260202.mbx

260202.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, February 2, 2026, Vol. 27, No. 23 Headlines A R M E N I A ARDSHINBANK: Fitch Rates USD600MM 6.6% Eurobonds Due 2031 'BB-' F R A N C E MEDIAWAN HOLDING: Moody's Affirms 'B2' CFR, Outlook Remains Stable G E R M A N Y CHEPLAPHARM ARZNEIMITTEL: Fitch Rates New EUR750MM Notes B+(EXP) CIDRON ATRIUM: Fitch Gives 'B-' LongTerm IDR, Outlook Positive G R E E C E TITAN GLOBAL: Fitch Rates New EUR350MM Unsecured Notes 'BB+' I R E L A N D INVESCO EURO XII: S&P Affirms B-(sf) Rating on Class F Notes MADISON PARK VII: Fitch Affirms B+sf Rating on Class F Notes PUBLIC POWER: S&P Affirms 'BB-' ICR & Alters Outlook to Positive I T A L Y FABBRICA ITALIANA: Fitch Hikes LongTerm IDR to B+, Outlook Stable ITALMATCH CHEMICALS: Fitch Rates New 5-Yr. EUR690MM Notes 'B(EXP)' NEXTURE SPA: Fitch Affirms 'B+' IDR & Rates New Notes 'B+(EXP)' L U X E M B O U R G FS LUXEMBOURG: Fitch Rates New Sr. Unsec. Notes Due 2036 'BB-' MSME COMPARTMENT 474: Fitch Cuts Rating on Notes to BB+sf SES SA: Fitch Lowers Subordinated Debt Rating to 'BB' N E T H E R L A N D S ACR I BV: Moody's Lowers CFR to Ca & Alters Outlook to Stable JUBILEE PLACE 9: Moody's Assigns (P)B1 Rating to Class E Notes VTR FINANCE: Moody's Upgrades CFR to B1 & Alters Outlook to Stable S P A I N BANCO SANTANDER: Fitch Affirms BB+ Rating on Preferred Debt SABADELL CONSUMO 3: Fitch Affirms BB-sf Rating on Class F Notes T U R K E Y ADM ELEKTRIK: Fitch Gives BB-(EXP) LongTerm IDR, Outlook Stable U K R A I N E UKRAINIAN RAILWAYS: Fitch Cuts 2028 LPNs to D on Coupon Nonpayment U N I T E D K I N G D O M EG GROUP: Fitch Rates New Term Loan B & Revolver Debt 'B+' HGH FINANCE: Moody's Affirms 'B2' CFR, Outlook Remains Stable PEACH PUB: FTI Consulting Named as Administrators PHARMANOVIA BIDCO: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg POLARIS 2026-1: Fitch Gives B-(EXP) Rating to Class X2 Debt POWERVAULT: Statement of Proposals Available from Administrators REVEL COLLECTIVE: FTI Consulting Named as Administrators VANQUIS BANKING: Fitch Alters Outlook on 'BB-' IDR to Positive - - - - - ============= A R M E N I A ============= ARDSHINBANK: Fitch Rates USD600MM 6.6% Eurobonds Due 2031 'BB-' --------------------------------------------------------------- Fitch Ratings has assigned Ardshinbank OJSC's issue of USD600 million 6.6% senior unsecured Eurobonds due January 22, 2031 a final 'BB-' rating. The bonds are housed under special-purpose vehicle, Dilijan Finance B.V. (Netherlands), which on-lends the proceeds to the bank. The assignment of the final rating follows the receipt of documents conforming to information already received. The final rating is the same as the expected rating. Key Rating Drivers The bonds' rating is in line with Ardshinbank's Long-Term Issuer Default Rating (IDR) of 'BB-', as the notes represent unconditional, senior unsecured obligations of the bank, with average recovery prospects for noteholders in a default. Ardshinbank's 'BB-' IDR is driven by the bank's standalone credit profile, as captured by its Viability Rating. The ratings reflect the bank's strong domestic franchise, robust profitability, which underpins its high capital ratios, healthy asset quality and solid liquidity. These strengths are balanced by Fitch's assessment of the cyclical operating environment in Armenia, and resulting credit risks resulting from a highly dollarised and concentrated economy. The Positive Outlook on Ardshinbank is in line with that of the Armenian sovereign. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The senior debt rating could be downgraded following a downgrade of the IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The senior debt rating could be upgraded following an upgrade of the IDR. =========== F R A N C E =========== MEDIAWAN HOLDING: Moody's Affirms 'B2' CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Ratings has affirmed the B2 long term corporate family rating and the B2-PD probability of default rating of Mediawan Holding S.A.S. (Mediawan or the company), a leading European independent TV content producer. Concurrently, Moody's have affirmed the ratings on the EUR575 million backed senior secured term loan B2 (TLB) due July 2031 and the EUR225 million backed senior secured revolving credit facility (RCF) due January 2031 — which Mediawan intends to increase to EUR275 million as part of the transaction—both borrowed by Mediawan Financing S.A.S. The outlook remains stable for both entities. Moody's have also assigned a B2 rating to the proposed EUR225 million new backed senior secured TLB fungible add-on due July 2031 to be borrowed by Mediawan Financing S.A.S. The proposed EUR225 million TLB fungible add on, together with a share-based consideration of EUR744 million and EUR42 million in deferred price considerations, will be used to fund the acquisition of North Road Company (NRC), a leading independent US content studio, for a total enterprise value of around $1 billion. The transaction will be financed through a combination of $800 million in Mediawan shares and $200 million in cash. Of the $200 million cash consideration, $150 million will be paid upfront, $25 million will be deferred over five years and $25 million will be paid in 2027 as an earn out contingent on achieving the 2026 targeted EBITDA. "The proposed acquisition of NRC materially strengthens Mediawan's business profile. The transaction expands the group's operational scale and enhances its revenue mix by increasing exposure to production activities while reducing dependence on legacy intellectual property. Geographic diversification improves meaningfully, with lower reliance on France and Germany and greater presence in North America. The acquisition also results in a more balanced genre mix, with a higher weighting of unscripted content, which typically offers shorter production cycles and lower execution risk," says Víctor García Capdevila, a Moody's Ratings Vice President-Senior Analyst and lead analyst for Mediawan. RATINGS RATIONALE The transaction is financially credit positive, supported by a high proportion of equity financing. Approximately 80% of the consideration will be paid in Mediawan shares, limiting incremental debt needs. To fund the cash portion, Mediawan plans to issue a EUR225 million add on to its existing EUR575 million Term Loan B. Mediawan forecasts around EUR42 million of EBITDA contribution from NRC; however, Moody's adjust this figure to EUR35 million to exclude non recurring and unusual items. Leverage will remain elevated in the near term despite gradual deleveraging prospects. On a pro forma basis, Moody's adjusted gross leverage is expected to be around 6.3x in 2026 and 5.9x in 2027, supported by earnings growth and a largely equity funded acquisition. Interest coverage (EBITA/interest) is projected to strengthen to 2.2x in 2026 and 2.4x in 2027. Free cash flow generation is expected to remain positive, reaching around EUR33 million in 2026 and EUR37 million in 2027. Mediawan benefits from a strong track record of acquiring and integrating large, transformational assets. Past acquisitions—including Lagardère Studios (2020), Plan B (2023) and Leonine (2024)—demonstrate the company's ability to successfully execute complex transactions and extract commercial and operational synergies. However, the company remains weakly positioned within the B2 rating category. Moody's adjusted gross leverage has remained consistently above the 5.0x–6.0x thresholds for the rating, and following the NRC acquisition, is expected to stay outside these parameters for at least the next 12 months. Persistently elevated leverage limits the company's financial flexibility. Mediawan's strategy continues to rely heavily on inorganic growth, increasing execution and financial risk. Since its creation in 2015, the group has demonstrated a strong appetite for M&A, particularly large and transformative transactions. While scale is a competitive advantage in the highly fragmented content production industry—supporting synergies, bargaining power with global streamers, and format adaptation—acquisition multiples remain high. As a result, even transactions with significant equity components tend to slow deleveraging. Mediawan's ambitious growth strategy heightens the risk of delayed credit metric improvement. The company has yet to build a consistent track record of delivering against financial expectations. At the time of the inaugural rating in June 2024, Moody's expected rapid deleveraging, which did not materialize. Sustained execution against budget and consistent operating performance will be required to strengthen credit quality going forward. Industry dynamics further constrain credit quality. The content production sector exhibits inherent revenue and earnings volatility, driven by the timing of project deliveries and exposure to macroeconomic conditions. In downturns, project cancellations or delays and cuts in TV advertising budgets can materially affect volumes and profitability. LIQUIDITY Liquidity remains good, supported by a post transaction cash balance of EUR212 million, full availability under the EUR225 million revolving credit facility (RCF)—which Mediawan intends to increase to EUR275 million as part of the proposed transaction—and a well laddered debt maturity profile, with no scheduled maturities until January 2031 for the RCF and July 2031 for the Term Loan B. The RCF is subject to a springing net debt/EBITDA covenant of 7.5x, tested only when drawings exceed 40% of the total commitment. Production costs are financed through a combination of broadcasters' prepayments and short term production credits, which together fund roughly 65% of total programme costs, with the remainder covered by internally generated cash flow. Moody's forecasts that the company generated positive free cash flow (FCF) of around EUR22 million in 2025 and will generate approximately EUR33 million in 2026. STRUCTURAL CONSIDERATIONS The B2-PD probability of default rating is in line with the B2 CFR, reflecting the 50% family recovery rate used. This is in line with Moody's approach for all first-lien bank debt with covenant-lite capital structures. The EUR800 million TLB and the EUR275 million RCF are rated B2, in line with the company's CFR. All facilities are guaranteed by the company's subsidiaries and benefit from a guarantor coverage of not less than 80% of the group's consolidated EBITDA. The security package includes shares, bank accounts and intercompany loans of material subsidiaries. The shareholder loan, due six months after the maturity of the senior secured debt and provided by KKR, receives equity credit under Moody's Hybrid Equity Credit methodology. RATIONALE FOR STABLE OUTLOOK While Mediawan's rating remains weakly positioned in the B2 category due to its high leverage, the stable outlook reflects Moody's expectations that the company will progressively reduce its Moody's-adjusted gross leverage ratio toward 6.0x in 2026 and below in 2027, supported by mid-single-digit organic revenue growth and a moderate improvement in profit margins. The stable outlook does not assume any sizeable debt-funded acquisitions and incorporates Moody's expectations that the company will maintain adequate liquidity at all times. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if the company establishes a track record of solid operating performance and meaningful deleveraging, such that its Moody's-adjusted gross leverage remains sustainably below 5.0x and its free cash flow remains materially positive. The rating could be downgraded if the company fails to reduce leverage toward 6.0x by 2026 and generates negative free cash flow. A deterioration in liquidity could also place additional pressure on the rating. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in November 2021. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Mediawan Holding S.A.S. (Mediawan), headquartered in Paris, France, is a leading European independent TV content producer. The company creates, develops, sells, produces, distributes and licenses TV content worldwide across a network of 85 production companies in 12 countries and engages more than 550 creative talents. The group is largely focused on scripted content production and distribution, and benefits from a large library of more than 30,000 hours of content. In 2025, Moody's estimates that the group generated revenue and Moody's-adjusted EBITDA of EUR1,288 million and EUR158 million, respectively. ============= G E R M A N Y ============= CHEPLAPHARM ARZNEIMITTEL: Fitch Rates New EUR750MM Notes B+(EXP) ---------------------------------------------------------------- Fitch Ratings has assigned CHEPLAPHARM Arzneimittel GmbH's (Cheplapharm) proposed EUR750 million senior secured notes an expected 'B+(EXP)' rating, while affirming its Long-Term Issuer Default Rating (IDR) at 'B'. The Outlook is Stable. The Recovery Rating of the senior secured debt is 'RR3'. The affirmation balances Cheplapharm's expected high leverage until 2028 and the slow structural organic decline of its portfolio of off-patent established and niche drugs, with strong operating margins and free cash flow (FCF) generated by its asset-light business model in a non-cyclical sector. The Stable Outlook reflects Fitch's expectation that the group will continue to generate substantial positive FCF and that its performance will remain adequate over 2026-2028, with organic revenue decline contained to the low single digits and stable EBITDA margins. Fitch assumes no material acquisitions in 2026 and only small acquisitions from 2027, which should lead to EBITDA leverage of between 6.0x and 6.5x over the next three years. Key Rating Drivers Proposed Refinancing Improves Maturity Profile: Cheplapharm plans to use the EUR750 million notes proceeds to refinance its next maturities in 2028 of the same amount. The proposed refinancing will push the next major maturities to 2029-2030, reducing refinancing risk. The group proactively addresses its upcoming maturities, which supports Fitch's assessment of its financial policy and liquidity management. Operational Transformation Stabilises Performance: Fitch said, "We expect Cheplapharm to complete its operational transformation programme by end-2026, which has already helped stabilise the business and contain EBITDA decline. We estimate EBITDA in 2025 at slightly lower than that in 2024, with mildly higher revenue offsetting a small contraction of Fitch-calculated EBITDA margins to 41.6% (adjusting for a one-off EBITDA shortfall related to Pulmicort), from 43.2% in 2024. We project the organic revenue decline to be contained in 2026 as supply chain issues are addressed and commercial performance recovers." Commercial weakness since 2024 has been driven by integration problems associated with large acquisitions and the group's increased complexity following a period of rapid, acquisitive growth. Fitch expects the group to refrain from large acquisitions until the transformation programme is completed. Leverage to Stay High: Fitch said, "We estimate EBITDA leverage will stay high, within 6.0x to 6.5x until 2028, assuming stable margins and the absence of material M&A to partly offset the organic revenue decline of the existing portfolio. However, we expect moderate M&A from 2027 - to be funded by internal cash flow - to resume from 2027 and their associated EBITDA contribution to aid moderate deleveraging." Margins to Remain Stable: Fitch said, "We expect the organic revenue decline will be contained to the historical low-to-mid single digits over 2026-2028, keeping EBITDA margins stable at 41%. The lower margins, compared with the above 50% before 2024, are largely related to the lower portion of transitional service agreements revenue from acquisitions. We expect a gradual recovery of the lost market share once product availability issues abate, given the nature of its portfolio of off-patent drugs, which includes a mix of niche drugs with no or little generic competition and legacy drugs, at least half of which have strong brand recognition and are less affected by generic competition." Strong FCF Generation: Fitch said, "We project that Cheplapharm will continue to generate strong FCF until 2027, enabling it to modestly reduce its debt or self-finance acquisitions. We estimate FCF will average EUR175 million a year in 2026 and 2027, following a weaker 2025 due to large working capital outflows, including a moderate increase in factoring use. The group's inventory optimisation programme should contribute to positive FCF in 2026 and 2027 of up to EUR100 million a year." Leverage Focus as M&A Resumes: Fitch said, "The rating affirmation is based on the assumption that the group will return to making acquisitions from 2H26, albeit of a smaller scale and structured in ways that avoid increasing leverage. Prior to 2H24 we had expected Cheplapharm to use internally generated cash, combined with the flexibility under its revolving credit facility (RCF), to prioritise acquisitions. We expect that over the medium term the group will have to invest at least an amount equivalent to 8%-9% of its revenue each year in acquisitions (which we treat as development capex) to offset its structural organic portfolio decline." Peer Analysis Fitch said, "We rate Cheplapharm using our Ratings Navigator Framework for Pharmaceutical Companies. Cheplapharm is rated two notches above Pharmanovia Bidco Limited (CCC+), due to the latter's smaller scale and recent severe operational underperformance and a currently unclear medium-term plan offsetting a comparable asset-light scalable business model." Cheplapharm is rated below Grunenthal Pharma GmbH & Co. Kommanditgesellschaft (BB/Stable), reflecting the latter's more conservative financial policy with a leverage of 3.0x-4.0x and strong FCF margins derived from a portfolio of off-patent and innovative drugs and own manufacturing and distribution capabilities, albeit with lower EBITDA margins of about 20%. Fitch said, "We rate Cheplapharm at the same level as ADVANZ PHARMA HoldCo Limited (B/Stable). The latter is involved in bringing new niche, specialist and value-added generics to market through co-development, in-licencing, and distribution agreements, but it has smaller business scale and lower operating and cash flow margins, although leverage is lower at 5.5x-6.0x." Fitch said, "Cheplapharm's IDR is at the same level as generics producer Nidda BondCo GmbH (B/Stable). Cheplapharm has much smaller scale and a more concentrated portfolio, which is mitigated by wide geographic diversification within each brand. Nidda BondCo's rating is limited by high EBITDA leverage at about 7.5x in 2024 but which we expect to reduce towards 6.5x from 2025, to comparable levels with Cheplapharm's." Fitch's Key Rating-Case Assumptions - Revenue growth of 2% in 2025, driven by mild organic growth and the annualisation of sales of drugs acquired in 2024 - Organic revenue decline of 2%-3% over 2026-2028 - EBITDA margin to remain 41% by 2028 - Maintenance capex at about 1% of sales - No new material M&A in 2025, followed by M&A of EUR50 million in 2026 and EUR150 million a year in 2027 and 2028. Fitch treats acquisitions as consuming 8%-9% of the previous year's sales as capex - Deferred payments of EUR54 million in 2025 - One-off costs of EUR35 million in 2025, EUR20 million 2026 and EUR10 million in 2027 and 2028 - Trade working-capital outflows of about EUR139 million a year in 2025, then cash inflows of EUR25million-EUR45 million a year in 2026 and 2027 due to the working capital improvement programme - No common dividends payments in 2025 to 2028 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): Business and financial profile factors (assessment, relative importance) are management (bb, moderate), sector characteristics (bb+, moderate), market and competitive positioning (b+, higher), diversification and asset quality (bbb, lower), company operational characteristics (b, moderate), profitability (bbb+, moderate), financial structure (b-, higher) and financial flexibility (b, moderate). The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the latest historical year 2024, 40% for the historical year 2025 and 40% for the forecast year 2026. The governance assessment of 'some deficiencies' results in no adjustment to the IDR. The operating environment assessment of 'a' results in no adjustment to the IDR. The SCP is 'b'. Recovery Analysis Fitch said, "We expect that Cheplapharm would most likely be sold or restructured as a going concern (GC) in a bankruptcy rather than liquidated, given its asset-light business model. "We estimate a post-restructuring GC EBITDA at about EUR600 million, which includes the contribution from the recently closed drug intellectual property acquisitions. We expect that Cheplapharm would be required to address debt service and fund working capital as it takes over inventories following the transfer of market-authorisation rights, as well as making smaller M&A to sustain its product portfolio to compensate for a structural sales decline." Fitch applies a distressed enterprise value/EBITDA multiple of 5.5x, reflecting the underlying value of the group's portfolio of intellectual property rights. After deducting 10% for administrative claims, the allocation of value in the liability waterfall results in a Recovery Rating of 'RR3' for the existing senior secured debt, including its EUR695 million RCF, which Fitch assumes will be fully drawn prior to distress. This indicates a 'B+' instrument rating, one notch above the IDR. Fitch projects factoring financing to remain in place at and after distress given the nature of its established products with a stable patient pool. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A more aggressive financial policy, leading to EBITDA leverage above 6.5x on a sustained basis - EBITDA interest coverage below 2.0x on a sustained basis - Positive but continuously declining FCF - Unsuccessful management of individual pharmaceutical intellectual property rights leading to material permanent loss of income and EBITDA margins declining below 40% Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade is unlikely in the near term. Fitch could consider an upgrade once the ongoing transformation plan has been delivered, resulting in a stabilisation of operating performance with organic revenue decline contained to the low-single digits and steady to improving EBITDA margins - EBITDA leverage below 5.5x on a sustained basis - EBITDA interest coverage above 3.0x on a sustained basis - Continuously positive FCF margins in the mid-to-high teens Liquidity and Debt Structure Fitch said, "We view liquidity as comfortable, with EUR137 million in readily available cash as of 3Q25 (excluding Fitch-restricted EUR20 million for operational purposes) and access to its EUR695 million committed RCF (of which EUR150 million was drawn at end-September 2025) maturing in February 2028. In addition, we expect Cheplapharm to generate strongly positive FCF, which we estimate at EUR50 million-200 million between 2025 and 2028." The group has no immediate maturities until January 2028 when EUR753 million come due. After this transaction, the closest maturity will be EUR1,480 million in February 2029 and EUR1,050 million in May 2030. Issuer Profile Cheplapharm is a Germany-based pharmaceutical company focused on the life-cycle management of off-patent niche and legacy drugs, which it acquires from big pharmaceutical companies. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- CHEPLAPHARM Arzneimittel GmbH LT IDR B Affirmed B senior secured LT B+(EXP) Expected Rating RR3 senior secured LT B+ Affirmed RR3 B+ CIDRON ATRIUM: Fitch Gives 'B-' LongTerm IDR, Outlook Positive -------------------------------------------------------------- Fitch Ratings has assigned Cidron Atrium SE (Alloheim) - a Germany-based private care home operator - a Long-Term Issuer Default Rating (IDR) of 'B-'. The Outlook is Positive. Fitch has also assigned an expected rating of 'B-(EXP)' with a Recovery Rating of 'RR4' to Alloheim's proposed EUR925 million senior secured notes due 2033. The rating reflects Alloheim's high leverage and low fixed charge coverage, which are balanced by Fitch's expectation of positive free cash flow (FCF) and a sustainable business profile with a leading market position in the defensive German nursing care sector. The Positive Outlook reflects Fitch's expectation that EBITDA leverage will improve modestly to below 7.0x, driven by EBITDA expansion supported by organic revenue growth and the reinvestment of positive FCF in bolt-on acquisitions. Key Rating Drivers Improved Profitability: Fitch said, "We expect Alloheim's EBITDA margins to improve to 9.6% in 2025, a level in line with the historical 9%-10% range prior to 2022, from 8.8% in 2024. This will be driven by increases in care rates, and normalising levels of both occupancy and temporary staff hires. Material underperformance in 2022 and 2023 was largely a result of a one-year delay in the cost-pass through mechanism in the German nursing home reimbursement system amid high inflation in 2022-2023. We expect EBITDA margins to gradually improve towards 10% by 2028 due to care-rate increases and slightly improved operating leverage." Weak Credit Metrics, Gradually Improving: Fitch said, "High leverage and low fixed charge coverage are the main rating constraints, but we expect EBITDA expansion and positive FCF to drive deleveraging, which supports the Positive Outlook. The group's leverage profile has strengthened due to improved EBITDA generation. EBITDAR leverage declined to 7.2x at end-2025 from 7.8x at end-2024, and we forecast a further improvement to 7.0x by end-2026 and 6.8x by end-2027. We expect EBITDAR fixed-charge coverage to gradually improve to 1.5x by 2029 from 1.3x in 2025." Strengthening FCF: Fitch said, "We estimate that FCF margins turned positive in 2025 at above 2%, following three years of neutral or slightly negative FCF, driven by EBITDA growth. We estimate FCF margins to be sustainably positive at 2%-4% over 2025-2029. We project small working capital outflows and a fairly low net capex intensity of 1.6% over 2026-2029, including for refurbishment of care homes and modest expansion of bed capacity, versus an estimated 2% in 2025." Regulated Market Limits Price Increases: Alloheim operates in a highly regulated market where fees are negotiated for each home and reviewed by long-term care insurance funds and social welfare authorities every 12-18 months. Profitability can come under pressure in times of high inflation if there is a time lag in passing on cost increases. Steady Growth Prospects: Alloheim benefits from a robust business model underpinned by its position as the largest private operator of care homes in Germany's sizeable and fragmented care market. The company operates in a non-cyclical sector with steadily growing demand driven by demographic trends. Fitch views Alloheim as well-positioned to manage regulatory tightening through effective cost management, particularly by ensuring access to qualified care staff, closely monitoring operating KPI, and maintaining a well-invested, modern estate portfolio. Well-Placed in Socially Relevant Sector: Private nursing home operators such as Alloheim play a critical role in Germany's social infrastructure, by contributing to new capacity and improving service quality. Public and non-profit providers have been unable to fully meet growing care demand, raising the importance of private operators. Elderly care remains a policy priority for the German federal government, with a continuing focus on nursing staff availability and remuneration, quality of care and long-term funding adequacy of the national social care system. Supportive Sector Fundamentals: Germany's social care market is Europe's largest, supported by a well-funded national social insurance system that has shown resilience during economic downturns, including the pandemic. Long-term demographic trends - an ageing population and increasing proportion of elderly citizens - are driving sustained demand for stationary care capacity, increasingly provided by private operators. Alloheim's strong national market position enables the company to capitalise on these favorable long-term market trends. Peer Analysis Fitch rates Alloheim using the Healthcare Providers Navigator and compare it with other European private healthcare providers, including and hospital providers such as the French Almaviva Developpement (B/Stable), the Finish Mehilainen Yhtyma Oy (B/Stable) and the German Schoen Klinik SE (B+/Stable), as well as Median B.V. (B-/Positive), a German provider of medical rehabilitation and mental care services. Fitch also compares Alloheim with specialised healthcare providers, such as fertility clinic provider Inception Holdco S.a.r.l. (B/Stable), diagnostic testing providers Inovie Group (B/Stable), Ephios Subco 3 S.a.r.l (Synlab, B/Stable) and Laboratoire Eimer Selas (Biogroup, B/Stable), veterinary provider IVC Acquisition Midco Ltd (B/Stable) and dental care providers Romansur Investments SL (Donte, B/Stable) and Colosseum Dental Finance BV (B/Stable). Alloheim's EBITDA margin is aligned with that of Median, lower than those of Mehilainen, Almaviva and Schoen Klinik and materially lower than those of diagnostic testing providers. Alloheim's leverage and FCF margin have improved significantly in recent years, turning positive in 2025. Fitch expects its FCF margins to be aligned or even stronger than many peers', but its EBITDA leverage - at slightly above 7.0x - is still higher than its 'B' rated healthcare peers'. Fitch's Key Rating-Case Assumptions - Rise of revenue in 2025 by 11.8%, driven by the acquisition of Katharinenhof Group and by organic growth of 5.6% - Revenue growth averaging 7.5% during 2026-2029, supported by mid-single digit organic growth and acquisitions - Acquisitions of about EUR25 million annually during 2025-2029 - Fitch-defined EBITDA margin gradually expanding towards 10%- 10.5% by 2028-2029, from 9.6% in 2025 - Minimal working capital outflows of about EUR3 million - 5 million a year during 2026-2029 - Capex after lessor subsidies in the range of EUR28 million - 33 million a year during 2025-2029 - Issuance of new senior secured fixed- and floating-rate notes of EUR925 million - Redemption of the existing debt outstanding of EUR905 million, including the drawn part of a revolving credit facility (RCF) of EUR45 million - Transaction fees of EUR30 million Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): The business and financial profile factors (assessment, relative importance) are: management (b+, moderate), sector characteristics (bb, lower), market and competitive positioning (bb-, moderate), diversification and asset quality (b, moderate), company operational characteristics (bb, moderate), profitability (bb, moderate), financial structure (ccc+, higher), and financial flexibility (b, higher). The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025, and 40% each for the forecast years of 2026 and 2027. The governance assessment of 'good' results in no adjustment to the IDR. The operating environment assessment of 'aa-' results in no adjustment to the IDR. The SCP is 'b-'. Recovery Analysis The recovery analysis assumes that Alloheim would be considered a going concern (GC) in bankruptcy and that it would be reorganised rather than liquidated. This is supported by its leading position in a niche market, a long-term operating performance record and favourable secular trends. Fitch uses a GC EBITDA of EUR110 million, which would reflect material contraction in profitability and cash flow generation leading to an untenable leverage profile and putting at risk the sustainability of its business model. The assumption also reflects corrective measures taken in reorganisation to offset the adverse conditions that trigger the assumed default. Fitch applies 5.5x to GC EBITDA to calculate a post-reorganisation valuation, reflecting Alloheim's position as one of the leading private operators in the largest European healthcare market, which benefits from attractive long-term growth fundamentals and a stable and well-funded national social care system. This multiple is 0.5x lower than that of peers Median B.V. and Colosseum Dental Finance BV, both of which have better geographical diversification. Fitch assumes a 10% administrative claim. Fitch estimates the total amount of senior debt for creditor claims at EUR1,025 million, which comprises a proposed super senior RCF of EUR125 million that Fitch assumes to be fully drawn, and senior secured notes of EUR925 million. Fitch's waterfall analysis generates a ranked recovery for Alloheim's senior secured notes in line with a Recovery Rating of 'RR4', leading to a 'B-(EXP)' rating, which is the same as the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Threats to the business model resulting from adverse regulatory changes to public funding in the German care home market and a worsened macroeconomic environment - Declining EBITDA margin and consistently negative FCF leading to deteriorating liquidity and increased reliance on RCF use - EBITDAR leverage remaining at or above 8.0x - EBITDAR fixed charge coverage trending towards 1.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Continued stable German regulatory and macroeconomic environment - Improving FCF generation trending towards positive levels on a sustained basis - Expanding EBITDA profitability leading to EBITDAR leverage trending below 7.0x on a sustained basis - EBITDAR fixed charge coverage above 1.5x on a sustained basis Liquidity and Debt Structure At end-September 2025, Alloheim had Fitch-defined readily available cash of EUR76 million (after adjustment for restricted cash of EUR20 million). The group will not have any material upcoming debt maturities, following the proposed refinancing and issue of the new senior secured notes of EUR925 million due 2033. Expected sustainably positive FCF generation further strengthens its liquidity position. Moreover, the proposed RCF of EUR125 million due 2032 will provide additional support to Alloheim's liquidity. Alloheim's EUR925 million notes due 2033, however, will result in a concentrated capital structure. Issuer Profile Alloheim is the one of the largest private nursing care providers in Germany, operating 289 nursing homes at end-2025. =========== G R E E C E =========== TITAN GLOBAL: Fitch Rates New EUR350MM Unsecured Notes 'BB+' ------------------------------------------------------------ Fitch Ratings has assigned Titan Global Finance PLC's planned maximum EUR350 million notes a senior unsecured rating of 'BB+'. Fitch has also affirmed Titan S.A.'s Long-Term Issuer Default Rating (IDR) and existing senior unsecured notes' rating at 'BB+' with a Recovery Rating 'RR4'. The IDR Outlook is Positive. The rating action reflects the planned issue of new notes and acquisitions to be funded by a mix of debt and cash. Fitch views the acquisitions of France-based Vracs de l'Estuaire, Turkiye-based Traçim Cement and US-based Keystone Cement as complementary to Titan's operations. The rating is constrained by lower product and geographical diversification, a weaker market position globally and a smaller scale than higher-rated peers'. The Positive Outlook reflects Titan's improving scale and financial profile. Fitch expects EBITDA gross leverage to be below the positive rating sensitivity of 1.5x by end-2027, despite an increase in 2026 relative to Fitch's previous expectations. Key Rating Drivers Leverage Improvement: Fitch said, "We forecast Fitch-adjusted EBITDA gross leverage of 1.5x and 1.3x at end-2026 and end-2027, respectively, compared with about 1.1x-1.2x expected previously for the same period. The temporary increase reflects the announced acquisitions and notes, although we expect the solid acquired EBITDA and cost synergies to enable deleveraging from 2027." Fitch also expects the company to remain conservative in its capital-allocation strategy, by prioritising a strong balance sheet and organic growth supported by disciplined acquisitions over large shareholder distributions. Growth Accelerates Inorganically: Fitch forecasts the planned acquisitions will add approximately EUR300 million-350 million in revenue and EUR70 million-80 million of Fitch-adjusted EBITDA, even though Titan's scale remains small relative to higher-rated peers. The acquisitions will strengthen Titan's export capacity, presence in the respective markets and support its recently announced strategy to reach EUR4 billion in revenue and EUR1 billion in EBITDA by 2029. Fitch believes further acquisitions are likely to help the company meet these growth targets. Healthy Profitability: Fitch said, "We expect margins to continue to improve and be healthy between 22%-25% during 2025-2027, benefitting from the company's leading market position in its operating regions, operational efficiencies and EBITDA accretion from recent acquisitions. We expect EBITDA margins to be sustainable and comparable with the levels of higher-rated peers." Ongoing Capex: Titan continues to increase its capex, mainly on cost improvement through new technologies and product mix changes towards higher-margin products, capacity and storage expansion, plus supply-chain optimisation. Part of the planned high capex is also directed towards decarbonisation. High capex at 11%-14% of revenue during 2025-2027 will pressure free cash flow (FCF), although Fitch expects the latter to be sustainably positive at 2% of revenue and above in 2026-2027. Titan also has flexibility to reduce capex in economic downturns, which will help sustain FCF generation. IPO Completed: In February 2025, Titan raised USD393 million with the IPO of its US business on the New York Stock Exchange, with a minority stake of 13.3% of Titan America S.A. being sold and the rest held by Titan. The proceeds will be partly used by Titan to fund capex and acquisitions, with the rest distributed to shareholders. Fitch's rating case includes regular dividend payments to minority interests of up to EUR4 million a year, which will not have a material impact on the company's leverage. US Dominates Overseas Sales: Titan generated 57% of its revenue primarily from the US, which has a favourable market environment (particularly in the non-residential end-market) and strong underlying demand for building materials. It has established a production network in the US, with two cement plants and three import terminals supplying growing demand for cement in the US states it operates in. Sales volumes in the US are partly supported by cement imports from Titan plants in other regions, mainly Greece. Transportation costs may weigh on profitability, but this is mitigated by higher margins in the US than in Greece and other regions. Weaker Business Profile than Peers: Titan's business profile is sustainable, but weaker than some Fitch-rated peers'. The company has leading market positions in the regions where it operates but is less geographically diversified than larger peers and therefore has a weaker market position globally. In addition, Titan's product diversification is moderate, but weaker than that of higher-rated peers like Holcim Ltd, CEMEX, S.A.B. de C.V. and CRH Plc. Its smaller scale makes it a medium-sized manufacturer. Fitch considers Titan's pricing power to be moderate, but weaker than peers'. Moderate Diversification Beneficial: Titan's geographical diversification is moderate as it is spread across several regions with differing economic cycles. This helps balance out revenue generation and profitability through the cycle. The product portfolio is moderately diversified, with cement the main product at 57% of total revenue in 2024, while the rest was generated by heavy building materials like ready-mix concrete, aggregates and building blocks. Peer Analysis Titan is smaller than Martin Marietta Materials Inc (BBB/Positive) and CRH plc (BBB+/Stable), which have stronger market positions and wider production networks. Titan's product diversification is similar to that of CEMEX, S.A.B. de C.V. (BBB-/Stable) and Holcim Ltd (BBB+/Stable). In contrast to CRH, Martin Marietta and Vulcan Materials Company (BBB+/Stable), which are exposed largely to the US market, Titan also derives its revenue from Greece, Turkiye, Egypt and several southeastern European countries. However, Martin Marietta and Vulcan Materials are present across the US while Titan operates primarily in two states in America. Fitch expects Titan's EBITDA margins to improve towards 25% in 2028 from 22% in 2025, which will be comparable with Holcim's, close to Vulcan Materials' and above of those of CRH and CEMEX. Titan's expected EBITDA gross leverage at about 1.5x at end-2026 and 1.3x at end-2027 is lower than those of higher-rated peers such as Vulcan Materials (2.6x), Holcim (2.0x) and CEMEX (2.5x). Fitch's Key Rating-Case Assumptions - Revenue to rise 7% on average in 2026-2028, driven mostly by acquisitions and modest organic growth. This follows a low single-digit increase of revenue in 2025 due to pricing improvements -EBITDA margin increasing towards 25% in 2028, from 22% in 2025, driven by acquisitions synergies - Capex at 13% of revenue on average during 2026-2028, due to higher capital and energy-transition investments - Dividends payment at EUR95 million in 2026, EUR103 million in 2027, and above EUR110 million in 2028 - Share buybacks of about EUR12 million a year in 2026-2028 - Acquisitions of about EUR670 million in 2026 Corporate Rating Tool Inputs and Scores Business and financial profile factors (assessment and their relative importance) are: Management (bbb, lower), sector characteristics (bbb-, moderate), market and competitive positioning (bb, higher), diversification and asset quality (bb, moderate), company operational characteristics (bb, moderate), profitability (bbb+, higher), financial structure (a-, moderate), financial flexibility (bbb, moderate). The quantitative financial subfactors are based on customised Corporate Rating Tool financial period parameters: 20% weight for the forecast year 2025 and 40% weight each for the forecast years 2026 and 2027. The weakest link adjustment is applied, based on the market and competitive positioning factor at 'bb' and results in an adjustment of -1 notch to the IDR. The operating environment assessment of 'bbb-' results in no adjustment to the IDR. The SCP is at 'bb+'. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 2.5x on a sustained basis - EBITDA margin below 15% - FCF margin below 1% on a sustained basis Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - FCF margin consistently above 3% - EBITDA gross leverage below 1.5x on a sustained basis - EBITDA margin of 18% on a sustained basis - Improved business risk profile, reflecting increased product and geographical diversification Liquidity and Debt Structure At end-September 2025 Titan's Fitch-calculated available cash was about EUR337 million, excluding EUR55 million of not readily available cash to cover working-capital needs. Expected positive FCF generation in the next four years will support liquidity. In addition to a EUR230 million available revolving credit facility due 2030, the company has a committed undrawn facility of about EUR50 million with maturity of over one year. Liquidity is sufficient to cover short-term requirements. Issuer Profile Titan is a medium-sized building materials producer with a focus on cement production, which contributed about 57% of its revenue in 2024. RATING ACTIONS Entity / Debt Rating Recovery Prior ------------- ------ -------- ----- Titan S.A. LT IDR BB+ Affirmed BB+ Titan Global Finance PLC senior unsecured LT BB+ New Rating RR4 senior unsecured LT BB+ Affirmed RR4 BB+ ============= I R E L A N D ============= INVESCO EURO XII: S&P Affirms B-(sf) Rating on Class F Notes ------------------------------------------------------------ S&P Global Ratings assigned credit ratings to Invesco Euro CLO XII DAC's class A-1-R, A-2-R, B-R, C-R, and D-R notes. At the same time, S&P affirmed its ratings on the existing class X, E, and F notes and withdrew its ratings on the existing class A-1, A-2, B, C, and D notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. On Jan. 28, 2026, Invesco Euro CLO XII DAC refinanced the existing class A-1, A-2, B, C, and D notes (originally issued in June 2024) through an optional redemption and issued replacement notes of the same notional. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over Euro Interbank Offered Rate (EURIBOR) than the original notes. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,733.19 Default rate dispersion 717.19 Weighted-average life (years) 4.46 Obligor diversity measure 108.32 Industry diversity measure 25.03 Regional diversity measure 1.30 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 4.61 Actual target 'AAA' weighted-average recovery (%) 35.69 Actual target weighted-average spread (net of floors; %) 3.83 Actual target weighted-average coupon 4.24 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end on Jan. 15, 2029. The portfolio is well-diversified at closing, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR398.9 million adjusted target par collateral principal amount, which is lower than the target par amount of EUR400 million, and considers the negative cash balance in the transaction. "We used the portfolio's actual weighted-average spread (3.83%), actual weighted-average coupon (4.24%), and the actual portfolio weighted-average recovery rates (WARR) for all rated notes. "We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R, C-R, D-R, and E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these refinanced notes. "For the class X, A-1-R, and A-2-R notes, our credit and cash flow analysis indicate that the available credit enhancement could withstand stresses commensurate with the assigned ratings. "For the class F notes, our credit and cash flow analysis indicates 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 S&P has rated and that has recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P said, "Our model generated break-even default rate at the 'B-' rating level of 22.96% (for a portfolio with a weighted-average life of 4.46 years), versus if we were to consider a long-term sustainable default rate of 3.2% for 4.46 years, which would result in a target default rate of 14.27%." -- 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. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class X, A-1-R, A-2-R, B-R, C-R, D-R, E, and F 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-1-R to E-R notes based on four hypothetical scenarios." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings assigned Replacement Original Credit Amount notes notes enhancement Class Rating* (mil. EUR) interest rate§ interest rate† (%) A-1-R AAA (sf) 236.00 3m Euribor 3M Euribor 40.83 + 1.26% + 1.46% A-2-R AAA (sf) 12.00 3m Euribor 3M Euribor 37.82 + 1.68% + 1.75% B-R AA (sf) 44.00 3m Euribor 3M Euribor 26.79 + 1.95% + 2.25% C-R A (sf) 22.10 3m Euribor 3M Euribor 21.25 + 2.25% + 2.85% D-R BBB- (sf) 28.60 3m Euribor 3M Euribor 14.08 + 3.75% + 4.10% Ratings affirmed Amount Class Rating* (mil. EUR) Notes interest rate § X AAA (sf) 0.67 3m Euribor + 0.50% E BB- (sf) 17.30 3m Euribor + 7.01% F B- (sf) 12.80 3m Euribor + 8.37% *The ratings assigned to the class X, A-1-R, A-2-R, and B-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, 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. MADISON PARK VII: Fitch Affirms B+sf Rating on Class F Notes ------------------------------------------------------------ Fitch Ratings has revised the Outlooks on Madison Park Euro Funding VII DAC's class E and class F notes to Negative from Stable. All notes have been affirmed. RATING ACTIONS Entity / Debt Rating Prior ------------- ------ ----- Madison Park Euro Funding VII DAC A XS1822369341 LT AAAsf Affirmed AAAsf B-1 XS1822370273 LT AA+sf Affirmed AA+sf B-2 XS1823155756 LT AA+sf Affirmed AA+sf B-3 XS1823157299 LT AA+sf Affirmed AA+sf C-1 XS1822370869 LT A+sf Affirmed A+sf C-2 XS1823158180 LT A+sf Affirmed A+sf D XS1822371594 LT BBB+sf Affirmed BBB+sf E XS1822372139 LT BB+sf Affirmed BB+sf F XS1822372568 LT B+sf Affirmed B+sf Transaction Summary Madison Park Euro Funding VII DAC is a cash flow CLO comprising mostly senior secured obligations. The transaction is managed by Credit Suisse Asset Management Limited and exited its reinvestment period in August 2022. KEY RATING DRIVERS Increasing LDA: The Negative Outlooks on the class E and F notes reflect the increase in exposure to assets with a maturity beyond the legal final maturity of the transaction (long-dated assets; LDA) Fitch calculates that LDA increased to 9.9% in December 2025 due to maturity extensions, from 0.1% at the last review in February 2025. According to its criteria, Fitch deems LDA expose the notes to market value risk and assumes they are subject to a fire sale prior to or at the last payment period, with the notes receiving only the assumed recovery value. Unlike recent CLOs, the transaction documentation does not envisage any haircut in the adjusted collateral principal amount used to calculated the coverage tests. Performance and Refinancing Risk: The Negative Outlooks on the class E and F notes also reflect exposure to EUR9.5 million of defaulted assets, a par erosion of 2.9% and near- and medium-term refinancing risk (with about 16.2% of assets maturing between 2026 and 2027). This may lead to further deterioration in the portfolio, resulting in the risk of downgrades for the notes although within their current rating category. Senior Notes Benefit from Cushion: The ratings and Outlooks on the class A to D notes are driven by the large default-rate buffers to support their ratings and should be capable of absorbing further defaults in the portfolio. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The weighted average rating factor of the current portfolio is 25.8 as calculated by Fitch under its latest criteria. About 21.2% of the portfolio is currently on Negative Outlook. High Recovery Expectations: Senior secured obligations comprise 98.2% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio is 58% Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 21.4%, and no obligor represents more than 2.7% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 30.05% as calculated by Fitch. Fixed-rate assets are reported by the trustee at 6.1%, currently complying with the limit of 12.5%. Transaction Outside Reinvestment Period: Most senior notes are deleveraging, leading to increased credit enhancement from closing in May 2018, despite the portfolio erosion. The manager can reinvest unscheduled principal proceeds and sale proceeds from credit-improved or -impaired obligations after the reinvestment period, subject to compliance with the reinvestment criteria. The transaction is failing the Fitch WARF test and the WAL test but the manager can reinvest proceeds on a maintain-or-improve basis. It is also failing another rating agency's WARF test but the manager may still be able to reinvest if the tests are cured after reinvestment. Given the manager's ability to reinvest, Fitch's analysis is based on a stressed portfolio using its collateral quality matrices specified in the transaction documentation. Fitch used the matrices with top 10 obligor limits of 20% and 16%. Fitch also applied a haircut of 1.5% to the WARR as the calculation of the WARR in the transaction documentation is not in line with its latest CLO Criteria. Cashflow Analysis: Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par-value and interest-coverage tests. Deviation from MIR: The class E and F notes' ratings are two notches above their model-implied ratings (MIR), reflecting Fitch's view that the remaining transaction life provides the manager with flexibility to sell LDA, limiting potential trade losses. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. The class E and F notes may be downgraded unless the manager sells the LDAs prior to the legal final maturity without significant trading losses. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may occur on stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. PUBLIC POWER: S&P Affirms 'BB-' ICR & Alters Outlook to Positive ---------------------------------------------------------------- S&P Global Ratings revised the outlook on Greece-based integrated power utility Public Power Corp. (PPC) to positive from stable. The positive outlook on the issuer credit rating indicates that S&P expects PPC will continue to deliver on its strategic plan by successfully exiting lignite by end of 2026 and increase its renewable installed capacity while maintaining S&P Global Ratings-adjusted FFO to debt sustainably above 15% over the plan. S&P said, With its updated 2026-2028 strategic plan published in November 2025, Greece-based integrated power utility Public Power Corp. (PPC) confirmed it will exit lignite by end-2026 while increasing renewable capacity, which we view in line with PPC's business transition that started in 2019. We see this as a significant derisking of the business risk profile, although it remains constrained by its activity in higher risk countries such as Greece and Romania. "We expect PPC's adjusted EBITDA to reach EUR2.9 billion in 2028 from EUR2 billion expected in 2025, notably thanks to growth in renewables and networks and adjusted funds from operations (FFO) to debt remaining sustainably above 15% providing a significant buffer at the current rating, despite the acceleration in net capital expenditure (capex) which will average EUR3.0 billion-EUR3.5 billion annually over 2026-2028. "We view PPC's successful transition toward more renewable generation and supportive regulated operations as improving its business risk profile. PPC's 2025 Capital Market Day reiterated the company's goal to transition to green energy while exiting this year from lignite power plants and the heavy investments in renewable capacity so that there is 77% of renewables in PPC's Greek electricity mix by 2030 (up from 58%). To reach these targets, we expect PPC to install 6.0 gigawatt (GW)-6.5 GW of installed capacity in Greece and Southern Europe over 2026-2028 so that its total renewable capacity (including hydro) reaches 12.7 GW by 2028 from 6.4 GW as of Sept. 30, 2025, and to develop 1.8 GW of flexible generation including hydro power plants and gas units to compensate for renewable generation variability. On top of this, we expect PPC to reduce its remaining thermal generation so that it reaches an 85% drop in scope 1 carbon dioxide emissions by 2028 from 2019 levels. In terms of networks, supportive regulatory frameworks combined with investments to increase the Regulated Asset Base (RAB) should improve PPC's remuneration so that networks EBITDA reaches EUR950 million by 2028 from the EUR790 million expected in 2025. We anticipate that PPC's combined RAB (including power distribution assets in Romania) will reach about EUR6.5 billion by 2028, an about 7% compound annual growth rate over 2025-2028. Due to its successful operational shift combined with its size and geographical diversification, we now view PPC's business risk profile stronger than that of peers such as Hrvatska Elektropriveda d.d. (HEP) although remaining within the fair category. "By the end of the plan, we expect PPC's S&P Global Ratings-adjusted EBITDA to reach EUR2.9 billion; more than doubling compared to 2023 levels emphasizing PPC's size compared to peers. We expect PPC's 2025 EBITDA to reach EUR2 billion up from EUR1.2 billion in 2023 notably driven by improvements in the integrated business. By 2028, we expect PPC's integrated EBITDA to increase about 95% to EUR2 billion from EUR1 billion in 2024 notably driven by higher efficiencies, as well as increase in renewable installed capacities mostly supported by power purchase agreements. We also anticipate that annual RAB growth as well as cost recoveries in both Greek and Romanian regulatory frameworks will enable PPC's distribution EBITDA to reach EUR950 million by 2028 from EUR790 million expected in 2025 ensuring that the group's total EBITDA more than doubles by 2028 to EUR2.9 billion from EUR1.2 billion in 2023 which is about 480% higher than that of Croatia-based HEP and 60% higher than that of Hungary-based MVM Energy Private LLC. In addition, and compared to peers, PPC's operations are spread across two countries (Romania and Greece) throughout the entire value chain enabling PPC to diversify its activities, which we view as positive while peers are focused on a single market. "PPC will maintain some credit headroom in 2026-2028, despite increasing capex and relatively aggressive dividend policy. We expect PPC to invest, on average, EUR3.6 billion annually over 2026-2027. By 2027, we also expect RWE and PPC to split the total assets built through their JV in two sets ensuring that each entity owns 51% of one set. In our view, this should further boost PPC's EBITDA generation while the impact on the debt side should be mitigated because we expect the JV's total debt to amount to EUR0.8 billion by 2027 (EUR0.2 billion being PPC's 51% ownership of one set). This is because the JV mostly builds solar power plants which require lower investments and related debt than other technologies. Despite increasing capex, higher EBITDA, and tighter working capital management--stronger cash collection and lower bad debt should enable PPC to report negative free operating cash flow of less than EUR1.3 billion over the next two years. Combined with about EUR300 million-EUR400 million annual cash outflow for shareholder remuneration (including dividend payments and share buyback), which we view as relatively aggressive compared to peers, we anticipate that PPC's adjusted debt will increase to about EUR13 billion in 2027 from an expected EUR9.5 billion-EUR10.0 billion in 2025. This should translate into S&P Global Ratings-adjusted FFO to debt sustainably above 15%, well above our downside threshold of 12% and S&P Global Ratings-adjusted debt to EBITDA of about 5.0x over the plan, in line with PPC's financial policy of reported net debt to EBITDA below 3.5x. "We think that there is a moderately high likelihood that PPC would receive timely and sufficient extraordinary support from the government. PPC is the dominant Greece-based power generator and supplier, and the monopoly power distributor in the country. In our view, the Greek government would support PPC if needed, based on its 35.3% ownership of the company, the importance of the company for the Greek economy, and the strategic alignment between PPC and Greece's energy transition policy. While we observe reduced influence from the Greek state over the company's ongoing decisions and day-to-day management, the state maintains control over key strategic decisions, for which a large majority vote is required. Furthermore, the Greek government continues to guarantee some of PPC Group's debt. Our rating on PPC therefore includes one notch of uplift for extraordinary support relative to PPC's stand-alone credit profile (SACP) of 'b+'. "The positive outlook reflects our view that PPC will successfully exit lignite by end of 2026 and expand its renewable asset base while maintaining FFO to debt sustainably above 15%. "We could revise the outlook to stable if we see material delays in delivery of the business plan or if we view FFO to debt materially decreasing toward 12%. A one notch rating downgrade of Greece to 'BBB-' would not impact our rating on PPC." An upward revision of the SACP to 'bb-' would depend on: -- Successful implementation of the strategic plan demonstrated by full closure of lignite plants while commissioning of new renewable capacities; and -- Strong credit metrics, such as FFO to debt sustainably above 15%. A one notch rating upgrade of Greece to 'BBB+' would not impact S&P's rating on PPC. ========= I T A L Y ========= FABBRICA ITALIANA: Fitch Hikes LongTerm IDR to B+, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has upgraded F.I.S. Fabbrica Italiana Sintetici S.p.A.'s (FIS) Long-Term Issuer Default Rating (IDR) to 'B+' from 'B' and its EUR350 million senior secured notes to 'BB-' from 'B+'. The IDR Outlook is Stable. Fitch has also assigned a 'BB-(EXP)' expected rating to FIS's proposed EUR750 million senior secured notes. The Recovery Rating is 'RR3'. The upgrade reflects Fitch's view that FIS will continue to deliver solid organic growth and profitability improvements, leading to a reduction in EBITDA leverage towards 4.0x from 2027, after a temporary increase to 4.4x in 2026 due to the proposed refinancing with re-leveraging. It also reflects Fitch's view that free cash flow (FCF) before expansion capex has turned sustainably positive from 2025, assuming working-capital management remains tight. The Stable Outlook is predicated on FIS's well-established position in the non-cyclical and growing European contract development and manufacturing organisation (CDMO) market, solid manufacturing base, balanced by modest scale and product and customer concentration. Key Rating Drivers Proposed Refinancing Temporarily Increases Leverage: FIS has launched EUR750 million senior secured notes to refinance its EUR350 million senior secured notes and EUR50 million private loan maturing in August 2027 as well as to distribute up to EUR312 million to its shareholders. The transaction will temporarily raise leverage to 4.4x in 2026, from a very low 2.9x estimated for 2025. Fitch projects ongoing margin expansion in 2027-2029 to contribute to deleveraging to below 4.5x, which is commensurate with a 'B+' rating. Fitch expects FIS to adhere to a conservative financial policy, pursuing M&A opportunities that do not result in a permanent leverage increase and that support its deleveraging trajectory. Organic Deleveraging Prospects: Fitch expects EBITDA leverage to reduce towards 4.0x in 2027, driven by mid-to-high single-digit revenue growth and further EBITDA margin expansion towards 21% (2025E: 19.9%), due to strong organic growth in the high-margin custom business division and new cost-efficiency measures. Revenue expansion will be driven by higher volumes and a favourable product mix, led by increased sales in the anti-diabetic and weight loss franchise in multiple presentations, which will also drive margin gains alongside efficiency measures. The Stable Outlook reflects Fitch's expectation of continued organic deleveraging potential to below 4.0x by 2029, resulting in leverage being comfortably within Fitch's sensitivities for a 'B+' rating. FCF Generation Supports Rating: The IDR upgrade reflects Fitch's estimation that FCF before expansion capex has become sustainably positive from 2025, supported by revenue growth and profitability improvement, alongside more efficient working-capital management. Expansion capex will peak in 2027, resulting in FCF being near break-even that year, before starting to improve by 2029. Sustained positive FCF, along with low leverage and a conservative financial policy, are the main considerations for a rating upgrade to 'B+ '. Comfortable Liquidity: High working-capital requirements and capex intensity have historically constrained FCF. FIS has been optimising working-capital management, including financing from customers to cover upfront costs of raw materials, over the past two years. Continued optimisation should help further improve working-capital efficiency, supporting positive FCF generation before expansion capex until 2029. Strong operating performance, efficient working-capital management and temporarily increased but manageable capex, should help build up cash for reinvestment. Fitch assumes small M&A in 2026-2029, which is not included in the company's business plan, to be financed from internally generated cash. Strong Revenue Visibility: FIS has a well-established position in a non-cyclical and growing market and strong revenue visibility. FIS, as a CDMO of active pharmaceutical ingredients (API) for small molecules, benefits from long-term contracts with profitable clients that have high switching costs and focus more on reliability of supply than on costs. Setting up a contract manufacturer requires large capex, technical knowledge, regulatory approvals and time to build reputation. These factors, alongside the long life cycle of pharma products, translate into high revenue visibility. Modest Scale, High Product Concentration: FIS's rating is constrained by its small scale, although it has materially increased in the last four years, and high product and customer concentration. Fitch expects strong growth in the GLP-1 franchise, its largest revenue-generating therapeutics, over the medium term. Fitch estimates GLP-1 sales in 2025 were over 20% of total across multiple customers and will expand as the GLP-1 pill is approved and launched in Europe. Revenue is subject to some volatility as it relies on the commercial success of target drugs, pricing pressures from regulatory bodies, generic pressures from other GLP-1 presentations, and potential loss of key contracts. Supportive Market Fundamentals: FIS's credit profile benefits from the supportive fundamentals of the broader pharmaceuticals market, with non-cyclical volume growth driven by growing and ageing populations and increasing access to medical care. Fitch expects the API CDMO market to grow at mid-to-high single digits until 2033. FIS is well- placed to capitalise on the trend for outsourcing of non-core and technologically complex processes, particularly as a main supplier of GLP-1 molecules, which in Fitch's view offers potential for diversification and profitability improvement. FIS may benefit from increased local production of APIs. Peer Analysis Fitch said, "We regard capital- and asset-intensive businesses such as Roar Bidco AB (Recipharm; B/Stable), Kepler S.p.A. (Biofarma, B/Stable) and European Medco Development 3 S.a.r.l. (Axplora; B-/Stable) as FIS's closest peers as they all rely on investments to grow at or above market and to maintain or improve operating margins." FIS is smaller than Recipharm, but this is balanced by its modest leverage with expected EBITDA leverage at 4.6x after the notes issue versus an expected 6.0x at Recipharm by end-2025, warranting the higher rating for FIS. Axplora and Biofarma benefit from their more niche market positions, driving structurally higher profitability. Biofarma's considerably smaller scale than all its peers and inorganic growth strategy constrain its rating. Axplora's rating is limited by its recent loss of key contracts and high leverage. In the wider Fitch-rated pharmaceutical portfolio, Fitch compares FIS with a generic drug manufacturing company, Nidda BondCo GmbH (Stada; B/Stable), which is much larger and has stronger profitability, but these factors are offset by a more aggressive financial policy, resulting in higher leverage for the former. Fitch's Key Rating-Case Assumptions - High single-digit revenue growth in 2025, followed by mid-to-high single digits in 2026-2029 - Fitch-defined EBITDA margin close to 20% in 2025, continuing its improvement to above 22% by 2029 - Working capital inflow in 2025-2027, on improved inventory management and reduced factoring use. Fitch expects working-capital requirements to continue to grow from 2027 as the business continues to expand - Capex increasing to above EUR100 million-110 million in 2025-2029, from EUR61 million in 2024, as the company invests in its facilities - Total acquisitions of EUR80 million in 2026-2029 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): The business and financial profile factors (assessment, relative importance) are management (bb-, moderate), sector characteristics (bbb, lower), market and competitive positioning (b+, higher), diversification and asset quality (b+, moderate), company operational characteristics (bb, moderate), profitability (bbb-, moderate), financial structure (b+, higher), and financial flexibility (bb, moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 15% weight for the historical year 2025, 35% weight for the forecast year 2026, and 25% each for the forecast years of 2027 and 2028. A weakest link consideration adjustment is applied based on the market and competitive positioning factor due to portfolio concentration risks, resulting in an adjustment of -1 notch to the IDR. The governance impact assessment of 'good' results in no adjustment to the IDR. The operating environment impact assessment of 'bbb' results in no adjustment to the IDR. The SCP is 'b+'. Recovery Analysis FIS's recovery analysis is based on a going-concern (GC) approach, reflecting Fitch's view that despite the company's valuable asset base, a GC sale of the business in financial distress would yield a higher realisable value for creditors than a balance-sheet liquidation. In Fitch's view, financial distress could arise primarily from sharp revenue and margin contraction, following volume losses or price pressure related to contract losses and exposure to generic competition. Fitch said, "We assumed a post-restructuring EBITDA of about EUR125 million, up from EUR100 million, to calculate the GC enterprise value (EV). This reflects Fitch's expectation of organic portfolio earnings after distress, possible corrective measures and a 5.5x distressed EV/EBITDA. In Fitch's view, the latter would appropriately reflect FIS's minimum valuation multiple before considering value added through portfolio and brand management. The recovery multiple is in line with that of CDMO peers like Biofarma and Axplora, and below the 6.0x of Recipharm, reflecting the more specialised production the latter engages in." Fitch said, "Our principal waterfall analysis generated a ranked recovery in the 'RR3' band, resulting in a senior secured debt rating of 'BB-', for the EUR350 million (accounting for EUR50 million privately placed notes ranking pari passu with the notes), after deducting 10% for administrative claims. The recovery of the instruments is capped at 'RR3' due to the jurisdiction in Italy. The new senior secured debt of EUR750 million will be rated at 'BB-'/'RR3'." Fitch said, "In our debt waterfall, we treat EUR10 million in short-term local lines and its proposed EUR160 million super senior revolving credit facility (RCF), which we assume to be fully drawn prior to distress, both as super-senior. Outstanding factoring is partially excluded from the waterfall analysis as we assume the facility would remain at least partially available at times of distress, given the high quality of the receivables." RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A more aggressive financial policy leading to EBITDA leverage above 4.5x on a consistent basis - Inability to execute its profitable organic growth strategy, coupled with volatile working capital outflows and increased capex requirements that lead to a deterioration of FCF generation - EBITDA interest coverage below 3.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch said, "We do not envisage an upgrade to the 'BB' rating category in the medium term until FIS improves its scale and diversifies its product portfolio while maintaining profitable growth. conservative leverage policy leading to EBITDA leverage below 3.5x on a sustained basis and FCF margins consistently in the mid-single digits." Liquidity and Debt Structure At end-September 2025, FIS had EUR135 million of cash available for debt repayment (excluding EUR20 million Fitch-defined restricted cash), and full availability under its committed RCF. Fitch forecasts FCF to generate enough cash to fund its heavy investment cycle to 2029. The proposed refinancing will further strengthen the company's liquidity profile as it extends its maturity to 2031 and increases RCF to EUR160 million, which Fitch expects to be fully available at the new issue closing. Issuer Profile FIS is a CDMO that specialises in the production and development of API. The business is organised into custom products (62% of XXM25 revenue), established products (35%) and R&D services (3%). RATING ACTIONS Rating Prior ------ ----- F.I.S. Fabbrica Italiana Sintetici S.p.A. LT IDR B+ Upgrade B senior secured LT BB-(EXP) Expected Rating RR3 senior secured LT BB- Upgrade RR3 B+ ITALMATCH CHEMICALS: Fitch Rates New 5-Yr. EUR690MM Notes 'B(EXP)' ------------------------------------------------------------------ Fitch Ratings has assigned Italmatch Chemicals S.p.A.'s proposed five-year EUR690 million notes, split between fixed and floating rates, an expected senior secured rating of 'B(EXP)' with a Recovery Rating of 'RR4'. Fitch has also affirmed Italmatch's Long-Term Issuer Default Rating (IDR) at 'B' with Stable Outlook. The notes proceeds will refinance the company's EUR690 million notes maturing in 2028. Italmatch concurrently expects to increase its revolving credit facility (RCF) to EUR117 million and extend its maturity. The assignment of final ratings is contingent on the placement of the notes with final documents materially conforming with the information received by Fitch. Italmatch's IDR reflects its high leverage and modest scale, balanced by its business diversification and specialty chemical focus. It also incorporates contributions from acquisitions, healthy liquidity, and manageable refinancing risk by 2028. Key Rating Drivers Resilient Business Performance: Fitch said, "We estimate Italmatch's EBITDA fell about 2% in 2025, with a similar drop in revenue, yielding a Fitch-adjusted EBITDA margin of 17.5%. Its 9M25 EBITDA has remained resilient compared with most chemical producers, attributable to its specialty product focus, strong product differentiation, and diversified business model, factors that have collectively supported the preservation of robust profit margins despite challenging market conditions." Strong Unit Contribution Margin: Italmatch's volumes fell 9% during 9M25, partly driven by an uncertain macro economic environment and a temporary production pause at Zuera. Nevertheless, its unit contribution margin is strong, increasing to EUR1,052/ton in 9M25 from EUR1,041/ton in 9M24. This improvement demonstrates the company's successful strategic focus on high-value products and specialty mix, backed by ongoing 'operational excellence' initiatives. Its ability to strengthen unit economics despite falling volume underscores both the quality of Italmatch's product portfolio and its pricing power within specialty segments. Moderating Leverage: Fitch said, "We estimate EBITDA gross leverage at 6.5x in 2025, which remains high and above the negative rating sensitivity, and EBITDA net leverage at 5.3x due to a large cash balance. Fitch anticipates leverage metrics to fall below the negative rating sensitivity of 6.0x by 2026 and decline further to about 5.3x by 2028. The company has publicly set a net leverage target of 4.0x-5.0x. We expect Italmatch to be able to delay growth projects to achieve its net debt target of below 5x EBITDA, in the event of earnings underperformance." Limited Tariff Risks, Mitigated Costs: Fitch said, "We view the US tariff threat facing Italmatch as manageable, given its global presence, including assets in the US, and primary target audience of local customers with limited direct exposure to international trade, although they could be indirectly affected by reduced trade flows down the value chain or lower GDP growth. The company expects no adverse impact, as costs have been largely offset through supplier agreements and pass-through mechanisms to customers, as reflected by its stable unit contribution margin." Strategic Value-Driven M&As: Fitch said, "Italmatch follows a disciplined acquisition strategy focused on value creation and operational synergies. It acquired Alcolina in 2024, despite its net leverage being above its target of 4x-5x, due to adequate valuation and synergies with its existing business. We expect Italmatch to maintain its opportunistic yet selective approach, prioritising small bolt-on acquisitions that complement its pipeline of internal growth initiatives and potential greenfield/brownfield investments. We have incorporated some bolt-on acquisitions in our forecasts, which will contribute about EUR15 million in additional EBITDA by 2028, bringing total EBITDA to EUR141 million." Sustainability Growth Prospects: Italmatch is in a strong position to leverage sustainability trends. Its offerings in water solutions contribute to advancements in reverse osmosis water desalination, which help combat water scarcity, and support geothermal energy and precious metal recovery. It has also developed specialised flame retardants for photovoltaic applications and lubricant additives for use in wind turbine gear oil applications. Diversified Specialty Company: Italmatch's differentiated product offering underpins its long-term relationships with a variety of large key customers, averaging between 15 and 20 years, allowing EBITDA margin to remain consistently above 15%. It has deep knowledge of phosphorus chemistries to address different end-markets, such as industrial water treatment and desalination, geothermal and mining, plastics or lubricants manufacturing, oil drilling, and personal care ingredients. Its industrial footprint is spread across Europe, North and Latin America, Middle East and Asia with flexible plants capable of producing various product ranges. High Barriers to Entry: Italmatch operates in niche markets with limited competition. Fitch sees high barriers to entry in its niche markets, as the company specialises in products with differentiated or bespoke properties, or those that are key in the manufacturing process of a final product. Italmatch works alongside many of its customers to develop bespoke products, creating a longstanding relationship with them. Peer Analysis Italmatch is considerably smaller and less diversified and has lower profit margins and greater cash flow volatility than the pure specialty chemical manufacturer Nouryon Limited (B+/Stable). Italmatch is dedicated to specialty chemicals with steady demand but is more exposed to cyclical end-markets than Nouryon. Italmatch's leverage is also higher than Nouryon's. Italmatch is much smaller, less diversified and has lower leverage than, but similar end-market exposure to Envalior Finance GmbH (B/Negative). Italmatch is more focused on specialty chemicals, which translates into lower cash flow volatility, and Fitch projects its EBITDA gross leverage to be lower in 2025-2028. Fitch's Key Rating-Case Assumptions - Volumes to grow by 2% in 2026, 1% in 2027 and 3.5% in 2028, after declining high single digit in 2025 - Average selling price remaining broadly stable to 2028, after declining 1% in 2025 - EBITDA margin recovering to 17.5%-19% in 2025-2028, from 17% in 2024, as volume growth and steady unit margins offset fixed-cost inflation - Capex at 5% of sales in 2025-2028, including growth projects - No dividends - Bolt-on acquisitions of EUR15 million-20 million a year in 2026-2028 Corporate Rating Tool Inputs and Scores Fitch scored Italmatch as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): The business and financial profile factors are assessed (in the format of the 'assessment', followed by relative importance) as follows: management ('bb-', moderate), sector characteristics ('bb+', moderate), market and competitive positioning ('b+', higher), diversification and asset quality ('bb+', moderate), company operational characteristics ('bb', moderate), profitability ('bbb+', lower), financial structure ('b-', higher), and financial flexibility ('b-', moderate). The quantitative financial subfactors are assessed based on customised financial period parameters of 10% weight each for the latest historical years of 2024 and 2025, 30% each for the forecast years of 2026 and 2027 and 20% for the forecast year 2028. The governance assessment of 'good' results in no adjustment to the IDR. The operating environment assessment of 'a' results in no adjustment to the IDR. 'B+' to 'CC' considerations apply in Fitch's analysis and result in no adjustment to the IDR. The SCP is 'b'. Recovery Analysis The recovery analysis assumes Italmatch would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Fitch said, "Our GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which we base the enterprise valuation. The GC EBITDA of EUR100 million reflects a weak macro environment negatively affecting volumes in key cyclical end-markets, a competitive environment driving prices lower, and moderate corrective actions." Fitch uses a multiple of 5x to estimate a GC enterprise value for Italmatch because of its focus on specialty chemicals that translates into moderate volume and margin volatility. It also captures the company's diversified business profile and modest scale. Fitch assumes its non-recourse factoring would be replaced by super senior debt in the event of financial distress, which is deducted from the value available for creditor claims distribution. Fitch further assumes Italmatch's revolving credit facility (RCF) to be fully drawn and to rank super senior, along with debt at Italmatch's unrestricted operating entities. Fitch's analysis, after deducting 10% for administrative claims, resulted in a waterfall-generated recovery computation for the senior secured instruments in the 'RR4' band, indicating a 'B' rating for the existing notes and a 'B(EXP)' rating for the proposed notes. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 6x on a sustained basis - EBITDA interest coverage below 1.5x on a sustained basis - Weakening pricing power negatively affecting margins at times of raw material cost inflation Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 4x on a sustained basis - EBITDA interest coverage above 3x on a sustained basis - A material increase in scale through entry in new markets or expansion of market share Liquidity and Debt Structure Italmatch had EUR122 million in cash at end-September 2025 with its EUR107 million RCF undrawn. This provides comfortable flexibility for growth projects or acquisitions, as most of its debt is due in 2028 with no mandatory amortisation. The RCF expires in October 2027. Refinancing its notes and RCF, which was also upsized to EUR117 million, will improve liquidity while pushing maturities out to 2031 and 2030, respectively. Issuer Profile Italmatch is a producer of specialty chemicals used in various applications such as water treatment, lubricants or flame retardants, and has been majority-owned by Bain Capital since 2018. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- Italmatch Chemicals S.p.A. LT IDR B Affirmed B senior secured LT B(EXP) Expected Rating RR4 senior secured LT B Affirmed RR4 B NEXTURE SPA: Fitch Affirms 'B+' IDR & Rates New Notes 'B+(EXP)' --------------------------------------------------------------- Fitch Ratings has affirmed Nexture S.p.A.'s Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also placed Nexture's EUR425 million senior secured notes (SSNs) - rated at 'BB-' with a Recovery Rating of 'RR3' - on Rating Watch Negative (RWN) and assigned its EUR475 million new SSN an expected rating of 'B+(EXP)' with a Recovery Rating of 'RR4'. The RWN reflects weaker recovery prospects following the transaction and an increase in its revolving credit facility (RCF). Nexture's IDR reflects its moderate scale and product diversification, mitigated by its well-established European market positions, longstanding customer relationships and a broad distribution network. The rating also reflects higher EBITDA margins and still moderate leverage after acquisitions. The Stable Outlook reflects manageable execution risk around integrating the Frulact and Sipral acquisitions. The assignment of final rating is contingent on the receipt of final documents conforming to information already reviewed. Key Rating Drivers Enhanced Diversification and Scale: Fitch said, "We expect the acquisitions of Frulact and Sipral to strengthen Nexture's business profile by widening its geographical and product diversification and increasing its scale with EBITDA rising towards EUR200 million by 2027, from an estimated EUR100 million for 2025. We expect Nexture will gain more exposure to the attractive US market after the acquisitions and the group plans to further expand in rapidly growing China and the Middle East regions, even though Europe will remain the dominant region for the group (2026F: 85% of total revenue)." Nexture's credit profile will also benefit from a broadened product range across fruit-based, nut-based specialty ingredients, creams and fillings, with an increasing share of high-value added products towards 70% of revenue after the acquisitions. Robust Business Model: Nexture is an integrated supplier of bakery, dairy and confectionary ingredients to the traditional bakery channel, industrial producers and trade in Europe. Its market positions are supported by a portfolio of established brands, solid in-house R&D, an extensive distribution network and longstanding customer relationships. The business is exposed to changing consumer sentiment, demand volatility, challenges in cost control, commodity price volatility and stiff competition in the fragmented home and overseas markets. Supplier concentration is moderate, with the top 10 suppliers representing 25% of cost of goods sold. Moderate Integration Risks: Fitch said, "We see moderate execution risks stemming from the ongoing integration of CSM Ingredients and Italcanditi and the announced acquisitions. We expect that a combination of procurement, manufacturing and distribution platforms, alongside a wider assortment of products and cost optimisation, and a strategic shift towards higher-margin value-added products, will create sustainable organic growth in the mid-single digits and EBITDA margin expansion. We expect enhanced cross-selling opportunities following the acquisitions to add to the group's organic growth potential." Contained Credit Metrics, Deleveraging Trajectory: The rating is underpinned by Nexture's moderate credit metrics. Fitch said, "We forecast Fitch-defined EBITDA leverage increasing to 5.3x at end-2026 (2025E: 4.7x), following the Frulact and Sipral acquisitions before gradually declining towards 4.0x by end-2028. We expect deleveraging to be mainly driven by EBITDA growth, supported by organic revenue growth and profitability expansion from cost optimisation and synergies. The fragmented market offers ample scope for M&A activity, but frequent, large debt-funded acquisitions could hinder deleveraging and put pressure on Nexture's ratings." Healthy Organic Revenue Growth: Fitch said, "We assume mid-single digit organic revenue growth for 2026-2028, supported by volume growth of valued-added products, cross-selling opportunities from new acquisitions, rising demand for health and tailored nutrition and upside from expansion in the US, China and Middle East markets. In addition, revenue growth will be supported by sustained premiumisation of ingredients and inflation-driven price increases." Acquisitions Boost Margins: Fitch said, "We forecast Nexture's EBITDA margin to increase to 14% in 2026 and towards 16% by 2028, driven by the margin-accretive acquisitions of Frulact and Sipral (with EBITDA margins of about 17%-18%), and anticipated cost synergies. Nexture outperformed Fitch's expectations in EBITDA margin expansion after its Italcanditi purchase in July 2025, which we estimate to have risen to 12.1% for the year from a pro-forma 9.7% in 2024, underlining its strong integration record. Nexture benefits from a flexible cost structure, with variable costs at 75% of operating costs, while the rest is exposed to commodity volatility with lags in cost pass-through to customers." Positive FCF: Fitch said, "We forecast FCF margins to be consistently positive at 4%-6% in 2027-2028, driven by operating profit margin improvements, manageable interest expenses, limited working capital outflows and moderate capex requirements at 2%-3% of revenue. We expect excess cash to be reinvested in the business, with annual bolt-on M&A assumed at EUR35 million from 2027." Peer Analysis Nexture has comparable product portfolio and geographical diversification to Nomad Foods Limited (BB/Stable). However, Nomad Foods' larger scale of branded and private-label frozen food, higher profitability and stronger cash generation result in its two-notch higher rating. The latest acquisitions will broadly align Nexture's business profile and profitability with that of Sammontana Italia S.p.A. (B+/Stable), with comparable scale, product portfolio and business model. Fitch also expects Nexture's business profile to become modestly stronger than that of La Doria S.p.A. (B+/Stable), which has comparable scale, but lower operating margins and narrower product and geographical diversification than Nexture after the latter's acquisitions, translating into a mildly higher debt capacity for the same rating than La Doria. IRCA Group Luxembourg Midco 3 S.a r.l's (B/Stable) one-notch differential with Nexture's rating is due to its higher leverage. Like Nexture, it has similar scale and faces comparable execution challenges stemming from similar food ingredients market trends. IRCA has weaker cash flow generation than Nexture despite higher profitability. Nexture is rated one notch above Seashell Bidco, SLU (Natra, B/Stable), reflecting the latter's smaller scale, narrower product diversification, moderately weaker operating margin and higher leverage, while both companies have strong FCF generation capabilities and longstanding relationships with major customers. Sigma Holdco BV (B/Stable) is materially larger, and has greater geographic diversification and higher operating margins, due to its strong brand portfolio and a different cost base. The one-notch rating differential is due to Sigma's much higher leverage than Nexture's. Fitch's Key Rating-Case Assumptions - Revenue flat in 2025 before rising 51% in 2026, mainly driven by the acquisitions followed by a normalisation of annual growth of 8%-9% to 2028 - EBITDA margin gradually growing towards 16% by 2028 - Annual capex at 2%-3% of revenue in 2025-2028 - FCF margin of 4.4% in 2025 and 1.3% in 2026 before normalising to above 4.5% from 2027 - M&A of EUR767million in 2026, followed by bolt-on M&A of about EUR35 million a year from 2027 - No dividend payments Corporate Rating Tool Inputs and Scores Fitch scored Nexture as follows, using its Corporate Rating Tool to produce the Standalone Credit Profile (SCP): The business and financial profile factors are assessed (in the format of the 'assessment', followed by relative importance) as follows: management ('bb+', moderate), sector characteristics ('bbb', low), market and competitive positioning ('b+', high), diversification and asset quality ('bb', moderate), company operational characteristics ('bb', moderate), profitability ('b+', high), financial structure ('b+', moderate) and financial flexibility ('bb-', moderate). The quantitative financial subfactors are assessed based on customised financial period parameters of 20% weight for the forecast year 2025, 30% for the forecast years of 2026 and 2027 and 20% for the forecast year 2028. The governance assessment of 'good' results in no adjustment to the IDR. The operating environment assessment of 'a' results in no adjustment to the IDR. The SCP is 'b+'. Recovery Analysis Fitch's recovery analysis assumes Nexture will be considered a going concern (GC) in bankruptcy, and that it would be reorganised rather than liquidated. Fitch has assumed a 10% administrative claim. Fitch assessed GC EBITDA at EUR70 million, reflecting the level of earnings required for sustaining operations as a GC with shrinking sales volumes and an inability to pass on cost increases. Fitch applied a distressed multiple of 5.0x, which is the mid-range for packaged food companies in EMEA. Fitch's estimates of creditor claims include a fully drawn EUR80 million super senior RCF, which ranks ahead of SSNs of EUR425 million, but in line with other debt of EUR17 million. Fitch expects Nexture's receivables factoring facilities of EUR38 million to remain in place during and after distress without requiring alternative funding, but at a reduced amount. This assumption is driven by the strong credit quality of the group's client base. Fitch's recovery analysis generates a ranked recovery in the 'RR3' band, leading to a 'BB-' rating for the EUR425 million of SSNs with a one-notch uplift from the IDR. The SSNs are on RWN to reflect the prospect of a near-term downgrade upon completion of the transaction, which Fitch estimates will result in reduced recoveries to the 'RR4' band. This is reflected in the 'B+(EXP)' senior secured rating with 'RR4' for the new SSNs. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Increase in EBITDA gross leverage to above 5.5x, due to weaker profitability or debt-funded acquisitions - EBITDA margin below 10%, resulting in lower FCF margins towards 1% - EBITDA interest coverage weakening towards 3.0x or below Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A wider scale and broader diversification across geographies, alongside product premiumisation supporting EBITDA growth towards EUR300 million - Higher EBITDA margin supporting sustained FCF margins at above 2.5% - EBITDA gross leverage below 4.5x Liquidity and Debt Structure Fitch estimates Nexture's available cash balance at about EUR97 million at end-2025. Solid operating performance with minimal working capital outflows and limited capex should support positive FCF, translating into a growing year-end cash balance, despite Fitch's assumption of annual bolt-on acquisitions in 2027-2028. Nexture is increasing its RCF to EUR150 million from EUR70 million, which Fitch expects to remain undrawn. The group has no major debt maturing before 2032, when the EUR900 million SSNs (including the planned new notes EUR475 million) will come due. Issuer Profile Nexture is an Italy-based pan-European manufacturer and distributor of food ingredients. =================== L U X E M B O U R G =================== FS LUXEMBOURG: Fitch Rates New Sr. Unsec. Notes Due 2036 'BB-' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to the proposed benchmark size senior unsecured notes due in 2036 issued by FS Luxembourg S.a.r.l. (FS Lux) and unconditionally and irrevocably guaranteed by FS Industria de Biocombustiveis Ltda. (FS) and FS I Industria de Etanol S.A (FS SA). Proceeds will be used for tendering the 2031 notes, to repay certain outstanding short-term indebtedness, to fund eligible green projects, and for capex and opex related to the production of corn ethanol. Fitch has affirmed FS's and FS S.A.'s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-'; Outlooks are Stable for both entities. Fitch has also affirmed the ratings on FS S.A.'s outstanding bond issuances. In addition, Fitch has affirmed the Long-Term National Scale Ratings at 'AA-(bra)' for FS and FS S.A.. These actions follow the update of the Corporate Rating Criteria and the Sector Navigators - Addendum to the Corporate Rating Criteria dated Jan. 9, 2026. The ratings incorporate FS's large-scale production in the volatile Brazilian ethanol industry and the lack of meaningful short-term price correlation between corn and ethanol. The ratings and the Outlooks also reflect FS's ability to maintain satisfactory financial flexibility and Fitch's expectation that EBITDA net leverage for the group (including their sister companies) will be around 3.5x during the construction of a BRL2 billion new corn ethanol plant, due to favorable ethanol and corn price assumptions for fiscal year-end 2026 and 2027. Key Rating Drivers Large Ethanol Producer: FS benefits from a sizable production capacity of approximately 2.5 billion liters of ethanol and a robust corn supply from neighboring areas, allowing for price discounts relative to the Chicago Board of Trade (CBOT). Animal nutrition products provide a partial hedge, as their prices strongly correlate with regional corn and soybean prices. Fitch expects revenue from these products to cover up to 50% of feedstock costs in the long term. FS's industrial plants in Mato Grosso, Brazil's largest corn-producing state, mitigate corn origination risks. The new corn ethanol mill, due by fiscal December 2026, will add 540 million liters of ethanol per year and 390 tons of DDG, strengthening FS's scale and market position. Weaker Corn and Ethanol Prices Correlation: FS faces price volatility for both corn, its main raw material, and ethanol, its main output, with low correlation. Corn prices adjust rapidly to global supply and demand imbalances, while Brazilian ethanol prices largely depend on local gasoline prices set by Petrobras, which are influenced by the Brent crude prices in BRL. Additionally, ethanol prices are indirectly influenced by sugar prices, as approximately 80% of local ethanol production comes from sugarcane. The base case assumes international corn prices of USD4.40 per bushel in 2025 and 2026 and average ethanol prices at BRL2.85/liter for fiscal YE 2026. Operating Cash Flow to Recover: Fitch expects EBITDA of BRL3.3 billion and cash flow from operations (CFO) of BRL1,089 million in fiscal YE 2026. This represents an improvement compared to fiscal YE 2025 EBITDA of BRL2.5 billion and CFO of BRL930 million in fiscal YE 2025. Higher ethanol prices and relatively competitive and stable corn prices should support higher EBITDA margin at around 31%, up from 24% in fiscal YE 2025 and 9% in fiscal YE 2024. Fitch projects negative FCF for fiscal 2026 and fiscal 2027, due to the new plant investments. The base case assumes dividends of BRL550 million in fiscal 2026 and BRL290 million in fiscal 2027. Group Structure and Related Parties: The update of Fitch's group structure relevance score to '4' reflects increasing related-party transactions with FS Florestal S.A. and FS Infraestrutura S.A., which are not included in FS's combined financial statements. Besides the partial guarantees that FS provides to these entities, there is debt at FS Florestal guaranteed by long-term commercial agreements between both companies. Fitch adjusted FS debt by adding BRL2.5 billion tied to sister companies. EBITDA Net Leverage Near 3.5x: Fitch projects that adjusted net leverage will be around 3.5x in fiscal 2026, driven by higher volumes and increased EBITDA margins due to relatively stable corn costs and higher-than-expected ethanol prices. Fitch's base case reflects EBITDA net leverage for FS will peak at 3.7x in fiscal 2027, falling to around 3.0x in fiscal 2028 after the new plant completes a full year of operations. Peer Analysis FS's 'BB-'/Stable IDR is at the same level as Ingenio Magdalena S.A. (IMSA; BB-/Negative). IMSA has a more stable cash flow profile compared to FS. As a corn-based ethanol producer, FS is more exposed to commodity price fluctuations in both raw materials and products. However, IMSA has tight liquidity and lower scale in terms of revenue and EBITDA and lower financial flexibility. FS has access to local and international bond markets and has longer debt maturities. FS's 'AA-(bra)' National Long-Term Rating and Stable Outlook is one notch above Acucareira Quata S.A.'s (Zilor; National Long-Term Rating: A+[bra]/Stable). FS has stronger liquidity and financial flexibility and more satisfactory access to domestic and international capital markets than Zilor. FS's lower maintenance capex supports more robust FCFs than Zilor's in a no-growth capex scenario. Zilor's results are less volatile due to is business characteristics. Fitch's Key Rating-Case Assumptions -- Ethanol production capacity of 2.5 billion liters in FY 2026 and 2.8 billion in FY 2027; -- Sales of animal nutrition products of over 2.3 million tons in FY 2026 and 2.6 million in FY 2027; -- Ethanol prices to vary in tandem with a combination of oil prices and FX rates. Brent crude prices have been forecast to average USD70 per barrel (bbl) in 2025 and USD65/bbl in 2026; -- End-of-period FX rates of BRL5.60 per USD in 2025 and BRL5.70/USD in 2026; -- Animal nutrition products providing around 50% coverage for total corn costs; -- Total investments of BRL1.8 billion in FY 2026 and BRL1.2 billion in FY 2027; Dividends of BRL550 million in FY 2026 and BRL290 million in FY 2027. Corporate Rating Tool Inputs and Scores Fitch scored FS as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): -- Business and financial profile factors: Management (bb+, Moderate), Sector Characteristics (bb, Lower), Market & Competitive Positioning (bb+, Moderate), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bb, Moderate), Profitability (bb, Moderate), Financial Structure (b+, Higher), Financial Flexibility (bb, Moderate); -- The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the historical year 2024, 40% for the forecast year 2025, and 40% for the forecast year 2026; -- The Governance assessment of Good results in no adjustment; -- The Operating Environment assessment of 'bb' results in no adjustment; -- The SCP is 'bb-'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Deterioration in liquidity and/or difficulties in refinancing short-term debt; -- EBITDA margins below 20% on a sustained basis; -- Combined EBITDA net leverage (including sister companies' debt) above 3.5x on a sustained basis. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Longer positive track record across different cycles in ethanol and corn prices; -- FCF consistently positive, with the maintenance of combined EBITDA net leverage (including sister companies' debt) below 2.0x through the cycle; -- EBITDA interest coverage above 2.5x. Liquidity and Debt Structure FS's liquidity is satisfactory and was strengthened by recent liability management that reduces short-term refinancing risks. As of Sept. 30, 2025, cash and marketable securities totaled BRL1.9 billion versus short-term debt of BRL1.1 billion and total debt of BRL13.0 billion (including reverse factoring, guarantees to sister companies and derivatives). FS maintains good access to banking and domestic/foreign capital markets, with most debt now due from 2029 onward, including USD350 million notes due 2031 (subject to prepayment), USD500 million notes due 2033, and USD500 million notes due 2036. The lengthened maturity profile reduces near-term refinancing risk and supports liquidity. Issuer Profile FS operates three plants and is constructing more one in Mato Grosso, producing corn-based ethanol, DDG for animal nutrition, corn oil, and energy. The plants have a total capacity to crush 5.1 million tons of corn and produce 2.5 billion liters of ethanol. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- FS I Industria de Etanol S.A LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT AA-(bra) Affirmed AA-(bra) FS Industria de Biocombustiveis Ltda. LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT AA-(bra) Affirmed AA-(bra) FS Luxembourg S.a r.l. senior unsecured LT BB- New Rating senior unsecured LT BB- Affirmed MSME COMPARTMENT 474: Fitch Cuts Rating on Notes to BB+sf --------------------------------------------------------- Fitch Ratings has downgraded the notes issued by Micro, Small & Medium Enterprises Bonds S.A. (MSME) Compartment Series 474 to 'BB+sf' from 'BBB-sf'. The Rating Outlook is Stable. The downgrade reflects the change in the perception of collateral credit quality following the Risk Presenting Entity's (RPE) downgrade. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- Micro, Small & Medium Enterprises Bonds S.A. - Compartment Series 474 Notes XS2701167285 LT BB+sf Downgrade BBB-sf Transaction Summary MSME, acting on behalf of its compartment Series 474, issued the Pass-Through Notes (Green Notes) under the Green Multiple Compartment Programme. MSME is a segregated compartment securitization company domiciled in Luxembourg as a platform for the issuance of bonds. The proceeds of the Green Notes were used by the issuer to purchase the underlying asset, a private bond issued by Banco Bilbao Vizcaya Argentaria Colombia S.A. (BBVA Colombia, RPE; rated BB+/Stable). KEY RATING DRIVERS Credit Quality of the Underlying Assets Drives the Rating: BBVA Colombia, with Foreign and Local Currency Long-Term Issuer Default Ratings (IDRs) of BB+/Stable, is the issuer of the private bond acquired by the Green Notes, and is the sole risk presenting entity. The instrument ranks equally with other existing and future senior unsecured debt and ranks senior in right of payment to any future debt that is expressly made subordinate to the instrument. Fitch has downgraded BBVA Colombia's Foreign Currency Long-Term IDRs to 'BB+' from 'BBB-' and assigned a Stable Outlook. These actions follow the downgrade of Colombia's rating to 'BB' from 'BB+' and Country Ceiling to 'BB+' from 'BBB-'. Transaction Structure: The Green Notes mirror the acquired instrument; therefore, there is no mismatch. All the events applicable to the acquired instrument are identical and applicable to the Green Notes. Additionally, all expenses are covered by excess spread in which senior expenses are subject to a cap. Payments are semi-annual, and carried out according to transaction terms. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade If the credit quality of the underlying assets issued by BBVA Colombia deteriorates, the notes will be downgraded. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade If the credit quality of the underlying assets issued by BBVA Colombia improves, the notes will be upgraded. SES SA: Fitch Lowers Subordinated Debt Rating to 'BB' ----------------------------------------------------- Fitch Ratings has downgraded SES S.A.'s Long-Term Issuer Default Rating (IDR) and senior unsecured debt to 'BBB-' from 'BBB'. The Outlook on the IDR is Stable. Fitch said, "The downgrade reflects a reduction in EBITDA expectations over the medium term, primarily driven by intensified competition in the fixed data segment and the impact of the acquisition of Intelsat (July 2025). We expect Fitch-defined EBITDA net leverage to decline to 2.8x in 2027 versus our previous expectation of 2.3x. This leaves limited leverage headroom for the rating." The Stable Outlook reflects potential significant proceeds from US C-Band spectrum auctions and other inorganic levers that could provide scope to manage leverage within the rating thresholds. Further pressure or volatility in EBITDA in the short term or a lack of sufficient discretionary capacity to manage the balance sheet would pressure the rating. Key Rating Drivers Considerable EBITDA Decline: Fitch said, "In our updated rating case, we assume EBITDA in 2027 (about two years after the completion of the Intelsat acquisition) will be 24% lower than previously forecast. We expect ongoing operating challenges, driven by competitive pressures from low Earth orbit (LEO) constellations, especially in fixed data, and structural challenges related to media segment decline to continue weighing on SES's revenue and profitability." Fitch said, "We expect Intelsat-related issues seen in 9M25, namely, lower-margin equipment sales tied to electronically steered antenna installations in aviation and the IS-33e satellite failure in October 2024 that necessitated third-party capacity, will materially weigh on profitability over the next 12 to 24 months. We anticipate these issues will begin to fade from 2H26-2027 as SES completes equipment installations and starts generating service revenue and migrates customers from third-party capacity to SES satellites." Higher Leverage Expectations: Fitch said, "In our revised rating case, leverage increased to 3.7x in 2025 (pro forma for the Intelsat acquisition) from 1.2x in 2024, before declining to 2.8x by end-2027 supported by the realisation of synergies and C-band proceeds. We expect SES to use all first-phase C-band proceeds for debt reduction. The company-defined leverage of 3.0x is broadly consistent with Fitch's lower end of the leverage thresholds for the 'BBB-' rating. However, this leaves no headroom for unexpected operational pressures." C-Band Proceeds Provide Flexibility: SES is likely to receive proceeds from the potential sale of up to 180MHz of C-band spectrum in the US. At the last auction in 2020, SES and Intelsat collectively received USD8.7 billion for clearing 280MHz. Market analysts estimate SES could receive net proceeds between USD2 billion and USD4.7 billion for clearing 100MHz to 180MHz of spectrum. SES has pledged to return the majority of the C-band proceeds to shareholders after leverage reaches 3.0x, but retains some discretion in the use of disposal proceeds and ability to build leverage headroom. Synergies on Track: SES reported the delivery of synergies ahead of plan and reconfirmed run-rate savings of about EUR210 million in opex and EUR160 million in capex, with about 70% to be executed within three years. This strengthens Fitch's confidence in management's execution and is reflected in Fitch's updated forecasts. Structurally Declining Media Segment: SES's high-margin video business, historically its largest segment and a key driver of 50% EBITDA margins (pre-Intelsat), will remain under structural pressure from declining linear TV usage. Fitch said, "We estimate media accounted for 46% of SES's standalone revenue in 2024 and about 40% on a pro forma basis including Intelsat. We expect a low double-digit revenue decline in 2025, exacerbated by a Brazilian customer bankruptcy, followed by mid-single digit declines in 2026-2028. This trajectory is a significant contributor to the anticipated margin compression (pre-synergies) from 2025." Increasing Pressure from LEO: Fitch said, "We expect competition from LEO to intensify in the near term as deployments scale. Starlink alone expects to nearly double capacity in 2026 to about 600 terabits per second (Tbps) versus 2025 (from about 200Tbps in 2024) and has begun offering service-level agreements tailored for B2B customers. Amazon's Kuiper is piloting enterprise solutions ahead of a 2026 commercial rollout. LEO and medium Earth orbit (MEO) constellations may expand the overall market over the medium-to-long term, but increased capacity is likely to drive pricing pressure." Networks Growth Prospects: Fitch said, "Growth prospects in the Networks segment vary by application. We continue to view government as offering good growth potential, although geopolitical events drive year-to-year volatility. We expect maritime to remain relatively stable, supported by direct distribution. In contrast, aviation carries more risk for SES given the higher reliance on reseller channels. However, we still expect good near- to medium-term growth, underpinned by the ongoing expansion of inflight connectivity. We expect fixed data to remain the most challenged application, with a double-digit decline in 2025-2028." Retained Discretionary Capacity Key: Medium-term uncertainty about the extent and timing of the above threats combined with a high, peak capex cycle, makes organic deleveraging capacity crucial. This allows flexible balance-sheet management and investments and is essential for global satellite operators maintaining investment-grade ratings. IRIS2 Long-Term Supportive: IRIS2 is a joint project with the European Commission and other partners to provide secure sovereign space capabilities over multiple orbits. The programme will enable SES to commercialise about 90% of the medium Earth orbit capacity in a 12-year concession agreement. Fitch believes the project is supportive of SES's medium- to long-term growth, but the associated EUR1.8 billion upfront investment over the next five years will increase capex and weigh on free cash flow (FCF) from 2027, just as SES integrates Intelsat. Peer Analysis Global satellite operators have differing exposure to diverging sub-segment trends, geographic growth and market structures. The extent of exposure to each segment and region influences the credit profile. Like its principal peer Eutelsat Communications S.A. (BB/Stable), SES has significant exposure to the highly profitable European direct to home video segment, which, despite structural pressures, is cash generative and supportive of SES's credit profile. Both Eutelsat and SES have taken different approaches to lower-orbit constellations, with the latter having invested in MEO, while Eutelsat has acquired OneWeb, a LEO constellation network. SES's MEO investments carry lower risks in the short-to-medium term, while Eutelsat's acquisition of OneWeb carries greater risks but provides a hedge to potential operating shifts in the long term. Eutelsat's lower rating primarily reflects higher leverage, higher execution risks in relation to LEO and funding risk. SES's leverage thresholds are tighter than domestically focused, integrated European telecoms operators, such as Royal KPN N.V. (BBB/Stable). SES's operating profile is weaker than that of mobile towers operators such as Cellnex Telecom S.A. (BBB-/Stable) and data centre operators such as Global Switch Holdings Limited (BBB/Stable) due to their longer contract durations, lower price volume risk, lower technology risk and greater discretionary organic deleveraging capacity. Fitch's Key Rating-Case Assumptions - Combined revenue of EUR3.49 billion in 2025, declining by low single-digits in 2026-2028 - Combined Fitch-defined EBITDA (pre-IFRS16) of EUR1.47 billion in 2025, gradually increasing to EUR1.57 billion by 2028 - Negative working capital averaging around EUR170 million a year in 2025-2028 - Fitch-defined capex of EUR1 billion in 2025, averaging EUR0.7 billion a year in 2026-2028 - Receipt of initial accelerated payments from C-Band proceeds in 2027, used by the company for debt repayment until company- defined leverage reaches 3.0x - Dividends of EUR208 million a year between 2025 and 2028 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): - Business and financial profile factors (assessment, relative importance): management (bbb, lower), sector characteristics (bbb, lower), market and competitive positioning (bbb, higher), diversification and asset quality (bbb+, moderate), company operational characteristics (bbb+, moderate), profitability (a-, moderate), financial structure (bb, higher) and financial flexibility (bbb+, moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2026, 40% for the forecast year 2027 and 40% for the forecast year 2028. - The governance assessment of 'good' results in no adjustment. - The operating environment assessment of 'aa-' results in no adjustment. - The SCP is 'bbb-'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Significant pressure on FCF, driven by continued EBITDA erosion due to pricing pressure, protracted contraction of segments, increasing global overcapacity or new entrants, and higher-than-expected capital intensity and shareholder remunerations - Fitch-defined EBITDA net leverage above 2.8x on a sustained basis - CFO less average through the cycle capex sustained below 10% of total debt in the medium term - A reduction in organic deleveraging capacity and reduced balance-sheet flexibility while significant operating risks and uncertainties remain - Significant reduction or delay in receipt of C-Band proceeds compared with expectations. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch-defined EBITDA net leverage below 2.3x on a sustained basis - CFO less average through the cycle capex sustained above 12% of total debt - Stable or growing total revenue and EBITDA trends - Visibility that revenue and cash flow will not be adversely affected by changes in sector trends, market structure and increasing competition Liquidity and Debt Structure At end-September 2025, SES had cash and cash equivalents of about EUR1 billion (excluding EUR0.3 billion of cash that Fitch treats as restricted) and an undrawn, seven-year multi-currency revolving credit facility of EUR1.2 billion that matures in 2028. This compares with EUR1.06 billion of senior debt maturing in 4Q25-2026. Issuer Profile SES is a leading global satellite operator headquartered in Luxembourg. The company operates about 100 satellites in two different orbits (geostationary orbit and MEO) with strong market positions in video, government, mobility and fixed data. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- SES Global Americas Holdings Inc. senior unsecured LT BBB- Downgrade BBB senior unsecured ST F3 Downgrade F2 SES S.A. LT IDR BBB- Downgrade BBB ST IDR F3 Downgrade F2 senior unsecured LT BBB- Downgrade BBB subordinated LT BB Downgrade BB+ senior unsecured ST F3 Downgrade F2 ===================== N E T H E R L A N D S ===================== ACR I BV: Moody's Lowers CFR to Ca & Alters Outlook to Stable ------------------------------------------------------------- Moody's Ratings downgraded ACR I B.V.'s (AnQore or the company) corporate family rating and probability of default rating to Ca and Ca-PD from Caa1 and Caa1-PD, respectively. Concurrently, Moody's downgraded the instrument ratings of AnQore B.V.'s senior secured bank credit facilities to Ca from Caa1. The outlook on both entities has changed to stable from negative. RATINGS RATIONALE The rating action reflects Moody's views of a high likelihood of a default or distressed exchange. In a debt restructuring scenario, Moody's would expect a substantial impairment of the senior secured term loans and senior secured revolving credit facility, as the company's cash generation is insufficient to support its cash interest burden and capital expenditure requirements. AnQore's capital structure is unsustainable reflected in Moody's-adjusted gross leverage above 20x, the historical and expected cash consumption, and the uncertainty surrounding improvements in 2026. If demand does not recover, Moody's expects the company's Moody's-adjusted gross leverage in 2026 to remain broadly in line with 2025 levels as there is limited amount of possibilities for the company to improve its situation. With the term loan maturing in 2027 and weak liquidity, including risk of covenant breach, the company will likely need to address its capital structure. All these factors underscore high financial risk, which was a key driver of the rating action. The company experiences a prolonged demand downturn in the European acrylonitrile (ACN) market meanwhile there is a global oversupply of ACN and some of its derivates. In the first 11 months of 2025, the company-adjusted pro-forma EBITDA fell to around EUR26 million from EUR43 million in the same period last year. In early 2025, AnQore repaid EUR80 million of its EUR300 million senior secured term loan B2 following the sale of its shares in Circle Infra Partners. As part of the transaction, lenders agreed to replace the net-leverage covenant with a minimum-liquidity covenant through Q1 2026. However, given the company's depressed earnings, the debt reduction did not materially improve the sustainability of its capital structure and the company is at risk to breach its financial covenant. Another challenge will also be the turnaround in 2027. Moody's believes that the company needs to secure additional external sources of liquidity to fund those, as Moody's do not expect it to generate sufficient internal cash flow from operations. OUTLOOK The stable outlook reflects Moody's views that it is unlikely that creditors will incur losses higher aligned with those implied by the current ratings. LIQUIDITY Moody's views AnQore's liquidity as weak. Moody's forecasts negative Moody's-adjusted FCF (after interest costs) over the next 12-18 months. As of the end November 2025, the company had around EUR34 million in cash and cash equivalent on balance sheet. The EUR55 million senior secured revolving credit facility (RCF) is fully drawn. The company also uses a non-recourse factoring facility to manage its working capital swings. The company's cash balance experiences intra-year swings driven by the timing of interest payments and fluctuations in working capital. Until Q1-2026, the company needs to comply with a minimum liquidity covenant (the definition of liquidity is broader than just cash on balance) of EUR25 million. Moody's believes that there is a risk that AnQore could breach its liquidity covenant or its net leverage maintenance covenant (after Q1-2026). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if there are strong, visible near term improvements in performance resulting in a sustainable capital structure combined with an adequate liquidity profile. Moody's could downgrade the ratings if liquidity deteriorates further or operating performance does not improve. A ratings downgrade could also be prompted if Moody's views on the probability of a restructuring or distressed exchange increases. The principal methodology used in these ratings was Chemicals published in October 2023. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Headquartered in the Netherlands, AnQore is a European producer of acrylonitrile (ACN) and other co-products. The company operates a 275kt ACN plant at the Chemelot site in Geleen (Netherlands) with two identical lines. JUBILEE PLACE 9: Moody's Assigns (P)B1 Rating to Class E Notes -------------------------------------------------------------- Moody's Ratings has assigned provisional ratings to Notes to be issued by Jubilee Place 9 B.V.: EUR [ ]M Class A Mortgage-Backed Floating Rate Notes due October 2061, Assigned (P)Aaa (sf) EUR [ ]M Class B Mortgage-Backed Floating Rate Notes due October 2061, Assigned (P)Aa2 (sf) EUR [ ]M Class C Mortgage-Backed Floating Rate Notes due October 2061, Assigned (P)A3 (sf) EUR [ ]M Class D Mortgage-Backed Floating Rate Notes due October 2061, Assigned (P)Baa3 (sf) EUR [ ]M Class E Mortgage-Backed Floating Rate Notes due October 2061, Assigned (P)B1 (sf) EUR [ ]M Class X1 Floating Rate Notes due October 2061, Assigned (P)Ba2 (sf) EUR [ ]M Class X2 Floating Rate Notes due October 2061, Assigned (P)Ba3 (sf) RATINGS RATIONALE The Notes are backed by a static pool of Dutch buy-to-let ("BTL") mortgage loans originated by Dutch Mortgage Services B.V. ("DMS", NR), DNL 1 B.V. ("DNL", NR) and Community Hypotheken B.V. ("Community", NR). This represents the ninth issuance of these originators. The total provisional portfolio as of 31 December 2025 is EUR386.4 million. The liquidity reserve is funded at 0.25% of the Notes balance of Classes A and B at closing with a target of 1.00% of Classes A and B balances until the step-up date. The total subordination for the Class A Notes at closing will be roughly 9.5% in addition to excess spread and the credit support provided by the reserve fund. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. According to Moody's, the transaction benefits from various credit strengths such as a static portfolio and an amortising liquidity reserve fund sized at closing at 0.25% of the Class A and B Notes' principal amount. However, Moody's notes that the transaction features some credit weaknesses such as small and unregulated originators also acting as servicers, exposure to a small bucket of CRE loans, and the focus on a small and niche market, the Dutch BTL sector. The originators, with their current size and set-up acting as servicer of the securitised portfolio, would not have the capacity to service the portfolio on their own. However, the day-to-day servicing of the portfolio is outsourced to BCMGlobal Netherlands B.V. ("BCMGlobal Netherlands", NR) as subservicer. This risk of servicing disruption is further mitigated by structural features of the transaction. These include, among others, the issuer administrator acting as a backup servicer facilitator who will assist the issuer in appointing a backup servicer on a best-effort basis upon termination of the servicing agreement. Moody's determined the portfolio lifetime expected loss of 1.2% and MILAN Stressed Loss of 10.6% related to the mortgage portfolio. The expected loss captures Moody's expectations of performance considering the current economic outlook, while the MILAN Stressed Loss captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. Expected loss and MILAN Stressed Loss are parameters used by us to calibrate its lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model to rate RMBS. Portfolio expected loss of 1.2%: This is in line with the average expected loss in Dutch buy-to-let transactions. The assumption is based on Moody's assessments of the lifetime loss expectation for the pool taking into account (1) the available historical performance data for previous Jubilee Place transactions; (2) benchmarking with comparable transactions in the Dutch and UK buy-to-let markets; (3) peculiarities of the Dutch BTL market, such as the relatively high likelihood that the lender will not benefit from its pledge on the rents paid by the tenants in case of borrower insolvency, and (4) the current economic conditions and forecasts in The Netherlands. The MILAN Stressed Loss for this pool is 10.6%: This is in line with the average MILAN Stressed Loss in Dutch buy-to-let transactions and follows Moody's assessments of the loan-by-loan information, taking into account the following key drivers (1) the available historical performance data for previous Jubilee Place transactions; (2) the weighted average current loan-to-market-value (LTMV) of approximately 71.2%; (3) the high interest-only (IO) loan exposure, (4) the inclusion of small-ticket CRE loans in the pool, amounting to 6.2% of the total pool balance, (5) adjustment relating to the peculiarities of the Dutch BTL market, and (6) the current economic conditions and forecasts in The Netherlands. The principal methodology used in these ratings was "Residential Mortgage-Backed Securitizations" published in October 2024. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Factors that would lead to an upgrade of the ratings include: significantly better than expected performance of the pool together with an increase in credit enhancement of Notes. Factors that would lead to a downgrade of the ratings include: (i) increased counterparty risk leading to potential operational risk of (a) servicing or cash management interruptions and (b) the risk of increased swap linkage due to a downgrade of swap counterparties ratings; and (ii) economic conditions being worse than forecast resulting in higher arrears and losses. VTR FINANCE: Moody's Upgrades CFR to B1 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Ratings has upgraded VTR Finance N.V.'s ("VTR") corporate family rating and VTR Comunicaciones SpA's 4.375% backed senior secured notes to B1 from B3. The outlook has changed to stable from positive. The rating action reflects that, although VTR's cash flow and credit metrics remain weak, liquidity support provided by America Movil, S.A.B. de C.V. (America Movil, Baa1 stable), its parent company, will be sufficient to cover VTR's operating and financial needs. As of December 2025, America Movil has provided over $2.0 billion to VTR's operations through a combination of equity injections and intercompany loans via Claro Chile SpA (Claro), contributing to a meaningful reduction in leverage. The two-notch upgrade of VTR's senior secured rating reflects a material reduction of refinancing risk given the recent repayment of $677 million in senior debt, that was funded by America Movil. The remaining senior secured notes issued by VTR Comunicaciones SpA, benefit from pledges over the shares of VTR Comunicaciones SpA and VTR.com SpA. These notes represent the total debt of VTR and are aligned with the company's B1 CFR. As of December 2025, America Movil further strengthened VTR's capital structure and near-term liquidity by providing support to repay VTR's Senior Notes due 2028, reducing about 70% of the total outstanding debt. VTR's operating scale is not material when compared to America Movil's consolidated revenue; however, Moody's support assumption is backed by the efforts that America Movil made in recent years to maintain and turnaround the operations in Chile; including equity injections, intercompany loans and senior management involvement in the operations and participation on the board of VTR. Moody's expects VTR will benefit, as any other of America Movil's subsidiaries, from administrative, operational and critically, financial and liquidity support from its parent company; therefore, Moody's expects a continuing operational integration. The stable outlook reflects Moody's expectations that VTR will gradually improve its operating performance and liquidity while maintaining adequate leverage levels following the recent debt repayment. The outlook also assumes that VTR will continue to rely on external funding and ongoing support from America Movil, its parent company. RATINGS RATIONALE VTR's B1 CFR incorporates the implicit support from America Movil to cover VTR's liquidity needs. The B1 ratings incorporate the company's market position in broadband and pay-TV in Chile and Moody's expectations of gradual operational improvements, given the company's access to fiber and 5G technologies, which should provide flexibility to better manage churn, ARPU and net additions. Conversely, VTR's ratings reflect its weak cash flow generation and negative free cash flow; as well as its reliance on external funding through its parental support. The ratings also reflect VTR's track record of operating losses and the challenges in turning around negative operational trends, given the stiff competitive environment in Chile. VTR's weak cash generation incorporates its Moody's adjusted EBITDA margin of 11.8% for the last twelve months ending September 2025. Since December 2024, the company has struggled to increase its top line; however, in 2025 VTR has managed to increase ARPU (average revenue per user) due to its efforts to improve its business model, allowing it to catch up with other operators' commercial offerings. VTR's current ability to offer fiber optic access helps it to improve operating metrics, namely, to manage churn. In March 2024, Claro reached an agreement with neutral infrastructure provider ON*NETFIBRA that allows it to offer and sell services over optic fiber. In September 2025, as part of the ongoing operational integration, VTR sold its mobile business to Claro, a segment representing around 6–8% of VTR's revenue. Consequently, all fixed-line business assets were allocated into VTR. This transaction effectively separated the mobile and fixed-line businesses, even though both companies continue to operate under an integrated framework. While cash generation improved in 2025, VTR's internal liquidity remains weak, partly due to high capital expenditures—about 36% of revenues for the twelve months ended September 2025—which Moody's expects to moderate toward 20% going forward. Moody's expects cash flow generation to improve in 2026 on the back of a material reduction in interest expenses and gradual operating improvements. Moody's expects America Movil to support VTR, to continue deploying the investments needed to execute the company's strategy and budget in Chile. The rating action reflects governance considerations as key drivers of the rating action including liquidity support and improved operating profile. These are reflected in the company's "Management Credibility and Track Record" assessment which have changed to 3 from 4. The overall exposure to governance risks (Issuer Profile Score or "IPS") and VTR's Credit Impact Score remain unchanged at G-4 and CIS-4, respectively. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade VTR's ratings if VTR executes its strategy and improves profitability and cash flow generation, leading to a reduction of dependance on its parent company to operate and service its liquidity needs. A sustained improvement in operating performance would also be positive for the rating, including positive trends in ARPU and revenue. An upgrade will be subject to a coverage—measured as (EBITDA minus capex) to interest expense—consistently above 1.5x, and leverage maintained below 5.0x (including Moody's standard adjustments) on a sustained basis. Conversely, the ratings could be downgraded if there's any indication of lower support from America Movil. Negative pressure could arise should the company fails to sustain revenue growth or improve profitability, or if leverage is maintained above 6.0x without a clear path to reducing it. The principal methodology used in these ratings was Telecommunications Service Providers published in December 2025. VTR's B1 rating is three notches above the Caa1 scorecard-indicated outcome for the last twelve months ended September 2025. This reflects America Movil's support to meet VTR's liquidity needs and Moody's expectations of credit metrics improvement following the recent debt reduction. VTR offers broadband, pay-TV and fixed telephony services, which allow it to provide bundles and benefit from cross-selling opportunities. As of the 12 months that ended September 2025, VTR reported revenue of CLP412.9 billion through its network of 5.2 million homes. As of September 2025, the company served 2.1 million fixed-revenue-generating units and 5.150 million homes passed. VTR is controlled by America Movil through its subsidiary Claro Chile. ========= S P A I N ========= BANCO SANTANDER: Fitch Affirms BB+ Rating on Preferred Debt ----------------------------------------------------------- Fitch Ratings has affirmed Banco Santander, S.A.'s (Santander) Long-Term Issuer Default Rating (IDR) at 'A' with a Stable Outlook and its Viability Rating (VR) at 'a'. Key Rating Drivers Balanced Geographic Diversification: Santander's ratings benefit from its stable, balanced and geographically diversified universal banking operations with strong franchises in several key markets and a leading European consumer finance business. Its business profile and effective risk management support resilient profitability, offsetting lower capital ratios and weaker asset quality compared with higher-rated European peers'. Santander's funding benefits from its growing deposit base, while maintaining access to diverse wholesale funding sources. Good Environment in Some Markets: Santander's improved operating environment assessment, which is now in line with that of Spanish domestic peers despite the group's material exposure to emerging markets, benefits from growth opportunities not only in Spain but in other key mature markets. In particular, Santander has large and growing foreign operations in Portugal, the US and UK, which balance risks. Its multiple point-of-entry (MPE) resolution strategy requires subsidiaries to manage capital and funding independently. This limits the potential for foreign operations to become a contingent liability for the parent. Strong Business Profile: Santander is a global universal bank with strong shares in key markets and product segments. Its diversified business model is also supported by its growing corporate and investment banking (CIB) and payments businesses and a leading consumer finance business. Wealth management and insurance are less developed than at other European peers but adequately complement its product offering and are growing. Its global franchise covers both developed and more volatile markets, which allows the bank to generate sound and stable earnings through different interest rate and economic cycles. Conservative Risk Profile: Centralised and robust risk controls underpin Santander's conservative risk profile. The bank has tightened its underwriting standards in more vulnerable asset classes and geographies, underpinning its resilient asset quality. Interest-rate and foreign-exchange risks are well-managed, and traded market risk is contained and below higher-rated peers'. Resilient Asset Quality: Santander's loan portfolio performance is stabilising following post-pandemic normalisation. Fitch expects its impaired loans ratio to remain at about 3% in 2026-2027. The bank operates in higher-risk emerging markets that result in higher problematic exposures than at peers, but proactive risk management, tightened underwriting and strong coverage ratios put Santander in a good position to navigate ongoing economic uncertainties. Profitability to Remain Strong: Santander's profitability is a rating strength. Its operating profit was 3.4% of risk-weighted assets (RWAs) in 9M25, due to a successful transformation plan. This has resulted in fee income growth in its wealth, CIB and payments businesses, strict cost discipline and muted loan impairment charges (LICs). Fitch expect these trends to consolidate in 2026-2027, which together with moderate loan growth, should keep operating profit remaining comfortably above 3% of RWAs. Improving Capitalisation: Santander's common equity Tier 1 (CET1) ratio of 13.1% at end-September 2025 slightly exceeds its 13% guidance for 2025 and is at the upper end of its 12%-13% operating range. Fitch expect the CET1 ratio to remain slightly above 13% in 2026-2027, assuming the bank continues to use excess capital for growth and share buybacks. Sustained internal capital generation and strict capital management have supported larger capital distributions while improving the CET1 ratio. Diversified Funding, Strong Retail Franchise: Santander's gross loans/deposit ratio has been declining (end-September 2025: 105%, excluding the recently sold Polish business) as the group implements its strategy to expand the deposit franchise, mainly through its digital bank, Openbank, but remains above domestic and international peers'. Its global retail deposit franchise has proved resilient throughout the cycle, which enhances the stability of the group's funding and liquidity and reduces concentration risks. Wholesale funding is diversified by product and currency across various geographies and has access to a wide investor base. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Negative rating pressure would emerge if Fitch no longer expected Santander to structurally operate with a CET1 ratio of about 13%, or if diversifications benefit from a balanced geographical footprint weakened because of a higher weighting towards more volatile markets. Operating profit/RWAs falling below 3% on a sustained basis, signaling diminishing earnings resilience, would also be negative for the ratings. An unexpected severe setback in the economic prospects in the group's core countries sharply eroding its business and financial prospects would also be negative for Santander's ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of Santander's ratings would require further improvements in its operating environment. In addition, an upgrade would also require a CET1 ratio materially above 13% on a sustained basis, while preserving operating profit at well above 3% of RWAs, without significantly altering the group's risk profile, and achieving stronger asset-quality metrics. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Santander's long-term senior preferred (SP) debt and deposit ratings, and its Derivative Counterparty Rating (DCR), are one notch above its Long-Term IDR to reflect the protection that accrues from buffers of senior non-preferred (SNP) and more junior debt at the Spanish resolution group. Fitch estimates that this buffer was almost 18% of resolution group RWAs at end-September 2025. Fitch expects the buffer to remain above 10% of RWAs on a sustained basis. For the same reasons, Santander's SNP notes are rated at the same level as its Long-Term IDR. The short-term SP debt and deposit ratings of 'F1' are the lower of two options mapping to 'A+' long-term deposit and SP ratings on Fitch's rating scale, respectively, reflecting Santander's 'a' funding and liquidity profile. The rating of subordinated Tier 2 debt is two notches below the bank's VR, which is in line with Fitch's baseline notching for loss severity. Legacy preferred shares are rated five notches below the bank's VR. This corresponds to two notches for loss severity and three notches for non-performance risk, given the presence of a profit test in the notes' terms and conditions. Santander's Government Support Rating (GSR) of 'no support' reflects Fitch's view that, although external extraordinary sovereign support is possible, it cannot be relied on. This is because senior creditors can no longer expect to receive full extraordinary support from the sovereign in the event that the bank becomes non-viable. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Santander's DCR, senior debt and deposit ratings are primarily sensitive to changes in Santander's IDRs, from which they are notched. Fitch would downgrade the DCR, long-term SP and SNP debt and deposit ratings by one notch if the size of the combined buffer of junior and SNP debt for the resolution group fell below 10% of RWAs on a sustained basis with the group partly meeting its Minimum Requirement for Own Funds and Eligible Liabilities with SP debt. Santander's subordinated debt and legacy preferred shares' ratings are primarily sensitive to a change in Santander's VR, from which they are notched. The ratings are also sensitive to a change in the notes' notching, which could arise if Fitch changes its assessment of their non-performance risk relative to the risk captured in the VR or their expected loss severity. An upgrade of the GSR would be contingent on a positive change in the sovereign's propensity to support the bank. In Fitch's view, this is highly unlikely, although not impossible. VR ADJUSTMENTS The operating environment score of 'a' is below the 'aa' category implied score due to the following adjustment reason: sovereign rating (negative). The capitalisation and leverage score of 'a-' is above the 'bbb' category implied score due to the following adjustment reason: internal capital generation and growth (positive). The funding and liquidity score of 'a' is above the 'bbb' category implied score due to the following adjustment reasons: non-deposit funding (positive) and deposit structure (positive). RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- Banco Santander, S.A. LT IDR A Affirmed A ST IDR F1 Affirmed F1 Viability a Affirmed a DCR A+(dcr) Affirmed A+(dcr) Gov't. Support ns Affirmed ns subordinated LT BBB+ Affirmed BBB+ Senior preferred LT A+ Affirmed A+ preferred LT BB+ Affirmed BB+ long-term deposits LT A+ Affirmed A+ Senior non-preferred LT A Affirmed A short-term deposits ST F1 Affirmed F1 Senior preferred ST F1 Affirmed F1 SABADELL CONSUMO 3: Fitch Affirms BB-sf Rating on Class F Notes --------------------------------------------------------------- Fitch Ratings has affirmed Sabadell Consumo 2, FT's and Sabadell Consumo 3, FT's notes, and revised the Outlook on five tranches to Negative from Stable. RATING ACTIONS Entity / Debt Rating Prior Sabadell Consumo 2, FT Class A ES0305622005 LT AAAsf Affirmed AAAsf Class B ES0305622013 LT AAAsf Affirmed AAAsf Class C ES0305622021 LT AA-sf Affirmed AA-sf Class D ES0305622039 LT BBB+sf Affirmed BBB+sf Class E ES0305622047 LT BBB-sf Affirmed BBB-sf Class F ES0305622054 LT BBsf Affirmed BBsf Sabadell Consumo 3, FT Class A ES0305838007 LT AAsf Affirmed AAsf Class B ES0305838015 LT AA-sf Affirmed AA-sf Class C ES0305838023 LT Asf Affirmed Asf Class D ES0305838031 LT BBB-sf Affirmed BBB-sf Class E ES0305838049 LT BB+sf Affirmed BB+sf Class F ES0305838056 LT BB-sf Affirmed BB-sf Transaction Summary The transactions are static securitisations of portfolios of fully amortising consumer loans originated by Banco de Sabadell, S.A. (Sabadell; BBB+/Stable/F2) to Spanish residents. All the loans have been granted to existing Sabadell clients. The pools comprise both pre-approved (64.1% and 84.4% of the total pool for Sabadell Consumo 2 and Sabadell Consumo 3, respectively) and on-demand loans for general purposes, such as home improvement, appliances and furniture and vehicle acquisition. The notes are amortising pro-rata with triggers to switch to sequential. Credit enhancement (CE) consists of structural subordination and a reserve fund that amortises with the collateralised notes' outstanding balance with a defined absolute floor. KEY RATING DRIVERS Rapid Increase of Defaults (Sabadell Consumo 3): The revision of the Outlooks on Sabadell Consumo 3's class B to F notes reflect the increased probability of downgrade in the short to medium term due to the rapid increase of defaults since the closing date in September 2024. The balance of gross cumulative defaults (defined as arrears over 90 days) was 2.6% of the initial pool balance as of December 2025, higher than the projected level under an evenly loaded default vector in a base case scenario, and marginally lower than the 2.9% trigger that activates the switch to sequential amortisation of the notes from pro rata. Fitch's base case lifetime default rate expectation remains 4.75% (see Rating Sensitivities). Asset Performance Expectations: Fitch's asset assumptions are unchanged for both transactions since the last review, with the exception of Sabadell Consumo 2's base case recovery rate. Fitch has revised this to 20% (from 16.9%) based on the observed and expected performance of the portfolio, and the revision of the 'AAA' recovery rate haircut to 50% (from 45%) considering the new base case. Credit Enhancement Trends: Fitch said, "We expect the CE ratios for Sabadell Consumo 2, to gradually increase as the reserve fund has reached its absolute floor and is not amortising while the transaction continues to amortise pro rata. We view the switch to sequential triggers as unlikely to be breached in the short term. For Sabadell Consumo 3, CE ratios will remain stable as long as pro-rata amortisation of the notes continues, but will increase for the senior notes if any of the switch to sequential amortisation triggers is breached. PIR Mitigated; Criteria Variation Removed: Fitch said, "For Sabadell Consumo 2, we view payment interruption risk (PIR) in the event of a servicer disruption as mitigated by the liquidity provided by a cash reserve fund that we deem sufficient to cover stressed senior fees, net swap payments and interest on the notes for more than three months while an alternative servicer arrangement was implemented. As the PIR exposure coverage is fully aligned with Fitch's Counterparty Rating Criteria, we have removed the previously applied criteria variation." RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Long-term asset performance deterioration, such as increased delinquencies or reduced portfolio yield, which could be driven by changes in portfolio characteristics, macroeconomic conditions, business practices or the legislative landscape. For instance, a 25% increase of defaults could lead to downgrades of up to three and four notches for Sabadell Consumo 2 and Sabadell Consumo 3 respectively. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Notes rated at 'AAAsf' are at the highest level on Fitch's scale and cannot be upgraded. - Increases in CE ratios as the transactions deleverage to fully compensate the credit losses and cash flow stresses commensurate with higher ratings may result in upgrades. DATA ADEQUACY Sabadell Consumo 2, FT, Sabadell Consumo 3, FT Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Prior to the transactions closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Prior to the transactions closing, Fitch conducted a review of a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. =========== T U R K E Y =========== ADM ELEKTRIK: Fitch Gives BB-(EXP) LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned ADM Elektrik Dagitim A.S. (ADM) an expected Long-Term Issuer Default Rating (IDR) of 'BB-(EXP)' with a Stable Outlook. Fitch has also assigned ADM's proposed notes an expected senior unsecured rating of 'BB-(EXP)' with a Recovery Rating of 'RR4'. Final ratings are contingent on the receipt of final documentation conforming to information already received and execution of the planned transaction. The rating reflects ADM's fully regulated revenues under a regulatory framework of fair investment renumeration and high insulation from price and volume risk, moderate leverage and solid operating performance. Rating constraints include geographical concentration and exposure to the Turkish operating environment, a regulatory framework prone to social or political pressure that may lead to revenue underperformance, and cash flow volatility, and high counterparty risk. The rating also factors in high foreign-exchange (FX) risks due to currency mismatch between revenue and debt, mitigated by some provisions of the regulatory framework. Key Rating Drivers Regulated Network Utility: ADM has an around 5% market share by distributed volumes and EBITDA of around USD180 million, and serves about 2.4 million customers across three provinces in south west Turkiye. Its business is fully regulated, with the Energy Market Regulatory Authority (EMRA) setting key regulatory parameters and distribution tariffs. ADM's electricity loss rate of 5.5%-6% is stronger than the regulatory target and Turkiye average. New Regulatory Period: In the fifth regulatory period (2026-2030), EMRA has kept fair regulation, reflecting real financing costs to safeguard network infrastructure investments. The real weighted average cost of capital (WACC) increased to 13.49% from 12.3% and will account for corporate tax rate changes. The capex reimbursement period remained supportive at 10 years. ADM's annual capex allowance in 2026-2030 increased by 40% in real terms from the previous regulatory period. An excess of 10% on top of allowed capex would normally be remunerated without being subject to EMRA approval (up from 5%). Regulatory Framework with Long Record: Turkish electricity distribution tariffs have been based on the regulated asset base since 2006 and are protected from volume and inflation risks. Any deviation of actual results from projected figures is corrected via tariffs with a moderate lag along with adjustments to compensate for the lag itself. The residual life of existing concessions is 13 years (until 2038), and Fitch understands that there is potential for its extension. Reasonable Tariff Growth: Fitch forecasts ADM's tariff will continue growing at slightly below inflation from 2026. The regulator increased the distribution fee by 34.5% from April 2025, broadly in line with Fitch's expectation for 2025 average inflation. Previous distribution fee indexations were 59% in July 2024 and 10% in July 2023. Regulatory Weaknesses: The regulatory framework in Turkiye has weaknesses, some of which have emerged since 2022 due to accelerating inflation and macroeconomic turbulence. They include delayed and insufficient tariff increases, mismatch between operating spending allowances and actual opex affected by high inflation, or delayed payments from the state. Regulatory decisions can be influenced by social and political pressure to cap utility bill growth. The cash flow predictability of Turkish network companies remains a negative