its restructuring initiatives, so that adjusted EBITDA margins started to improve to more than 10%. An outlook revision would also depend on S&P Global Ratings-adjusted debt to EBITDA trending back to below 5.5x and sustainable positive FOCF, while keeping the interest coverage ratio above 2x." WOLSELEY GROUP: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has revised Wolseley Group Holdings Limited's Outlook to Stable from Positive, while affirming its Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed the group's GBP350 million notes at senior secured rating 'B+' with a Recovery Rating of 'RR3'. The revised Outlook reflects an extended period of EBITDA margin pressure, which Fitch expects to delay the group's deleveraging trajectory. The rating reflects Wolseley's concentration on the UK and Irish markets and an increased leverage profile during the July 2025 financial year. Supporting factors are its strong business profile, underpinned by its market-leading positions in plumbing and heating (P&H), alongside it's diversified products and customers. Exposure to the more resilient P&H renovation, maintenance and improvement segments helps offset exposure to construction cyclicality. Key Rating Drivers Slower Expected Deleveraging: Wolseley reported Fitch-defined leverage of 6.4x in FY25, above Fitch's previously expected 5.3x. Fitch now expects a slower deleveraging trajectory, with an EBITDA leverage of 6.7x in FY26 improving to 5.0x in FY29. The group has demonstrated its ability to deleverage following the acquisition by Clayton, Dubilier & Rice (CD&R), a private equity company, in 2021, maintaining low leverage during market downturns while actively pursuing bolt-on M&A. Constrained EBITDA Margin: The group's EBITDA margin declined in FY25 due to higher operating costs, particularly labour costs. Fitch estimates a largely flat performance in FY26, with only modest margin gains. Ongoing initiatives to review commercial terms and simplify customer deal structures—supporting optimised pricing and product mix—should underpin EBITDA over the next four years and help lift margins to about 4% by FY29. Limited FCF Generation: The group's free cash flow (FCF) in FY26 will be constrained by a one-off increase in interest payments due to payment timings. Thereafter, FCF will remain limited by ongoing interest costs and working-capital outflows to support growth. Fitch expects the FCF margin to turn positive from FY28, supported by higher revenue and improving EBITDA margins. Exposure to Cyclical End-Markets: Wolseley benefits from diversified end-markets poised for cyclical recovery and structural growth, supported by UK government policies and various initiatives. The group is exposed to the cyclical UK construction and housebuilding sectors but also has substantial exposure to the more resilient P&H sector's renovation, maintenance and improvement market. Geographical Concentration: Wolseley's operations are limited to the UK and Ireland, unlike more diversified peers such as, Winterfell Financing S.a.r.l. (Stark) and Quimper AB (Ahlsell), which operate in multiple countries. This limited geographical diversification constrains the rating. Long-Term Growth Potential: Wolseley is strategically positioned to capitalise on the rise of heat pumps in the UK, especially with the expected implementation of government policies requiring low-carbon heating solutions in new builds. The timing of these policy changes remains unclear, but Wolseley's robust market position in traditional boilers will also sustain long-term growth. The group is also well-positioned for the expected growth of the infrastructure sector in the UK, notably within utilities and power. Peer Analysis Wolseley's business profile is weaker than those of Travis Perkins Plc (BB+/Stable), Quimper (B+/Negative), and Stark (B-/RWN). It is smaller than all three, with FY25 revenue of GBP2.3 billion, versus Travis Perkins's GBP4.6 billion in FY24, Quimper's GBP3.6 billion in FY24, and Stark's GBP6.7 billion in FY25. Wolseley has weaker geographical diversification than Stark and Travis Perkins. Fitch said, "However, Wolseley has a stronger financial profile than Stark, and we forecast its EBITDA margin to improve over FY26-FY29, from 3.1% to 3.9%, outperforming Stark's 2.2%-3.5%, over the same period. We forecast Wolseley to deleverage to 5.0x in FY29, a quicker deleveraging path than Stark's 8.0x in the same year. Wolseley's EBITDA margin of an estimated 2.8% in FY26 is considerably weaker than Quimper's 9.2% in FY24." Fitch’s Key Rating-Case Assumptions - Revenue growth of low-to mid-single digits in 2026-2029 - Net M&A at about GBP15 million annually in 2026-2029 - EBITDA margin improving to 3.1% in 2026, 3.6% in 2027, 3.8% in 2028 and 3.9% in 2029, from 3.1% in 2025 due to increased volumes and improved cost efficiencies - Capex to increase to 1.3% of revenue in 2026 and then reduce to 1.1% in 2027-2028 - Working-capital outflow at an average of 0.7% of revenue in 2026-2029 Recovery Analysis The recovery analysis assumes that Wolseley would be reorganised as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. The going-concern EBITDA of GBP75 million reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which Fitch bases the enterprise valuation (EV). Stress to EBITDA would most likely result from failure to regain volumes and implement cost-saving initiatives, affecting profitability. This would effectively represent a proxy for cash flow in a liquidation outcome. Fitch applies a distressed EV/EBITDA multiple of 5.5x to calculate the post-reorganisation EV, reflecting Wolseley's high market share, challenging operating environment and potential for further growth. The multiple is in line with those of Stark and Quimper. Fitch assumes, for the purpose of the recovery analysis, a highest drawn amount of its super senior asset-backed loan (ABL) of GBP139 million, followed by its GBP350 million notes. The waterfall analysis output for the senior secured debt (GBP350 million notes) generated a ranked recovery in the 'RR3' band, indicating an instrument rating of 'B+'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 6.0x on a sustained basis - EBITDA margin below 3.5% on a sustained basis - Consistently negative FCF - EBITDA interest coverage below 2.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 5.0x on a sustained basis - EBITDA margin above 4.5% on a sustained basis - Sustained positive FCF - EBITDA interest coverage above 3.0x Liquidity and Debt Structure At end-October 2025, Wolseley had Fitch-adjusted readily available cash of GBP129 million and has drawn GBP120 million of the GBP305 million ABL. Fitch forecasts negative FCF in 2026 and neutral-to-positive FCF for 2027-2029. Wolseley's outstanding debt consists of GBP350 million senior secured notes, maturing in July 2030, and a GBP305 million ABL, maturing in January 2030. Issuer Profile Wolseley is a leading specialist merchant of Heating, Ventilation and Air Conditioning plumbing, renewables, sanitaryware, infrastructure and utility products in the UK and Ireland. RATINGS ACTION Rating Prior ------ ----- Wolseley Group Finco Plc senior secured LT B+ Affirmed RR3 B+ Wolseley Group Holdings Limited LT IDR B Affirmed B ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *