260327.mbx

260327.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, March 27, 2026, Vol. 27, No. 62 Headlines G E R M A N Y WINDMW GMBH: S&P Withdraws 'BB' Rating on Senior Secured Debt I R E L A N D CONTEGO CLO VI: Moody's Cuts Rating on EUR12MM Cl. F Notes to Caa1 EURO-GALAXY VIII: S&P Assigns B- (sf) Rating to Class F Notes PALMER SQUARE 2026-1: Fitch Assigns 'B-sf' Rating to Class F Notes PALMER SQUARE 2026-1: Moody's Assigns (P)Ba3 Rating to Cl. E Notes ST. PAUL'S III-R: Fitch Affirms 'B+sf' Rating on Class F-R Notes N E T H E R L A N D S WINTERSHALL DEA 2: Fitch Affirms 'BB' Hybrid Notes Rating P O L A N D G CITY EUROPE: Moody's Raises CFR to B2, Alters Outlook to Stable S P A I N ANSELMA ISSUER: S&P Raises Class B Sr. Secured Debt Rating to 'BB' GRIFOLS SA: S&P Rates Proposed $2BB Revolving Credit Facility 'BB-' T U R K E Y ARCELIK: S&P Cuts ICR to 'B+' on Protracted Deleveraging Prospects U K R A I N E PIVDENNYI BANK: Moody's Affirms Caa3 Deposit Rating, Outlook Stable U N I T E D K I N G D O M AUXEY MIDCO: Moody's Cuts CFR to B3, Alters Outlook to Negative CAPRI HOLDINGS: Fitch Affirms 'BB' Long-Term IDR, Outlook Negative MONTGOMERY SQUARE 1: S&P Assigns B- (sf) Rating to Class X Notes PALMER BARNES: Armstrong Watson Appointed as Joint Administrators X X X X X X X X [] BOOK REVIEW: Bendix-Martin Marietta Takeover War - - - - - ============= G E R M A N Y ============= WINDMW GMBH: S&P Withdraws 'BB' Rating on Senior Secured Debt ------------------------------------------------------------- S&P Global Ratings withdrew its 'BB' issue-level rating on WindMW GmbH's (WindMW) senior secured notes at the issuer's request. S&P also withdrew its recovery rating on the senior secured debt of '3' (50%-70%; rounded estimate 55%) on WindMW's senior secured debt. The outlook at the time of the withdrawal was negative. The negative outlook was assigned in September 2025, reflecting the refinancing risk related to WindMW's EUR119 million bullet maturity due June 2027. As of the time of the withdrawal, S&P did not receive sufficient information to change its view on the rating. ============= I R E L A N D ============= CONTEGO CLO VI: Moody's Cuts Rating on EUR12MM Cl. F Notes to Caa1 ------------------------------------------------------------------ Moody's Ratings has taken a variety of rating actions on the following notes issued by Contego CLO VI Designated Activity Company: EUR15,000,000 Class B-1 Senior Secured Fixed Rate Notes due 2034, Upgraded to Aa1 (sf); previously on Apr 15, 2021 Definitive Rating Assigned Aa2 (sf) EUR24,500,000 Class B-2 Senior Secured Floating Rate Notes due 2034, Upgraded to Aa1 (sf); previously on Apr 15, 2021 Definitive Rating Assigned Aa2 (sf) EUR12,000,000 Class F Senior Secured Deferrable Floating Rate Notes due 2034, Downgraded to Caa1 (sf); previously on Apr 15, 2021 Definitive Rating Assigned B3 (sf) Moody's have also affirmed the ratings on the following notes: EUR248,500,000 (Current outstanding balance EUR244,181,652) Class A Senior Secured Floating Rate Notes due 2034, Affirmed Aaa (sf); previously on Apr 15, 2021 Definitive Rating Assigned Aaa (sf) EUR28,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2034, Affirmed A2 (sf); previously on Apr 15, 2021 Definitive Rating Assigned A2 (sf) EUR23,000,000 Class D Senior Secured Deferrable Floating Rate Notes due 2034, Affirmed Baa3 (sf); previously on Apr 15, 2021 Definitive Rating Assigned Baa3 (sf) EUR22,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2034, Affirmed Ba3 (sf); previously on Apr 15, 2021 Definitive Rating Assigned Ba3 (sf) Contego CLO VI Designated Activity Company, issued in December 2018 and refinanced in April 2021, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield European loans. The portfolio is managed by Five Arrows Managers LLP. The transaction's reinvestment period ended in July 2025. RATINGS RATIONALE The upgrades on the ratings on the Class B-1 and B-2 notes are primarily a result of deleveraging of the senior notes following amortisation of the underlying portfolio since the end of the reinvestment period in July 2025; the downgrade to the ratings on the Class F notes is due to the deterioration of the key credit metrics of the underlying pool since the end of the reinvestment period in July 2025. The affirmations on the ratings on the Class A, Class C, Class D and Class E notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. The over-collateralisation ratios of the rated notes have deteriorated since the end of the reinvestment period in July 2025. According to the trustee report dated February 2026[1], the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 136.1%, 123.9%, 115.4%, 108.3% and 104.8% compared to July 2025[2] levels of 136.9%, 124.8%, 116.3%, 109.2% and 105.7%, respectively. In light of reinvestment restrictions during the amortisation period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analysed the deal assuming a higher likelihood that the collateral pool characteristics would maintain an adequate buffer relative to certain covenant requirements. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR382,291,353 Defaulted Securities: EUR7,485,881 Diversity Score: 57 Weighted Average Rating Factor (WARF): 3141 Weighted Average Life (WAL): 4.0 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.71% Weighted Average Coupon (WAC): 3.34% Weighted Average Recovery Rate (WARR): 44.1% Par haircut in OC tests and interest diversion test: 0% The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Moody's notes that the March 2026 trustee report was published at the time Moody's were completing Moody's analysis of the February 2026 data. Key portfolio metrics such as WARF, diversity score, weighted average spread and life, and OC ratios exhibit little or no change between these dates. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Collateralized Loan Obligations" published in October 2025. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank and swap provider(s), using the methodology "Structured Finance Counterparty Risks" published in May 2025. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. -- Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. -- Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes that, at transaction maturity, the liquidation value of such an asset will depend on the nature of the asset as well as the extent to which the asset's maturity lags that of the liabilities. Liquidation values higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. EURO-GALAXY VIII: S&P Assigns B- (sf) Rating to Class F Notes ------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Euro-Galaxy VIII CLO DAC's class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated class Z notes and subordinated notes. This is a European cash flow CLO transaction, securitizing a pool of primarily syndicated senior secured loans or bonds. The portfolio's reinvestment period will end approximately 4.50 years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payment. The portfolio is well diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,619.18 Default rate dispersion 598.50 Weighted-average life (years) 4.57 Obligor diversity measure 151.00 Industry diversity measure 23.36 Regional diversity measure 1.21 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.57 Target 'AAA' weighted-average recovery (%) 37.18 Target weighted-average spread net of floors (%) 3.47 Target weighted-average coupon (%) 4.48 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. Rating rationale The portfolio is well diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we modeled the EUR350 million target par amount, the targeted weighted-average spread of 3.47%, the targeted weighted-average coupon of 4.48%, and the target weighted-average recovery rate at all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate with higher ratings than those we have assigned. However, as the CLO will be in its reinvestment period from closing until Sept. 25, 2030, during which the transaction's credit risk profile could deteriorate, we have capped our ratings on the notes. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A to F notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A to E notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Euro-Galaxy VIII CLO DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. PineBridge Investments Europe Ltd. is the collateral manager. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 213.50 39.00 Three/six-month EURIBOR plus 1.29% B AA (sf) 38.50 28.00 Three/six-month EURIBOR plus 1.85% C A (sf) 24.50 21.00 Three/six-month EURIBOR plus 2.15% D BBB- (sf) 25.20 13.80 Three/six-month EURIBOR plus 2.95% E BB- (sf) 15.90 9.26 Three/six-month EURIBOR plus 5.15% F B- (sf) 9.60 6.51 Three/six-month EURIBOR plus 8.76% Z NR 0.20 N/A N/A Sub notes NR 28.60 N/A N/A *The ratings assigned to the class A and B notes address timely interest and ultimate principal payments. The ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. PALMER SQUARE 2026-1: Fitch Assigns 'B-sf' Rating to Class F Notes ------------------------------------------------------------------ Fitch Ratings has assigned Palmer Square European CLO 2026-1 DAC's notes final ratings, as detailed below. Entity/Debt Rating ----------- ------ Palmer Square European CLO 2026-1 DAC Class A XS3276225102 LT AAAsf New Rating Class B XS3276225367 LT AAsf New Rating Class C XS3276225797 LT Asf New Rating Class D XS3276226092 LT BBB-sf New Rating Class E XS3276226258 LT BB-sf New Rating Class F XS3276226415 LT B-sf New Rating Subordinated Notes XS3276226761 LT NRsf New Rating Transaction Summary Palmer Square European CLO 2026-1 DAC is a securitisation of senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds were used to fund a portfolio with a target par of EUR500 million. The portfolio is actively managed by Palmer Square Europe Capital Management LLC. The collateralised loan obligation (CLO) has a 4.6-year reinvestment period and a 7.5-year weighted average life (WAL) test at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch places the average credit quality of obligors at 'B+'/'B'. The Fitch weighted average rating factor of the identified portfolio is 22.7. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate of the identified portfolio is 62.3%. Diversified Asset Portfolio (Positive): The transaction includes various other concentration limits, including a maximum exposure to the three-largest Fitch-defined industries in the portfolio at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction includes two matrices effective at closing with fixed-rate limits of 5% and 10%, and two forward matrices effective 18 months after closing, with the same fixed-rate limits. All four matrices are based on a top 10 obligor concentration limit of 20%. The closing matrices correspond to a 7.5-year WAL test, while the forward matrices correspond to a seven-year WAL test. The transaction has a 4.6-year reinvestment period and includes reinvestment criteria like those of other European transactions. Fitch's analysis is based on a stressed portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. WAL Step-Up Feature (Neutral): The transaction can extend the WAL test by one year exactly 12 months after closing. The extension is subject to conditions, including passing the portfolio profile tests, collateral quality tests and the collateral principal amount with defaulted assets carried at their collateral value being equal to, or greater than, the reinvestment target par balance. Cash Flow Modelling (Positive): The WAL used for the Fitch-stressed portfolio analysis was reduced by 12 months. This is to account for the strict reinvestment conditions envisaged after the reinvestment period. These include passing the coverage tests and the Fitch 'CCC' maximum limit and a WAL covenant that progressively steps down over time. In Fitch's opinion, these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A to D notes, lead to a downgrade by one notch of the class E notes and to below 'B-sf' on the class F notes. Downgrades may occur if the loss expectation is larger than assumed, due to unexpectedly high levels of default and portfolio deterioration. The class B, D and F notes each have a rating cushion of two notches, whereas the class C notes have a cushion of three notches, due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR s and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades two notches for the class A notes, three notches each for the class B, C and E notes, one notch for the class D notes and to below 'B-sf' on the class F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to two notches each for the notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than-expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses on the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the rating agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Palmer Square European CLO 2026-1 DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. PALMER SQUARE 2026-1: Moody's Assigns (P)Ba3 Rating to Cl. E Notes ------------------------------------------------------------------ Moody's Ratings announced that it has assigned the following provisional ratings to the notes to be issued by Palmer Square European Loan Funding 2026-1 Designated Activity Company (the "Issuer"): EUR340,000,000 Class A Senior Secured Floating Rate Notes due 2035, Assigned (P)Aaa (sf) EUR45,500,000 Class B Senior Secured Floating Rate Notes due 2035, Assigned (P)Aa2 (sf) EUR27,300,000 Class C Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)A2 (sf) EUR25,700,000 Class D Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)Baa3 (sf) EUR23,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)Ba3 (sf) RATINGS RATIONALE The rationale for the rating is based on a consideration of the risks associated with the CLO's portfolio and structure as described in Moody's methodologies. The Issuer is a static cash flow CLO. The issued notes are collateralized primarily by broadly syndicated senior secured corporate loans. The portfolio is fully ramped up as of the closing date and comprises of predominantly corporate loans to obligors domiciled in Western Europe. Palmer Square Europe Capital Management LLC ("Palmer Square") may sell assets on behalf of the Issuer during the life of the transaction. Reinvestment is not permitted and all sales and principal proceeds received will be used to amortize the notes in sequential order. In addition to the five classes of notes rated by us, the Issuer has issued EUR39.9m of Subordinated Notes which are not rated. The transaction incorporates interest and par coverage tests which, if triggered, divert interest and principal proceeds to pay down the notes in order of seniority. Methodology underlying the rating action: The principal methodology used in these ratings was "Collateralized Loan Obligations" published in October 2025. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Moody's modeled the transaction using a cash flow model based on the Binomial Expansion Technique, as described in Moody's methodologies. Moody's used the following base-case modeling assumptions: Par Amount: EUR500m Diversity Score: 63 Weighted Average Rating Factor (WARF): 2740 Weighted Average Spread (WAS): 3.39% Weighted Average Coupon (WAC): 2.90% Weighted Average Recovery Rate (WARR): 43.99% Weighted Average Life (WAL): 4.63 years ST. PAUL'S III-R: Fitch Affirms 'B+sf' Rating on Class F-R Notes ---------------------------------------------------------------- Fitch Ratings has upgraded St.Paul's CLO III-R DAC's class C-R and D-R notes and affirmed the rest. Entity/Debt Rating Prior ----------- ------ ----- St. Paul's CLO III-R DAC A-R XS1758464090 LT AAAsf Affirmed AAAsf B-1-R XS1758464330 LT AAAsf Affirmed AAAsf B-2-R XS1758464686 LT AAAsf Affirmed AAAsf C-R XS1758464926 LT AA+sf Upgrade AAsf D-R XS1758465220 LT A+sf Upgrade Asf E-R XS1758465659 LT BB+sf Affirmed BB+sf F-R XS1758465816 LT B+sf Affirmed B+sf Transaction Summary St.Paul CLO III-R DAC is a cash flow CLO mostly comprising senior secured obligations. The transaction is actively managed by ICG Manager Limited and exited its reinvestment period in January 2022. KEY RATING DRIVERS Amortisation Benefits Mezzanine Notes: The transaction has continued to deleverage with the class A-R notes further amortising by EUR138 million since the last review in May 2025, leading to an increase in credit enhancement across the structure. According to the February 2026 trustee report, the transaction has accumulated EUR22.2 million in cash, which Fitch expects to increase credit enhancement further following the next payment date. The increase in credit enhancement drives the upgrade of the class C-R and D-R notes. Junior Notes Sensitive to Deterioration: The transaction is 3.5% below par, versus 4.5% below par in the last review. Reported defaults amounted to EUR11.6 million. The class F par value test is currently failing by a small margin. The high 'CCC' exposure in the portfolio means additional defaults may erode the default rate cushion of the class F notes. However, any downgrade would likely be within the 'Bsf' category. Transaction Outside Reinvestment Period: The transaction is failing several tests, some of which must be satisfied after any reinvestment, effectively preventing the manager from reinvesting prepayments or sales proceeds since April 2024. As the transaction is restricted from reinvesting, its analysis of upgrade sensitivity is based on the current portfolio rather than a Fitch-stressed managed portfolio. Fitch stressed the current portfolio by downgrading any obligor on a Negative Outlook by one notch (with a floor at CCC-), and by applying a floor to the portfolio's weighted average life at four years, in line with its criteria. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B-'. The weighted average rating factor of the current portfolio is 31.6 as calculated by Fitch under its latest criteria. About 23.7% of the portfolio is currently on Negative Outlook. Portfolio Diversification: The top 10 obligor concentration as calculated by the trustee is 31.8%, which exceeds the test limit of 21% and has increased from 23% at the last review. However, the portfolio is well-diversified across countries and industries with exposure to the three largest Fitch-defined industries at 28.6%, as calculated by the trustee, which is below the test limit of 40%. No obligor represents more than 3.9% of the portfolio balance. High Recovery Expectations: Senior secured obligations comprise 97.9% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio is 58.9% (based on the most recent criteria). Model Implied Rating Deviation: The class C-R notes are rated one notch below their model-implied rating. The rating deviation reflects the mezzanine position of the notes exposing them to greater obligor concentration risk as the portfolio amortises and loan count decreases. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades, which are based on the current portfolio, may occur if the loss expectation is larger than assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the rating agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for St. Paul's CLO III-R DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. ===================== N E T H E R L A N D S ===================== WINTERSHALL DEA 2: Fitch Affirms 'BB' Hybrid Notes Rating --------------------------------------------------------- Fitch Ratings has affirmed Harbour Energy PLC's (Harbour) Long-Term Issuer Default Rating (IDR) and senior unsecured rating at 'BBB-'. The Outlook on the IDR is Stable. Fitch has also affirmed the senior unsecured rating of the notes issued by Wintershall Dea Finance B.V. at 'BBB-' and the subordinated rating on the hybrid notes issued by Wintershall Dea Finance 2 B.V. at 'BB'. Harbour's IDR reflects its large scale of operations, stable production profile, and robust geographic and asset diversification. Recent acquisitions have enhanced the company's business profile, which Fitch expects to deliver financial synergies. However, these debt-funded transactions have resulted in increased financial leverage. Fitch expects Harbour's funds from operations (FFO) net leverage to rise to 3.5x in 2027 before declining towards its revised negative sensitivity of 2.5x, based on Fitch's oil and gas price assumptions. Rating constraints are a shorter reserve life and a weaker production cost profile than peers'. Key Rating Drivers Credit-Accretive M&A: Harbour announced acquisitions of LLOG Exploration Company LLC (LLOG) and almost all the subsidiaries of Waldorf Energy Partners Ltd and Waldorf Production Ltd (together Waldorf) in 4Q25. The acquisitions strengthen Harbour's business profile through higher production and improved diversification. Fitch expects consolidated production increasing to 500 thousand barrels of oil equivalent per day (kboe/d), up from 474kboe/d in 2025. The LLOG acquisition helps Harbour establish a presence in the deepwater Gulf of Mexico (Gulf of America) and provide a strategic entry into the US market. Waldorf's assets enhance Harbour's scale in the UK North Sea and provide financial synergies, including the release of an estimated USD350 million cash currently posted to secure decommissioning liabilities and the addition of Waldorf's UK ring-fenced tax losses. Increased Leverage: Harbour raised USD2.0 billion of debt to fund the recent acquisitions. Fitch expects FFO net leverage to peak at 3.5x in 2027 but to quickly reduce below 2.5x by 2028 as the acquired assets are fully integrated and synergies are realised. This reflects Harbour's focus on debt reduction following acquisitions. Fitch expects Harbour's financial policy to remain prudent after the LLOG and Waldorf acquisitions while it implements its newly announced payout ratio-based shareholder return policy. Fitch has relaxed Harbour's EBITDA net leverage and FFO net leverage sensitivities by 0.5x, as its substantial increase in scale and geographical diversification after successive acquisitions supports a higher debt capacity. Positive M&A Record: Harbour has successfully integrated previous acquisitions, such as its reverse merger with Premier Oil or its acquisition of substantial assets of Wintershall Dea. High Tax Reduces Debt Capacity: Fitch projects Harbour's EBITDA net leverage to remain at less than 2.0x on average over 2026-2029. However, its FFO net leverage is affected by substantial tax payments due to its presence in high tax jurisdictions such as Norway and the UK. This is partly offset by the USD0.9 billion of UK tax effected losses acquired with Waldorf. Fitch forecasts FFO net leverage to rise in 2027, before falling to 2.5x in 2028. Possible temporary deviations such as during periods of lower oil and natural gas prices could lead to corrective actions such as opex, capex and/or dividend cuts. Reserve Life Weaker Than Peers: Harbour's 2P reserves have increased to 1.4 billion boe after its successive acquisitions over the last couple of years. However, its 2P reserve life at eight years is shorter than that of peers like Aker BP ASA (11 years on a 2P basis) or Energean plc (24 years on a 2P basis). This is mitigated by Harbour's substantial pro-forma 2C resource base at 1.9 billion boe. Average Production Costs, Decommissioning Obligations: Fitch expects Harbour's operating costs to be just below USD15/boe, which Fitch views as average. UK-focused Ithaca Energy plc's production costs are about USD20/boe, while Aker BP's are USD6.2/boe. Harbour's decommissioning provisions relative to 2P reserves should fall to about USD4/boe. Ithaca's USD7.5/boe and Aker BP's USD2/boe. However, projected decommissioning pre-tax expenses of USD350 million-400 million a year will affect cash flows. Peer Analysis Harbour's production of 474kboepd in 2025 is in line with that of peers such as Aker BP (BBB/Stable; 420kboe/d), Continental Resources (BBB/Stable; 456kboe/d), and APA Corporation (BBB-/Stable; 464kboe/d). APA Corporation and Harbour have similar geographically well-diversified asset portfolios. By contrast, Continental Resources focuses solely on onshore US assets, while Aker BP's operations are concentrated in Norway. Harbour's reserve life, at eight years on a 2P basis, is weaker than peers', reflecting its mature asset base in the UK Continental Shelf. Aker BP's 2P reserve life is 11 years, while both US peers show much higher reserve profiles. Operating costs for Harbour's combined assets amount to just below USD15/boe, which is notably higher than Aker BP's USD6.2/boe. Both Aker BP and Harbour have large tax burden adversely affecting debt capacity. Harbour's FFO net leverage is higher at about 2.5x compared with Aker BP's 2x mid-cycle. It is also higher relative to its US peers; Fitch expects APA and Continental to maintain EBITDA net leverage below 1.5x and 1x, respectively. Fitch’s Key Rating-Case Assumptions - Oil and gas prices in line with Fitch's base case price deck - Production volumes averaging 500kboe/d a year - Capex at about USD1.9 billion a year (excluding expensed exploration costs and decommissioning charges) - Decommissioning charges at USD350 million-400 million a year - Equity credit for EUR1.8 billion hybrid bonds at 50% 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 (bb+, Moderate), Market and Competitive Positioning (bbb, Higher), Diversification and Asset Quality (bbb-, Moderate), Company Operational Characteristics (bb, Higher), Profitability (bbb, Moderate), Financial Structure (bbb-, Moderate), and Financial Flexibility (a, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2025, 10% for the forecast year 2026, 30% for the forecast year 2027, 30% for the forecast year 2028 and 20% for the forecast year 2029. - 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 - Failure to replenish reserves and maintain a stable production profile - FFO net leverage consistently above 2.5x or EBITDA net leverage consistently above 2x - Aggressive M&A, dividend payments or other policies materially affecting the credit profile and leading to consistently negative free cash flow Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Material improvement in the business profile, including a much higher reserve life - Adherence to a conservative financial policy with FFO net leverage below 1.5x or EBITDA net leverage below 1x on a sustained basis Liquidity and Debt Structure Harbour's liquidity remains comfortable with cash and cash equivalents at USD846 million at end-2025. This is bolstered by a USD3 billion revolving credit facility (RCF), of which USD2.3 billion was undrawn at end-2025. The RCF is set to mature in 2029. Short term maturities at end-2025 were USD238 million. Harbour raised USD2 billion debt to fund recent acquisitions, resulting in cash outflow of USD2.5 billion. Issuer Profile Harbour is an independent oil and gas exploration and production company. It is domiciled in the UK while its main assets are located in the UK, Norway, Germany, North Africa, North America and Latin America. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals Harbour's 2024 Climate VS was 51 out of 100, indicating a high risk from energy transition. This is in line with the industry average. At present this risk does not have a material influence on the rating, given the very long-term timescale over which the transition may take place, uncertainty regarding the extent and nature of changes, and the response of markets and companies to them. Fitch expects about 50% of Harbour's pro-forma output to be natural gas, on a through-the-cycle basis, which has lower Climate VS than oil due to its lower CO2 emissions and better demand prospects as a bridge fuel, offering it some protection. However, its upstream focus results in overall higher long-term Climate VS score than more integrated peers'. ESG Considerations Harbour has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to significant decommissioning obligations, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Wintershall Dea Finance 2 B.V. Subordinated LT BB Affirmed BB Wintershall Dea Finance B.V. senior unsecured LT BBB- Affirmed BBB- Harbour Energy PLC LT IDR BBB- Affirmed BBB- senior unsecured LT BBB- Affirmed BBB- =========== P O L A N D =========== G CITY EUROPE: Moody's Raises CFR to B2, Alters Outlook to Stable ----------------------------------------------------------------- Moody's Ratings has upgraded the long-term corporate family rating of G City Europe Limited (GCE or the company) to B2 from B3. Concurrently, Moody's upgraded GCE's subordinated notes to Caa1 from Caa2 and the Atrium Finance PLC's (Atrium) backed senior unsecured euro medium term notes to B2 from B3. The outlook on both entities has been changed to stable from positive. RATINGS RATIONALE The upgrade reflects an improved standalone liquidity and leverage profile of G City Europe (GCE) as well as continued robust rental growth of GCE's real estate portfolio. After further disposals at the end of 2025, the company has repaid its 2025 unsecured bond in full and built up a material cash position to address its 2027 bond maturity and further delever its balance sheet. Material uncertainty remains with respect to GCE's use of proceeds. GCE received EUR322.8 million in cash by end of January 2026 from its recent sale of 3 Polish malls, in addition to a non-cash component that effectively reduced its hybrid bond exposure. The pro-forma cash balance covers non-discretionary capital spending and further debt repayment requirement into 2027. At the same time, the company has been making excess funds available to its parent (Israeli listed company G City Ltd.) in the past, either through direct loans, vendor loans, dividends or through granting of security for parent debt. Moody's understands a material share of G City Ltd.'s consolidated cash reserves are on the GCE level, amplifying the risk. Further uncertainty stems from G City Ltd.'s direct exposure to geopolitical risk arising from the conflict in the Middle East involving Israel, which could weaken its access to funding. G City Ltd. also closed a mandatory offer for further shares in Citycon Oyj that resulted in some cash outflows in March 2026. However, the standalone profile of G City Europe is stronger than the B2 rating suggests, factoring in the uncertainty created by the governance, leverage and liquidity risk to its parent company. Financial leverage metrics position the company strongly for its B2 rating, but are currently not the main driver of the rating. Moody's-adjusted debt/gross assets improved materially during 2025 from 55.9% to 37.9% as of FY 2025, driven by a repayment of debt from disposals as well as the removal of a guarantee for a parental loan secured by one of the sold assets. Moody's expects Moody's-adjusted debt/assets to remain at or below its current level, and expect a repayment of the remaining unsecured bond maturing in 2027. Moody's-adjusted Net Debt/EBITDA will remain in the 7x-10x range compared to 7.9x as of FY 2025, while EBITDA/Interest will decline well below the current 2.1x as of FY 2025 with refinancings, lower EBITDA from disposals and hybrid step-ups. RATIONALE FOR THE RATING OUTLOOK The stable outlook balances GCE's low balance-sheet leverage for its rating and strong operating performance with ongoing uncertainty relating to the company's shareholder distributions and upstreaming of cash. LIQUIDITY Liquidity is appropriate pro forma for the disposal proceeds received post reporting period. The main risk to liquidity stems from further lending to its parent under the related party RCF. GCE had EUR58 million of cash & cash equivalents available as of December 2025, but received EUR322.8 million in disposal proceeds for its sale of 3 assets that closed end of 2025. GCE has no third-party RCF but has built up claims against its parents under an RCF that Moody's estimates above EUR160 million pro forma for the repayment of the claim linked to the recent disposal and some further RCF drawings in February 2026. When it comes to uses of liquidity, GCE has one secured loan maturing in November 2026, secured by Wars Sawa Junior. Given recent major refurbishments Moody's expects the asset to maintain lender interest allowing for a new / extended loan. Moody's estimates a moderate amount of capital spending for 2025 before larger build to rent assets, its ongoing Wars Sawa Junior and an extension of its Promenada assets will require additional capital spending until 2027. GCE announced a EUR90 million dividend that was paid in January 2026. This rating action is predicated upon Moody's baseline scenario which assumes a short-lived conflict in the Middle East, likely a matter of weeks. Nevertheless, Moody's recognizes that GCE's parent is exposed to a further deterioration in the Middle East conflict, which may have more consequential impact on GCE's creditworthiness. STRUCTURAL CONSIDERATIONS Secured loans represent the majority class of debt in the capital structure and rank ahead of senior unsecured debt and hybrid debt. The financial flexibility is declining with the expected encumbrance of further assets to generate liquidity. At this point Moody's continues to reflect the fact that the hybrid bonds provide subordination support to the senior unsecured notes, which results in the backed senior unsecured note rating being aligned with the CFR. Further asset encumbrance can nevertheless result in a downgrade of the backed senior unsecured note due to subordination. The Caa1 rating on the subordinated hybrid notes issued by G City Europe reflects the deeply subordinated nature of the hybrid notes. The subordinated hybrid are treated as debt in Moody's credit metrics. The first reset date for the subordinate hybrid notes is in 2026. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade could occur Moody's get more comfortable with GCE's governance related to the upstreaming of cash through RCF and dividend payments. Further requirements to facilitate an upgrade include -- Moody's-adjusted debt/total assets to remain well below 50% -- EBITDA/Interest remains above 1.6x -- Comfort about the parent's financial position and its influence on GCE's financial and liquidity policy -- The company's small size will also limit rating upside. Factors that could lead to a downgrade -- Failure to secure liquidity to fully address the 2027 bond maturity -- Further material cash payments or an increased exposure to the parent entity or a deterioration of credit quality of G City Ltd. -- Operational weakness in the company's retail assets -- Moody's-adjusted debt/total asset deteriorates above 55% -- Moody's-adjusted fixed charge cover drops below 1.4x The backed senior unsecured note rating may get notched down from the corporate family rating if the amount of unencumbered assets continue to shrink relative to unsecured debt. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in March 2026. The rating is lower than the scorecard indicated outcome due to concerns about governance risk and credit linkage with the parent company. PROFILE G City Europe owns a EUR1.1 billion portfolio of 6 retail properties, 3 residential assets, and 1 office building as of December 2025. The company generated net rental income of EUR76.2 million as of December 2025. The company is focused on its business in Poland. G City Europe is a private subsidiary of G City Ltd., an Israel-listed property company. ========= S P A I N ========= ANSELMA ISSUER: S&P Raises Class B Sr. Secured Debt Rating to 'BB' ------------------------------------------------------------------ S&P Global Ratings raised its S&P Underlying Rating (SPUR) on Anselma Issuer S.A.'s Class A debt and the issue rating on its Class B senior secured debt to 'BB', from 'BB-', with the '3' recovery rating on the class B debt unchanged. S&P also affirmed its 'AA' issue rating on the Class A senior secured debt, for which the outlook remains stable, mirroring that on monoline insurer Assured Guaranty (Europe) S.A. (AGE; AA/Stable/--). The stable outlook on class A SPUR and class B issue rating reflects our expectation that the project will maintain sufficient production levels to receive the full amount of the Rinv and absorb the risk of sudden spikes in negative price-hours. The outlook further reflects our expectation that the project will receive waivers for a potential event of default (EoD), despite the debt service coverage ratio (DSCR) falling below the default trigger for the June 2026 payment date. S&P said, "We think Anselma Issuer S.A.'s headroom to withstand unfavorable market conditions from frequent negative electricity prices has increased significantly, following the publication of the final version of the 2026-2028 technical parameters on Feb. 4, 2026. "We think the reduction of the minimum production threshold provides meaningful protection to the project's cash flows against spikes in difficult-to-predict negative price-hours and operational issues, as we now estimate that on average Anselma's plants need to achieve about 35% of our production forecasts to receive full remuneration on the investment (Rinv; about 80% of total revenue)." In 2021, Anselma issued EUR125 million class A and EUR77.96 million class B senior secured, pari passu, fully amortizing, fixed-rate bonds due Dec. 31, 2038. The debt is serviced through regulated cash flows from the operations of 18 solar photovoltaic (PV) plants and proceeds from the sale of energy in the pool market. Situated throughout Spain and commercially operational since 2007 or 2008, the plants benefit from specific remuneration regimes for renewable projects. They have a nominal capacity totaling 35.34 megawatts (MW) and consist of 92% crystalline silicon modules and 8% cadmium telluride thin film modules from 17 manufacturers. The inverters are 87.4% central and 12.6% string, provided by 10 manufacturers. Eiffage Energia S.L.U. provides operations and maintenance (O&M) services, while Verbund Green Power Iberia S.L.U. (Verbund GP-I) acts as asset manager. Anselma's resilience to heightened market volatility has increased with the final version of the 2026-2028 technical parameters. This is an unexpected and positive development compared with the draft parameters published Nov. 7, 2025, which was the basis of our rating action on Anselma on Dec. 18. In fact, final parameters have lowered the minimum production threshold required to achieve the full Rinv by 55% compared with the 2023-2025 semiregulatory period. This is higher than the 25% reduction envisaged under the draft published in November. S&P said, "We think this provides a material safety net against spikes in negative price-hours, which do not qualify for Rinv remuneration and whose increase remains difficult to predict. In fact, we now estimate that negative price-hours would need to increase above 65% of our estimated production before the project's plants start losing Rinv, all things being equal. This compares with about 16% negative price-hours recorded in 2025, up from 8% in 2024. We integrate the positive impact of these changes to the minimum production thresholds into the revision of our business risk assessment to '4' from '6', which led us to raise both the SPUR on Anselma's class A debt and the issue rating on the class B debt to 'BB', from 'BB-'." S&P said, "We anticipate the project has headroom to withstand operational underperformance or curtailment risk, although lower production could erode covenant headroom. Pool revenue and remuneration on operation (Ro) are still fully exposed to operational issues and curtailment risk. As a result, covenant headroom could shrink under scenarios of lower production, limiting project rating upside. In fact, in line with PV peers, during 2025, Anselma's portfolio underperformed our production forecast by about 6%, reflecting in part the unprecedentedly low irradiation levels that materialized in Spain over the past 24 months. We estimate that, even if plants underperformed our production forecasts by 20% annually, Anselma would maintain a median DSCR of 1.18x over the project's lifespan (see chart). This supports Anselma's credit quality, whose plants have also been affected by thefts, inverter failures and damages caused by adverse weather conditions, such as those in Spain during the first two months of 2026. Although Anselma's portfolio has not experienced material curtailment so far, it remains a possibility because PV plants now have the same priority of dispatch as other renewables. Assets have been operational since 2007, so we expect the project to execute maintenance plan to ensure their continuous operational performance. "We do not anticipate the conflict in the Middle East will cause a material upward shift in solar captured prices in Spain because the market remains oversupplied. If solar capture prices were to increase significantly beyond the government capture prices of about EUR36/MWh, EUR34/MWh, and EUR34/MWh for 2026, 2027, and 2028, respectively, Anselma's DSCRs would benefit in the short term, but the over-remuneration would be offset with lower Rinv revenue for the remaining regulatory life, as happened during the 2020-2022 semiregulatory period, leading to lower DSCRs in the long term. Although we don't consider this a likely scenario, we estimate that if capture prices increased to EUR50/MWh in 2026-2028, all other things being equal, average DSCRs from 2029 onward would be about 4 basis points lower than our base-case scenario, which would leave headroom under our current rating on Anselma. We will continue monitoring how Spanish solar capture prices evolve, particularly during the second quarter, when solar production and electricity demand increase due to summer cooling needs. Nevertheless, we expect that solar oversupply (S&P Global Energy estimates that 6 GW of solar power will be connected to the grid over 2026, followed by 5 GW in 2027) will keep pressure on prices during the daily hours of solar production, which are less affected by evolution of gas prices. "We expect the project will post a DSCR below the 1.05x default threshold for the June 2026 payment date. As a result, we expect the project will be in an EoD, because the project was under-remunerated during the 2023-2025 semiregulatory period due to the regulator's theoretical prices being significantly higher than actual solar prices. This will be offset through the rest of the project's life, resulting in higher expected ratios from 2026 onward. Given the constructive relationship between Anselma and the controlling creditor, we expect the EoD for the next payment date will be waived on time, as happened at the end of last year, when the controlling creditor waived the December 2025 DSCR (0.81x) on Dec. 23. "The stable outlook on our issue rating on Anselma's class A notes mirrors the outlook on the guarantor, AGE. "The stable outlook on the class A SPUR and class B issue rating reflects our expectation that, following recent changes in the regulatory framework and the reduction of the minimum production threshold included in the final version of 2026-2028 technical parameters, the project will maintain sufficient production to ensure full Rinv revenue, and that downside scenarios from the risk of increasing negative price-hours are mitigated. The outlook further reflects our expectation that the project will receive waivers for a potential EoD on time, despite the DSCR falling below the default trigger in the first half of 2026. "We could lower our issue rating on the class A notes or revise the outlook to negative if we take a similar action on AGE." S&P could lower the SPUR on the class A notes and the issue rating on the Class B if one or more of the following materializes: -- S&P said, "Negative price-hour increases and persisting weaker operational performance, or higher curtailment orders than what we assume in our base-case forecast, materially reduce cash flow. We see this scenario as unlikely, as the favorable changes in regulation under the 2026-2028 technical parameters significantly mitigate risks to project cash flow"; or -- The potential EoD is not waived on time. S&P could raise its issue rating on the class A notes or revise our rating outlook to positive if it was to take a similar action on AGE. A positive rating action on the Class A SPUR and Class B issue rating would require clarity about the project's ability to maintain stronger ratios, including DSCR comfortably above 1.15x in the next few semesters, to ensure sufficient covenant headroom. This could result from visibility over negative hours, curtailment risk, and operational performance. GRIFOLS SA: S&P Rates Proposed $2BB Revolving Credit Facility 'BB-' ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue rating to Grifols S.A.'s proposed senior secured EUR2.198 billion-equivalent euro- and U.S. dollar-denominated seven-year term loan B (TLB), in line with the issuer credit rating. S&P Global Ratings also assigned a 'BB-' issue rating to the proposed new $2 billion 6.5-year revolving credit facility (RCF). The new instruments will be issued by Grifols International Services Designated Activity Co. in Ireland and Grifols International Services USA Inc. in the U.S., both financial subsidiaries under the restricted group. Proceeds will be used to refinance the EUR2.198 billion-equivalent existing euro- and U.S. dollar-denominated TLB maturing in 2027, while the new RCF is intended to replace the existing $983 million revolving facility with maturity in 2027. S&P said, "The recovery rating on the proposed instruments is '3', reflecting our expectation of meaningful recovery prospects (50%-70%; rounded estimate: 60%). The recovery rating is constrained by the large amount of senior secured debt in the capital structure. "Our 'BB-' rating and stable outlook on Grifols S.A. are supported by our expectation that the group will continue generating healthy free operating cash flow in 2026 of around EUR400 million and deleveraging its capital structure, such that S&P Global Ratings-adjusted debt to EBITDA declines to around 5.0x in 2026, from 5.4x in 2025. Under our base case for 2026, strong performance in the immunoglobulin franchise should more than offset pricing pressure in the albumin business, supporting further revenue and EBITDA growth. "Yesterday's announcement by the company of its intention to initiate an IPO for its U.S. biopharma business has no immediate impact on our ratings, given the very early stage of the process. We will likely reassess the impact once there is greater visibility." =========== T U R K E Y =========== ARCELIK: S&P Cuts ICR to 'B+' on Protracted Deleveraging Prospects ------------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on Arcelik to 'B+' from 'BB-'. S&P also lowered its issue-level ratings on its senior unsecured notes to 'B' from 'B+'. The negative outlook reflects the risk that challenging economic conditions in Turkiye and other key markets will result in even weaker performance, while domestic interest rates remain very high, not allowing for any improvement in leverage and interest coverage. S&P said, "The rating action reflects Arcelik's significant underperformance relative to our base-case forecasts in 2025, and our expectations of the delayed deleveraging prospects until at least 2027. The group's main metrics in 2025 compare with our previous forecasts of adjusted debt to EBITDA of about 4.4x, negative FOCF of about TRY1.7 billion, and EBITDA interest coverage of about 1.2x. For 2026 we forecast moderate improvement, but at about 5.7x-5.8x and 1.2x-1.3x and negative FOCF of about TRY7.5 billion-TRY8 billion, they remain well below our previous forecasts. We forecast overall revenue growth of about 20%-23%, of which 2%-3% organic and the rest through currency translation effects from a weakening Turkish lira. Arcelik's base business remains challenged across main markets (notably Turkiye and Europe) by weak consumer confidence, which necessitates promotional activity. The latter supported the group's outperformance of a declining Turkish market in 2025 while regaining some lost market share in Western Europe toward the end of 2025. In 2026, we forecast S&P Global Ratings' adjusted EBITDA margins to improve toward 5.3% (4.8% in 2025) helped by material cost savings from streamlined European operations and productivity initiatives. We anticipate capex to remain broadly flat at about EUR200 million (about TRY10.1 billion at the current exchange rate), based on our estimate of the group's flexibility and deleveraging priority. That said, FOCF is set to remain negative for another year, due in part to final cash outflows (EUR50 million or about TRY2.5 billion-equivalent) linked to the restructuring of European operations. We further assume no dividends or acquisitions, and about $64 million (about TRY2.85 billion-equivalent) cash inflows from the sale of shares in Koç Finansman A.Ş. (Koc Finans) to Ford Otomotiv Sanayi A.