outlier relative to utility peers in other markets. Challenging Operating Environment, FX Risk: FX volatility and operating environment risks in Turkiye weigh on the credit profile of Turkish distribution companies. The lira depreciated against the US dollar by 3.2x between end-2021 and end-2025, including by around 20% in 2025. The FX mismatch between ADM's fully US dollar-denominated debt after bond issuance and lira-denominated cash flows limits financial flexibility. However, this is mitigated by inflation-linked tariffs and ADM's limited leverage. Fitch forecast the lira will depreciate against the US dollar by 12%-14% a year in 2026-2027. Comfortable Headroom for Credit Ratios: Fitch said, "We forecast funds from operations (FFO) net leverage will remain below 2x and FFO interest coverage will improve to around 5.5x for 2026-2028, which is strong for the IDR. We forecast pre-dividend free cash flow will be negative at around USD66 million a year over 2026-2028, driven by capex of around USD240 million a year, and Fitch-projected working capital outflows, while EBITDA should gradually rise to around USD270 million by 2028. We believe ADM will be able to pay dividends, given Fitch's rating case and considering expected bond covenants." Standalone Profile Drives Rating: ADM's IDR is based on its Standalone Credit Profile (SCP). ADM's ultimate parent is Aydem Holding, which is present across the utility value chain in Turkiye. Fitch does not have sufficient information to determine the parent's SCP. ADM bondholders should benefit from ring-fencing mechanisms including covenants, restrictions on dividend payments, loans to the parent and other affiliate transactions. Fitch assumes the company will repay payables to related parties - treated as debt by Fitch - eliminating leakage of high cash interest to the parent. Fitch believes that after the issuance ADM's cash flows will be sufficiently insulated to support a standalone view. Peer Analysis ADM's closest peer in Turkiye is GDZ Elektrik Dagitim Anonim Sirketi (BB-/Stable), an electricity network also under control of Aydem Holding. GDZ and ADM operate under the same regulatory framework, service bordering regions of Turkiye and have comparable network quality. GDZ is marginally larger by EBITDA and distributed volumes. Both companies have same debt capacity and moderate leverage, reflected in the same rating. Zorlu Enerji Elektrik Uretim A.S. (B+/Negative) has slightly higher debt capacity than ADM as it is integrated across regulated networks business and quasi-regulated earnings in electricity generation under a renewable energy resources support mechanism with dollar-linked revenues. Zorlu's rating is one notch lower than ADM due to higher leverage. Nama Electricity Distribution Company SAOC (BBB-/Stable, SCP: bb+), an electricity network covering most of Oman, operates under a more transparent, stable and predictable regulatory framework, and benefits from larger size, higher profitability and lower FX risks than ADM. This results in Nama's SCP being two notches higher than ADM's despite the latter's lower leverage. Nama's rating benefits from a one-notch uplift for links with Oman. ADM is larger and has better asset quality than Georgia Global Utilities JSC (GGU, BB-/Positive, SCP: b+), a water network in Georgia. This is counterbalanced by a stronger operating environment. Both companies have a high FX mismatch between revenue and debt, and similar debt capacity. The Positive Outlook on GGU's IDR is driven by anticipated deleveraging and its rating also benefits from a one-notch uplift for parental support from FCC Aqualia S.A. (BBB-/Stable). Fitch's Key Rating-Case Assumptions - GDP growth in Turkiye of 3.5%-4.2% a year over 2026-2028 and inflation of 24% in 2026, 20% in 2027 and 15% in 2028 - Distribution fees increasing slightly below inflation from 2026 - Real returns on regulated asset base in 2026-2030 at 13.49% and capex reimbursement period of 10 years, as assumed by the regulatory framework - Capex moderately above the regulatory allowance - Dividends starting from 2028 at USD20 million-USD25 million a year - Cost of new debt in hard currency in line with similarly rated debt by Turkish issuers - Full repayment of payables to related parties in 2026 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool to produce the SCP: - Fitch assesses business and financial profile factors (assessment, relative importance) as follows: management (bbb-, lower); sector characteristics (bb, higher); market & competitive positioning (bbb, lower); diversification and asset quality (bb-, moderate); company operational characteristics (bb-, moderate); profitability (bb-, moderate); financial structure (a+, moderate); and financial flexibility (bb-, higher). - The quantitative financial subfactors are based on custom Corporate Rating Tool financial period parameters: 20% weight for historical 2024; 20% for forecast 2025; 20% for forecast 2026; 20% for forecast 2027; and 20% for the forecast year 2028. - The governance impact assessment of 'good' results in no adjustment. - the operating environment impact assessment of 'b+' results in an adjustment of -1 notch. - The SCP is 'bb-(EXP)'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Material weakening of the liquidity profile, for example, due to the inability to secure external funding to timely fund capex - FFO net leverage above 3.5x and FFO interest coverage below 3x, both on a sustained basis - A downward revision of Turkiye's 'BB-' Country Ceiling - Adverse regulation effects including delays or insufficient tariff increases, contraction of return on investments and excessive cash flow volatility Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upward revision of Turkiye's Country Ceiling, which would be a pre-requisite for an upgrade - Greater stability of the regulatory framework through consistent tariff adjustments as foreseen by regulation and reduced cash flow volatility, together with FFO net leverage below 2.5x and FFO interest coverage above 3.7x on a sustained basis Liquidity and Debt Structure Fitch views ADM's liquidity profile prior to refinancing as weak, but manageable. At end-September 2025, available cash of TRY83 million was insufficient to cover short-term debt of TRY4.0 billion. Liquidity risk is mitigated by the company's regulated business, which should ease access to bank funding. ADM plans to place Eurobonds to refinance most existing bank debt, payables to the parent and fund capex. In Fitch's view, refinancing will significantly improve the company's liquidity profile as ADM will face only minor external debt maturities of USD23 million a year in 2027 and 2028. Fitch forecasts that ADM will not need to raise new debt in 2026 or 2027. Issuer Profile ADM, controlled by Aydem Holding, is a Turkiye-based electricity distribution company serving the regions of Aydin, Denizli and Mugla, with around 5% market share of the country's distribution volumes. Summary of Financial Adjustments Fitch-calculated EBITDA and FFO include cash-effective capex and WACC reimbursements related to service concession arrangements, and exclude financial income accrued but not yet paid. Fitch includes interest-bearing other short-term payables to related parties in debt. ============= U K R A I N E ============= UKRAINIAN RAILWAYS: Fitch Cuts 2028 LPNs to D on Coupon Nonpayment ------------------------------------------------------------------ Fitch Ratings has downgraded JSC Ukrainian Railways' (UR) senior unsecured USD351.9 million 7.875% loan participation notes (LPNs) due July 2028 long-term rating to 'D' from 'C'. The LPNs are issued by UR's wholly owned UK-based special-purpose vehicle, Rail Capital Markets Plc. The downgrade reflects UR's uncured coupon non-payment on 2028 LPNs within the contractual grace period of five business days following a missed coupon payment due on 15 January 2026. Key Rating Drivers Default on LPNs: The downgrade of 2028 LPNs to 'D' from 'C' follows the expiration of the five-day grace period for the coupon payment due on January 15. Fitch considers an actual failure to pay interest or principal when due and payable according to the terms and conditions of the rated obligation, including any applicable grace period, as a default (denoted by a 'Restricted Default' (RD) or 'D' rating). The action follows the prior downgrade of UR's Long-Term Issuer Default Rating (IDR) to 'RD' from 'C' and the USD703.2 million 8.250% loan due in July 2026 (2026 LPNs) to 'D' from 'C' on 22 January 2026 due to an uncured non-payment on coupons on those LPNs. Expected Restructuring Despite Remote Maturity: Fitch expects that any potential restructuring of the 2026 LPNs will also include the 2028 LPNs, although their maturity falls in over two years in July 2028. Both LPN tranches had cross-condition clauses when restructured in December 2022 and in an unsuccessful consent solicitation attempt in December 2024. Fitch expects they would be included in any restructuring. To date, Fitch does not have any information regarding the potential conditions and timeline of the LPN restructuring. UR has close links to the Ukrainian government, which are underscored by the latter remaining in the lower speculative grade of 'CCC', indicating substantial credit risk as per Fitch's Ratings Definitions. The sovereign's weakened finances may weigh on UR's debt policy, and willingness and ability to service and repay debt, especially its US dollar LPNs, which comprise a large portion of UR's debt stock. Issuer Profile UR is the national integrated railway company with a natural monopoly in the rail sector in Ukraine. It is the largest employer in the country and plays a vital role in Ukraine's economy and labour market. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade UR's initiation of a bankruptcy protection procedure would result in a downgrade to 'D'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch will reassess the IDRs once UR completes the LPN restructuring process and returns to timely debt servicing. =========================== U N I T E D K I N G D O M =========================== EG GROUP: Fitch Rates New Term Loan B & Revolver Debt 'B+' ---------------------------------------------------------- Fitch Ratings has assigned EG Group Limited's proposed USD3.6 billion equivalent term loan (to be issued in two tranches by subsidiaries EG Finco Ltd and EG America LLC) and USD1.285 billion multi-currency revolving credit facility (to be issued in one tranche by these two subsidiaries) a 'B+' rating with a Recovery Rating of 'RR3'. Proceeds will be used to refinance the existing term loan and credit facility. Fitch has also affirmed EG Group's Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Rating Outlook. EG Group 's ratings reflect its elevated EBITDAR leverage and weak, albeit improving, fixed charge coverage metrics. These are balanced by the company's reasonable business profile with good diversification across geographies and contribution from the fuel and non-fuel segments. Fitch expects the company to continue applying proceeds from divestitures towards debt reduction, gradually improving EBITDAR leverage and fixed charge coverage as part of financial policy committed to deleveraging. Key Rating Drivers Deleveraging Actions: EG Group has completed or announced several deleveraging actions, in line with its public commitment to reduce leverage. The company completed the sale of its Italian operations to a consortium of Italian operators in December. Fitch said, "We anticipate that it will complete the sale of its Australian operations to Ampol, a listed Australian petroleum company, by mid-2026. EG Group has committed to use the approximately USD1.25 billion proceeds from the two divestitures to lower its debt, while these two disposals will lower EBITDA by about USD150 million." EBITDAR leverage could improve to about 5.8x on a pro forma basis in 2026 from about 6.3x in 2024 through debt reduction, somewhat offset by divested EBITDA. The timing to achieve these results is largely dependent on timing of debt reduction. Weak 2025 Profitability to Improve: Fitch said, "We expect a slight EBITDA decrease in 2025, following challenged YTD September performance driven by declines in comparable sales and fuel volumes in the U.S." Fitch expects the U.S. revenue to return to growth in 2026, as management focuses on increasing traffic with a competitive fuel pricing strategy. Fitch assumes the gradual increase of food service offering will drive margin up by 30bp by 2028. We also expect a material EBITDA margin improvement to 4.6% following the divestiture of its predominately fuel operations in Italy and Australia from the 4.0% range in 2023/2024. Improving Coverage Metrics in 2028: Fitch said, "We forecast improving, albeit weak EBITDAR fixed-charge coverage over the rating horizon. Coverage could improve from about 1.3x in 2024 to the mid-1x range in 2025/2026 and up to 1.8x in 2028. Projected improvement is primarily the result of lower interest expense from reduced debt levels." Moderate Leverage Reduction: Fitch expects EG Group's EBITDAR leverage to reduce gradually from about 6.3x in 2024 to 5.7x by 2028 as debt is repaid and EBITDA margin improves. This would mitigate part of the EBITDA decline from disposals. Negative FCF in 2026: Fitch said, "We forecast negative FCF generation in 2025 and 2026 at around negative USD50 million per year, affected by the payment of 2020 tax deferrals. FCF could turn positive in the USD125 million to USD165 million range in 2027/2028, given the completion of the tax deferrals and lower interest expense following debt repayment." Diversified, Large-Scale Operator: EG Group's rating remains supported by its scale and diversification. The company is a leading petrol filling station, convenience retail and foodservice operator, with good geographic diversification, although reduced by recently announced disposals. Pro forma for the announced disposals, EBITDA is essentially equally split between the U.S. and Europe. Its product and service diversification is reasonable, with non-fuel activities contributing around half of gross profit. Peer Analysis EG Group's business is broadly comparable to peers within Fitch's portfolio of fuel station operators and B-category retailers. EG Group can be compared with U.S.-based retailers Wayfair Inc. (B/Positive) and Northeast Grocery, Inc. (B+/Stable), as well as with Ireland and U.S. motorway service operator Causeway Consortium Limited (Applegreen, B-/Stable) and emerging-market petrol fuel station operators Puma Energy Holdings Pte. Ltd (BB/Stable) and Vivo Energy Ltd. (BBB-/Stable). Online furniture company Wayfair has a higher growth profile than EG Group, albeit in a more discretionary and therefore economically sensitive category. The Positive Outlook reflects the company's recently strong operating performance, which could yield EBITDAR leverage in the low-5x range, below that of EG Group. Grocery retailer Northeast Grocery is rated one notch higher than EG Group, reflecting its lower leverage and positive FCF. While EG Group benefits from larger scale and broader geographic diversification compared to these retailers, it has lower coverage metrics, higher leverage and consistently negative FCF. Relative to Applegreen, EG is meaningfully larger and more geographically diversified. This is partially offset by Applegreen's focus on markets with more stable demand and a lower reliance on fuel sales. EG Group had similar EBITDAR leverage (6.3x) as Applegreen (6.5x) in 2024. Puma and Vivo have lower leverage, but their ratings are restricted by concentration in emerging markets. This limits availability of cash flow to service debt at the holding company level. Fitch's Key Rating-Case Assumptions - Annual fuel volumes of about 14.8 billion liters in 2025, before falling to just over 12 billion liters in 2026 following the two disposals; - Improving fuel gross margin by 50bp by 2027, reflecting disposals; - Grocery and food services revenues to decline 6% in 2025 excluding impacts from disposals, driven by the US and full impact of 2024 rationalization, with over 100bp gross margin reduction; - Disposals are projected to drive a 21% decline in pro forma revenue. On a pro forma basis, total revenue is expected to grow 0.2% in 2026 and remain roughly flat in 2027-2028. Gross margin is expected to improve 20bp-30bps a year between 2026-2028. EBITDA margin, pro forma for disposals, to be 4.6% in 2025 and to improve to 4.9% by 2028 due to increased food services offering; - Deferred tax related cash outflows totaling USD200 million in 2025-2026; - Stable net working capital; - Annual capex of USD250-275 million; - Interest charges decreasing to around USD347 million in 2028, from around USD507 million in 2025; - No further M&A or dividends are assumed. Corporate Rating Tool Inputs and Scores Fitch scored EG Group Limited as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): - The business and financial profile factors are assessed (in the format of the 'assessment', followed by relative importance) as follows: Management ('bb-', moderate), Sector Characteristics ('bb+', lower), Market and Competitive Positioning ('bbb-', moderate), Diversification and Asset Quality ('bbb-', moderate), Company Operational Characteristics ('bb+', moderate), Profitability ('b+', moderate), Financial Structure ('b-', higher), and Financial Flexibility ('b-', higher). - The quantitative financial subfactors are assessed based on standard financial period parameters of 20% weight for 2024, 40% for the forecast year 2025 and 40% for the forecast year 2026. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'aa-' results in no adjustment. - B+ to CC considerations apply in Fitch's analysis and result in no adjustment. - The SCP is 'b'. Recovery Analysis Under Fitch's bespoke recovery analysis, higher recoveries would be realized by preserving the business model as a going-concern (GC), reflecting EG Group's structurally cash-generative business. The value from EG Group's site ownership is backed by reasonable assets, but the real value to creditors comes from such assets being operational rather than liquidated. Fitch said, "We assume EG Group's going concern (GC) EBITDA at USD800 million, reflecting our view of a sustainable post-reorganization EBITDA level on which we base the enterprise valuation (EV). Distress is likely to materialize from a deterioration of traffic on the company's sites, not adequately compensated by price increases and adversely affecting revenues and EBITDA margin." Fitch believes that a 5.5x multiple reflects a conservative view of the weighted-average value of EG Group's portfolio in distress. Under its criteria, Fitch assumes EG Group's revolving credit facility (RCF) and letter of credit facilities to be fully drawn or claimed. Fitch deducts 10% from EV for administrative claims. Fitch's waterfall analysis generates a ranked recovery for the senior secured facilities in the 'RR3' band, one notch up from the IDR. It incorporates pro forma debt as of January 2026: USD3.6 billion equivalent of new term loan B, USD1,285 million of RCF and USD2,172 million of senior secured notes, all ranking equally among themselves. Consequently, Fitch affirmed EG's existing secured debt at 'B+'/'RR3' except for the USD500 million notes due November 2028, which Fitch does not rate. Fitch expects ranked recovery, after further planned debt reduction in 2025 and 2026 Italian and Australian divestiture, to remain within the current 'RR3' band, as debt repayments are paired with a decrease of GC EBITDA. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Continued performance deterioration leading to a materially weaker EBITDA; -- EBITDAR leverage remaining above 7.0x on a sustained basis; -- EBITDAR fixed-charge cover consistently below 1.5x; -- Negative FCF margins leading to eroded liquidity headroom. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Sustained revenue and EBITDA expansion plus improving operating margins; -- Continued commitment to a financial policy conductive to EBITDAR leverage reducing comfortably below 6.0x on a sustained basis; -- EBITDAR fixed-charge cover approaching 2.0x on a sustained basis; -- Modestly positive FCF margins. Liquidity and Debt Structure At Sept. 30, 2025, EG Group had USD239 million of cash and approximately USD414 million of availability on its USD608 million RCF and overdraft facilities. Subsequent to quarter end, the company upsized the RCF and overdraft facilities to a total of USD630 million. Fitch views EG Group's liquidity as satisfactory, taking into account the flexibility in its growth capex. The company is proposing a USD3.6 billion equivalent term loan B, consisting of a USD and a EUR tranche, to refinance its existing, similarly sized term loans and a USD1.285 billion revolving credit facility to replace its current USD630 million RCF and overdraft facilities, as well as its USD515 million LoC facility. The new TLB and RCF will be due 2031 and 2030, respectively, and will rank pari passu with the senior secured notes. Issuer Profile EG Group is a leading global petrol filling station, convenience store and foodservice operator with operations in the U.S. and select European markets. HGH FINANCE: Moody's Affirms 'B2' CFR, Outlook Remains Stable ------------------------------------------------------------- Moody's Ratings has affirmed the B2 corporate family rating and B2-PD probability of default rating on HGH Finance Limited, an intermediate holding company of Howden Group Holdings ("Howden" or "the Group"). Moody's also affirmed the B2 rating on the backed senior secured bank credit facilities issued by HIG Finance 2 Limited and Hyperion Refinance S.a.r.l., the B2 backed senior secured notes issued by Howden UK Refinance plc, and the Caa1 rating on the backed senior unsecured notes co-issued by Howden UK Refinance 2 plc and Howden US Finance LLC. The rating outlook on all entities remains stable. RATINGS RATIONALE The B2 corporate family rating reflects the Group's strong market position and well-established franchise, which is underpinned by its solid growth track record. Howden is now one of the leading global insurance intermediaries, supported by a highly diversified earnings base, across multiple intermediary platforms and geographies, which provides resilience through the insurance pricing cycle. However, Howden's elevated leverage position, historically weak bottom line earnings and material ongoing cash outflows, have restricted financial flexibility. Such financial features stem from high financing costs associated with acquisitions and team hire-led growth strategies, common across the insurance broking sector and private equity ownership. In Moody's views, notwithstanding the increase in Howden's outstanding financial debt obligations over 2025, the group's financial resilience remains steady supported by its growing core earnings base, which enhances its capacity to absorb costs associated with its strategic initiatives. Moody's notes that the Group's growth strategy structurally inflates its leverage position, as measured by gross debt-to-EBITDA (calculated on a Moody's basis). This is because debt issued to finance growth initiatives is immediately reflected in the leverage ratio, while the EBITDA benefits can take several years to flow into the metric. Considering the expected growth in EBITDA on the back of recent initiatives, as well as the group's strong surplus cash, a portion of which is held in a locked account, pro-forma leverage remains within Moody's expectations for the current rating level. Moody's views favorably the group's entrance into the US retail market which, if successfully executed, will significantly enhance Howden's franchise and share of the global broking market, and further diversify its revenues and earnings. Over the course of 2025, Howden has made solid progress in building long term scale, predominantly through selective hires, and most recently via the acquisition of Atlantic Group. Moody's expects the group to sustain the rapid build-out of its US retail platform and report solid revenue growth over the next 12-24 months. However, it takes several years for new hires to generate expected run-rate EBITDA. Therefore, ongoing growth in the US, coupled with continued investment into capability building and central functions, will erode the group's profit margins, at least on a temporary basis. Nevertheless, Moody's expects EBITDA from Howden's existing core businesses to continue to grow with solid margins, even considering the expected dis-synergies from the US expansion, most notably within the wholesale/specialty business and DUAL, the group's MGA business. Ongoing lawsuits stemming from Howden's US expansion and associated large-scale hiring practices elevate litigation and operational risks. Moody's rating and outlook remain anchored in a central scenario that, notwithstanding material legal costs and likely settlements, the outcomes of these cases will not derail Howden's strategic growth trajectory in the US or significantly hamper revenue or earnings in other business segments. However, there is a risk that an adverse legal outcome—particularly if accompanied by sizeable damages or injunctions restricting further hiring activity—could slow the pace of US expansion, and weigh on cash flow and earnings for a prolonged period. OUTLOOK The stable outlook reflects Moody's expectations that, notwithstanding the ongoing lawsuits, Howden will continue to grow profitably, supported by recent organic and inorganic growth initiatives, underpinned by its ability to successfully integrate acquired companies and convert recruited teams into client wins. While Moody's expects leverage to remain elevated and EBITDA margins to dip on a temporary basis, Moody's believes the group retains a strong capacity to de-lever through organic EBITDA growth. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a rating upgrade include: (i) a debt-to-EBITDA ratio below 6.0x; (ii) (EBITDA-Capex) coverage of interest exceeding 3x on a sustained basis; (iii) free-cash-flow to debt ratio consistently exceeding 5%. Factors that could lead to a rating downgrade include: (i) a debt-to-EBITDA ratio above 7.0x; (ii) (EBITDA-Capex) coverage of interest consistently below 1.5x; (iii) a weakening in the group's liquidity or cash flow generation; (iv) a greater than expected adverse financial or business impact arising from the ongoing expansion into the US retail broking market, including earnings dis-synergies and legal costs. LIST OF AFFECTED RATINGS Issuer: HGH Finance Limited Affirmations: Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Outlook Action: Outlook, Remains Stable Issuer: HIG Finance 2 Limited Affirmation: Backed Senior Secured, Affirmed B2 Outlook Action: Outlook, Remains Stable Issuer: Hyperion Refinance S.a.r.l. Affirmation: Backed Senior Secured, Affirmed B2 Outlook Action: Outlook, Remains Stable Issuer: Howden UK Refinance plc Affirmation: Backed Senior Secured, Affirmed B2 Outlook Action: Outlook, Remains Stable Issuer: Howden UK Refinance 2 plc Affirmation: Backed Senior Unsecured, Affirmed Caa1 Outlook Action: Outlook, Remains Stable PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Insurance Brokers and Service Companies published in February 2024. The Group's "12-18 Month Forward View Weighted Average Factor Score" of B1 is one notch above the B2 "Reporting Period Annual Weighted Average Factor Score" and CFR reflecting Howden's elevated financial leverage position and relatively weak bottom line profitability, a feature of its growth strategy. PEACH PUB: FTI Consulting Named as Administrators ------------------------------------------------- The Peach Pub Company Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (CHD), Court Number CR-2026-000555, and Lindsay Kate Hallam, Oliver Stuart Wright, and Matthew Boyd Callaghan of FTI Consulting LLP were appointed as joint administrators on Jan. 27, 2026. The Peach Pub Company Limited trades as The Rose & Crown, The Fleece, The Fishes, and The Three Horseshoes, and specialized in licensed restaurants, public houses, and bars. Its registered office is at 21 Old Street, Ashton Under Lyne, Tameside, OL6 6LA. Its principal trading addresses are: 30 Market Place, Warwick, CV34 4SH 11 Church Green, Witney, OX28 4AZ North Hinksey Village, Oxford, OX2 0NA Letchmore Heath, Radlett, WD25 8ER The joint administrators can be reached at: Lindsay Kate Hallam Oliver Stuart Wright Matthew Boyd Callaghan FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, EC1A 4HD Tel No: +44 20 3727 1000 For further details contact: The Joint Administrators FTI Consulting LLP Email: revelcollectiveadministrators@fticonsulting.com PHARMANOVIA BIDCO: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg ------------------------------------------------------------------- Moody's Ratings has downgraded Pharmanovia Bidco Limited's (Pharmanovia or the company) long-term corporate family rating to Caa2 from Caa1 and its probability of default rating to Caa2-PD from Caa1-PD. Concurrently, Moody's also downgraded the ratings on the company's senior secured bank credit facilities to Caa2 from Caa1. The outlook was changed to negative from stable. RATINGS RATIONALE The rating action reflects Pharmanovia's debt purchase below par, which Moody's views as aggressive from a credit perspective, and the divestment of its business in China, which will limit the recovery potential of the company. Acquisitions or organic growth investments will likely be necessary to achieve a sustained capital structure, in Moody's views. The debt purchase of a notional amount of around EUR82 million, for around EUR50 million, is well below par and will result in limited deleveraging given the company's EUR1.1 billion of Moody's-adjusted debt. Any further debt purchases below par, however, could be considered a distressed exchange under Moody's definitions of default. Moody's expects performance from September 2025 to gradually improve, supported by (1) a EUR10 million run-rate cost-cutting initiative already executed; (2) progress on destocking while end-market demand remains steady, particularly for the non-China business; and (3) benefits from selected new launches underway and planned. Accordingly, the degree of recovery in fiscal 2027 and beyond, will depend on destocking progress and restoring sales to partners in its core portfolio and execution on its pipeline. However, previously, Moody's also anticipated additional recovery potential in fiscal 2027 and fiscal 2028 in the China business. Consequently, Moody's now see a longer path to returning to a sustainable capital structure. The ratings continue to additionally reflect the company's relatively small product portfolio and overall size, degree of product concentration and significant volatility in quarterly earnings with potential for organic revenue decline given its mature portfolio. Pharmanovia's ratings benefit from its diversification by geography and therapeutic area and asset-light business model, before acquisitions, resulting in solid Moody's-adjusted EBITDA margin potential. LIQUIDITY Pharmanovia's liquidity remains adequate. As of September 30, 2025, the company held cash of EUR19 million and EUR97 million was drawn under its senior secured first lien revolving credit facilities (RCF) of EUR203 million. The RCF is subject to a springing covenant once 40% is drawn, which Moody's do not anticipate the company to meet during fiscal 2026. Considering carve-outs for capital expenditures and M&A activity of up to EUR110 million, the company had EUR36 million of capacity under the RCF without breaching the covenant. Moody's also expects the second half cash flow (September 2025 to March 2026) to improve with potential for RCF paydowns if the company's expectations are met and considering the proceeds from disposals. Nevertheless, Moody's-adjusted free cash flow will remain negative for fiscal 2026 and Moody's expects further outflows in fiscal 2027 after deferred consideration payments. Earliest debt maturities (RCF) are in 2029. STRUCTURAL CONSIDERATIONS The Caa2 ratings on the senior secured first-lien term loan B3 and pari passu ranking senior secured first-lien RCF are in line with the CFR, reflecting the fact that they are the only financial instruments in the capital structure. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS Pharmanovia's exposure to environmental risks primarily reflects the fact that the company does not have any of its own manufacturing and has no direct environmental liabilities. The company does not have a history of material litigation and product liability risks are limited because it largely markets older molecules with a very well-established safety profile. Governance considerations were a key driver of the rating action and include Pharmanovia's relatively aggressive financial policy with high leverage, track record of substantial acquisitions partially financed by debt and debt purchases below par. It has a poor track record of adherence to budget expectations over the last two years and faced challenges in its supply chain and with distribution partners. In 2025, the company appointed a new CEO and CFO. OUTLOOK The negative outlook reflects the high leverage and uncertainty regarding the magnitude and timing of future improvements in operating performance as well as progress towards a sustainable capital structure. Moody's believes acquisitions or growth investments may be needed to achieve a sustainable capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Pharmanovia (1) delivers a substantial and sustained improvement in EBITDA on the back of an improving operating track record for its portfolio of assets, new launches and any acquisitions, and growing track record of meeting performance expectations; (2) achieves positive Moody's-adjusted free cash flow sufficient to allow for reinvestments in its pipeline or for acquisitions; (3) substantially reduces its Moody's-adjusted gross debt/EBITDA; and (4) maintains an at least adequate liquidity. The ratings could be downgraded if (1) there are further operating issues or identified issues are not resolved; (2) there is an inability to stabilize and improve organic EBITDA; (3) recovery expectations for lenders reduce further; (4) the liquidity position weakens or debt maturities approach without a clear path to refinancing. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Pharmaceuticals published in September 2025. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. CORPORATE PROFILE Pharmanovia is a specialty pharmaceutical company focused on commercialising and marketing a portfolio of established, off-patent and branded drugs, typically acquired from large pharmaceutical companies. It also focuses on specialty assets across therapeutic areas in select geographies with future growth potential. In fiscal 2025 (ended March 31, 2025) the company reported revenue of EUR331 million and company-adjusted EBITDA of EUR118 million (before exceptional items). POLARIS 2026-1: Fitch Gives B-(EXP) Rating to Class X2 Debt ----------------------------------------------------------- Fitch Ratings has assigned Polaris 2026-1 Plc expected ratings. The assignment of final ratings is contingent on the receipt of final transaction documentation conforming to information already reviewed by Fitch. RATING ACTIONS Entity/Debt Rating ----------- ------ Polaris 2026-1 Plc A XS3277921642 LT AAA(EXP)sf Expected Rating B XS3277922376 LT AA+(EXP)sf Expected Rating C XS3277923697 LT A+(EXP)sf Expected Rating D XS3277924232 LT BBB+(EXP)sf Expected Rating E XS3277922293 LT BBB(EXP)sf Expected Rating F XS3277922616 LT B+(EXP)sf Expected Rating X1 XS3277924315 LT BB-(EXP)sf Expected Rating X2 XS3277925122 LT B-(EXP)sf Expected Rating Transaction Summary Polaris 2026-1 PLC will be a securitisation of owner-occupied (OO) and buy-to-let (BTL) mortgages originated by UK Mortgage Lending Ltd, which is wholly owned by Pepper Money Limited. The loans are secured on properties located in the UK. The transaction includes primarily 2025 origination, with a small portion originated in 2026. This will be the 12th transaction in the Polaris series. KEY RATING DRIVERS Specialist Assets: The mortgage pool will comprise a mix of recently originated OO loans and a small portion of BTL loans (4.6%), Pepper has only recently resumed BTL lending. Pepper has a manual approach to underwriting, which is typical for specialist lenders, focusing on borrowers that do not qualify on high street lenders' automated scorecard criteria. Transaction Adjustment: Arrears performance data is weaker than at high street prime lenders, reflecting the originator's complex target market. The mortgage pool includes 20.6% of loans where the borrower has a county court judgement (CCJ), of which around 11.5% have a balance of greater than GBP1,000. About 66% of the pool is from Pepper's strongest products - '36' or '48' - representing the number of months since the last CCJ/default, but the remainder of the pool consists of products with more recent borrower CCJs/defaults. Shared ownership mortgages account for 8.8% of the pool. Fitch has applied a transaction adjustment of 1.25x to the foreclosure frequency (FF) to reflect the product mix and historical performance. In line with that for other specialist lenders, Fitch has increased the FF for self-employed borrowers in the OO sub-pool with verified income to 30%, instead of the 20% increase typically applied under the UK RMBS Rating Criteria. Product Switches Drive Excess Spread: The assets in the portfolio earn higher interest rates than typical prime mortgage loans. The current weighted average (WA) interest rate is currently 6.2%. However, excess spread will be reduced by the transaction's ability to retain product switches: up to 25% of the original balance of the loans (including prefunded loans) can be retained after a product switch. The minimum interest rate of the product switches is at a level that produces a post-swap margin of 2.0%. The point at which these loans are scheduled to revert from a fixed rate to the relevant follow-on rate will likely determine when prepayments occur. Fitch has therefore applied an alternative high prepayment stress that tracks the fixed-rate reversion profile (inclusive of retained product switches) of the pool. The prepayment rate applied is floored at the high prepayment rate assumptions produced by Fitch's analytical model ResiGlobal (UK) and capped at a maximum rate of 40% a year. Fixed Interest Rate Swap Schedule: The transaction will feature a fixed-to-floating interest rate swap to hedge the interest rate risk between the fixed-rate mortgage assets and the SONIA-linked notes. The swap has a defined notional schedule that incorporates an element of prepayment which increases over time. In Fitch's cash flow modelling, the combination of high prepayments and decreasing interest rates leads to the transaction being overhedged with swap payments senior to note interest. Prefunding: There will be an initial over-issuance of approximately a quarter of the notes. These additional funds can be used to purchase additional assets up until the first interest payment date. Fitch believes the conditions around the permitted pool of prefunded loans mitigates the risk of a material deterioration in the credit quality of the pool of assets. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transaction's performance may be affected by changes in market conditions and the economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce the credit enhancement available to the notes. In addition, unexpected declines in recoveries could result in lower net proceeds, which may make certain notes susceptible to potential negative rating action depending on the extent of the decline in recoveries. Fitch conducts sensitivity analyses by stressing a transaction's base-case foreclosure frequency (FF) and recovery rate (RR) assumptions. For example, a 15% WAFF increase and a 15% WARR decrease would result in model-implied downgrades of up to two notches for the class B, D and E notes, three notches for the class C notes, and one notch for the class F and X1 notes. The sensitivity will result in a downgrade of the class X2 notes to the distressed rating category. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable-to-improved asset performance driven by stable delinquencies and defaults would lead to increasing credit enhancement and potential upgrades. Fitch tested an additional rating sensitivity scenario by applying a decrease in the WAFF of 15% and an increase in the WARR of 15%, implying model-implied upgrades of one notch for the class D and three notches for the class C, E, F and X1 notes. There is no impact on the class B and X2 notes. The class A notes are already rated 'AAAsf', the highest level on Fitch's scale, and cannot be upgraded. POWERVAULT: Statement of Proposals Available from Administrators ---------------------------------------------------------------- A notice dated January 28, 2026 has been issued that, pursuant to Paragraph 49(6) of Schedule B1 to the Insolvency Act 1986, and Rule 3.37(1) of the Insolvency (England and Wales) Rules 2016, that members of Powervault Ltd. can write to the Joint Administrators at Menzies LLP, 4th Floor, 95 Gresham Street, London, EC2V 7AB for a copy of the Joint Administrators' Statement of Proposals for achieving the purpose of the Administration, which will be supplied free of charge. Powervault Ltd was placed into administration in the High Court of Justice under Court Number CR-008259-2025. Jonathan David Bass and Giuseppe Parla of Menzies LLP were appointed as Joint Administrators on November 21, 2025. REVEL COLLECTIVE: FTI Consulting Named as Administrators -------------------------------------------------------- The Revel Collective Plc was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (CHD), Court Number CR-2026-000561. Lindsay Kate Hallam, Oliver Stuart Wright, and Matthew Boyd Callaghan of FTI Consulting LLP were appointed as joint administrators on Jan. 27, 2026. The Revel Collective Plc, previously known as Revolution Bars Group Plc, specialized in the retail sale of beverages in specialised stores. Its registered office is at 21 Old Street, Ashton Under Lyne, Tameside, OL6 6LA. The joint administrators can be reached at: Lindsay Kate Hallam Oliver Stuart Wright Matthew Boyd Callaghan FTI Consulting LLP 200 Aldersgate, Aldersgate Street London, EC1A 4HD Tel No: +44 20 3727 1000 For further details contact: The Joint Administrators FTI Consulting LLP Email: revelcollectiveadministrators@fticonsulting.com VANQUIS BANKING: Fitch Alters Outlook on 'BB-' IDR to Positive -------------------------------------------------------------- Fitch Ratings has revised the Outlook on Vanquis Banking Group plc's (VBG) Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'BB-'. Fitch has assigned Vanquis Bank Limited (VBL), the group's main operating subsidiary, a 'BB-' Long-Term IDR with a Positive Outlook. Fitch has also assigned a group Viability Rating (VR) of 'bb-' and Government Support Rating (GSR) of 'ns' (no support) to both entities. Fitch now rates VBG under its Bank Rating Criteria rather than its Non-Bank Financial Institutions Rating Criteria as the group's business profile is now more similar to bank peers. The revision of the Outlook reflects the group's strengthening profitability and funding profile, which could support an upgrade if the business model proves more resilient as the group executes its strategy. Key Rating Drivers Deposit-Funded Consumer Lender: VBG's 'BB-' Long-Term IDR reflects the group's strengthening risk profile, profitability and funding franchise. However, the business model is concentrated in non-prime lending, a niche segment with more volatile earnings and weak asset quality, so the business profile has a strong impact on the VR. Fitch has assigned a group VR to VBL, in line with VBG, because it has substantially the same failure risk, given its high integration as the group's main operating company, representing a high proportion of group assets. Growth in Secured Lending: VBG lends primarily to non-prime UK consumers through credit cards and vehicle financing. Its strategy includes growth in somewhat lower-risk segments, such as second-charge mortgage loans, which offer lower margins than credit cards but also have lower impairment rates. As VBG's business model, including funding profile, is increasingly similar to bank peers, Fitch now rates VBG primarily under its Bank Rating Criteria. Reduced Consumer Redress Risk: Following UK Supreme Court rulings and subsequent guidance from the Financial Conduct Authority on redress for affected borrowers, Fitch no longer expect compensation costs to put significant pressure on VBG's business profile, profitability and capitalisation. The group has also made progress in improving and centralising its risk controls. Improved Asset Quality: The impaired loans ratio reduced significantly to 6.3% at end-1H25 from above 20% over 2018-2023 due to write-offs and debt sales, primarily in the vehicle finance segment. Fitch expects loan impairment charges as a proportion of average gross loans to broadly remain around the current levels of 6%-8%. Growth in second-charge mortgage loans will be slightly positive for asset quality compared with unsecured lending, in Fitch's view. Return to Profitability: Fitch expects VBG to return to profitability in 2025 following a significant loss in 2024, which was driven by the write-off of goodwill from acquisitions and intangible assets that do not support the current strategy. Fitch forecasts operating profit/risk-weighted assets (RWAs) to exceed 2% in 2026 and 2027, mainly driven by income growth but supported by further reductions in the group's cost base. Capitalisation Supporting Growth: Fitch expects the common equity Tier 1 (CET1) ratio to decrease due mainly to high loan growth, which Fitch forecasts at between 10% and 20% in 2026 and 2027. Stronger profitability and reduced downside risk from motor finance remediation reduces risks to capitalisation. However, Fitch's assessment also considers that CET1 headroom above regulatory requirements plus buffers of around GBP100 million is modest in absolute terms. Retail Deposit Funding: While VBG's retail deposits are price sensitive, they are broadly stable, given their granular nature, and have reduced reliance on wholesale funding. Deposits represented 85% of non-equity funding at end-1H25. Fitch expects the funding mix to remain broadly stable over the next two years, with the loans/deposits ratio remaining around 100%. Liquidity is strong, with a liquidity coverage ratio of 366% at end-1H25, and benefits from access to Bank of England facilities. The 'B' Short-Term IDR is the only option corresponding to the 'BB-' Long-Term IDR. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade VBG's Long-Term IDR could be downgraded if its CET1 ratio falls below 14% or if regulatory capital headroom reduces in absolute terms. It is also sensitive to lower-than-forecast capital generation if profitability does not increase in line with strategic targets, which could weaken Fitch's view of the strength of VBG's business model. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A strong and sustainable recovery in operating profitability with volatility in earnings at manageable levels could lead to an upgrade if capital buffers do not decrease in absolute terms. This would be supported by increasing scale and revenue diversification by business line, which would indicate a stronger business profile. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS VBG's senior unsecured debt programme is rated one notch below its Long-Term IDR, reflecting Fitch's expectation of below-average recovery prospects in the event of default. This is the typical notching under Fitch's Bank Rating Criteria when Fitch expects the stock of holding company senior and group junior debt to remain below 10% of RWAs and when the group has no resolution buffer requirement. Subordinated Tier 2 debt issued by VBG is rated two notches below its VR, in line with Fitch's baseline notching for loss severity. No Government Support Expected: The GSR of 'ns' reflects Fitch's view that senior creditors cannot rely on extraordinary support from the UK authorities if the group becomes non-viable, given its low systemic importance and UK legislation and regulations that require senior creditors to participate in losses after a failure. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES The Long-Term rating of VBG's senior unsecured debt programme is sensitive to changes in its Long-Term IDR. VBG's Subordinated Tier 2 debt rating is sensitive to changes in its VR. VR ADJUSTMENTS The VR of 'bb-' is below the 'bb' implied VR due to the following adjustment reason: business profile (negative) The business profile score of 'bb-' is below the 'bbb' category implied score due to the following adjustment reason(s): business model (negative), and market position (negative). The asset quality score of 'bb' is above the 'b & below' category implied score due to the following adjustment reason(s): historical and future metrics (positive). The earnings & profitability score of 'bb-' is below the 'a' category implied score due to the following adjustment reason(s): earnings stability (negative). The capitalisation & leverage score of 'bb' is below the 'aa' category implied score due to the following adjustment reason(s): risk profile and business model (negative). The funding & liquidity score of 'bb' is below the 'bbb' category implied score due to the following adjustment reason(s): deposit structure (negative). RATING ACTIONS Entity / Debt Rating Prior ------------- ------ ----- Vanquis Bank Limited LT IDR BB- New Rating ST IDR B New Rating Viability bb- New Rating Gov't Support ns New Rating Vanquis Banking Group plc LT IDR BB- Affirmed BB- ST IDR B New Rating Viability bb- New Rating Gov't Support ns New Rating senior unsecured LT B+ Downgrade BB- ********* 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 2026. 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 * * *