Ş (Ford Otosan)." Further material improvement in the group's free cash flow generation and debt reduction hinges on the successful materialization of large cost savings of about EUR300 million by 2027, and improving demand conditions across main markets. In total, Arcelik anticipates about EUR300 million (about TRY15 billion-equivalent amounts based on current exchange rate) of cost savings by the end of 2027. In 2025 the company reported about TRY8.6 billion cash outflows linked to these activities, with further about TRY2.85 billion expected in 2026. S&P said, "From an operational standpoint, we understand that the company has largely completed the European footprint restructuring effort, following the one plant closure in Italy and three in Poland. The company intends to leverage its more cost-efficient Turkish facilities for exports of higher-margin more premium stock keeping units as part of its value-oriented growth strategy. Overall capacity utilization at about 75% points to an ability to meet possible future demand recovery without new investments. In our base case we therefore assume annual capital spending (capex) to remain broadly stable in 2027, or about TRY11 billion. In the current environment, we forecast no shareholder distributions or acquisitions, and full focus on debt reduction in line with stated management priority. Assuming the company is successful in extracting the announced savings, we forecast our adjusted debt to EBITDA ratio will progressively reduce toward 5x or slightly below with EBITDA interest coverage recovering to or marginally above the 1.5x threshold with FOCF emerging to positive figures in 2027. Although a great improvement to the numbers in 2024-2025 and our projections for 2026, we see these cash flow and interest coverage metrics as still comparatively weak for a 'BB-' rating." S&P said, "The negative outlook reflects the sensitivity around our base case from ongoing weak overall demand across main markets and possible second-order effects from the conflict in the Middle East. We think most of the drivers from 2025 across end markets will continue to persist, notably consumers delaying significant purchases in case of need, with strong promotional activity and ongoing competitive pressures. Further risks could come from the second-order effects of the ongoing conflict in the Middle East. In revenue terms the region only accounts for about 4%-5% of total revenue, and Arcelik has not seen significant impact on its sales activities thus far. However, significant and prolonged spike in oil and energy prices could derail the positive trend in inflation reduction and interest rate cuts in Turkiye, while creating pressures on consumer demand. We note that the company's hedging for key materials covers the first half of 2026, thus leaving exposure to possible high commodity inflation and other costs for the second half of the year and into 2027. These could markedly erode the benefits from the savings following the restructuring of the European operations. High inflation and reversal of the downward trend in borrowing rates could prevent Arcelik from emerging into sustainably positive cash flows after financing costs, particularly in its domestic Turkish operations where average borrowing costs were about 31% at year-end 2025." Positively, the group remains well funded and has tackled the key Eurobond maturity in 2026 with cheaper financing alternatives, which underpins the current ratings and outlook. Over the course of 2025 Arcelik secured the refinancing of the upcoming EUR350 million green bond maturity due May 2026 through bilateral loans and similar instruments. After the refinancing, we estimate that the weighted average debt maturity profile of the capital structure will improve to above two years, from slightly less than two years at the end of 2025. The group now does not face significant refinancing needs until September 2028 when its $500 million senior notes are due. Despite the sizable short-term debt, mainly linked to the group's working capital needs, Arcelik remains well funded and continues to benefit from good access to bank loans thanks to its blue-chip status in most of its end markets. With the forecast deleveraging in 2026, S&P estimates the group's headroom under certain bank loan covenants of debt to EBITDA of no higher than 3.8x, according to the company's calculation, will gradually improve in the coming quarters. Its compliance with this ratio in 2025 was supported by cash inflow of about TRY5.3 billion from sale of shares to its majority parent, Koc Holding. Medium- to long-term demand across end markets remains supportive of the group's deleveraging prospects. According to Euromonitor International, the global consumer appliances industry (76.5% of Arcelik's 2025 revenue) is set to grow about 1.4% and 4.4% on a constant adjusted growth rate in volumes and value volumes between 2025-2030. Meanwhile, consumer electronics (4.8% of group revenue) are set to grow by about 2.5% in volumes and 6.4% in value volumes over the same period. Secular trends, like growth in home laundry and refrigeration appliances in emerging markets, and microwaves and dishwashers in developed markets, remain key growth drivers. Demand for appliances is set to remain generally flat in 2026, following growth of about 1.5% in 2025, while electronics exhibit stronger growth prospects. From a regional perspective Asia-Pacific (about 10% of Arcelik's revenue) appears the most challenged region for near-term growth prospects amid the challenging consumer environment, particularly in China. That said, Arcelik's revenue in China is relatively limited and the group has seen market recovery in Pakistan in 2025, with a promising outlook for 2026. Despite difficult near-term prospects, S&P thinks Arcelik remains well positioned to remain resilient and defend its market share, particularly supported by its product portfolio, with a wide price point coverage. The company intends to prioritize investments in 2026 in the more premium Whirlpool and Bauknecht brands in key regions, notably Western Europe. S&P said, "The negative outlook reflects the downside risks to our current base case in the next 12-18 months stemming from weaker consumer demand and high borrowing costs pressuring the group's credit metrics. "We could lower the rating on Arcelik in the next 12-18 months if we observe further material deviation from our base case, such that profitability fails to rebound significantly above 5%. This would keep the adjusted EBITDA interest coverage ratio at around 1x with stronger negative FOCF. This could occur if we observe material weakening in consumer demand, or a significant spike in inflation such that it erodes the benefits from leaner operations following the restructuring effort. Downside risks could also occur if borrowing costs do not continue the downward trajectory in key regions, notably Turkiye and Europe, thus preventing the group from returning to sustainably positive FOCF generation. "We could revise the outlook on Arcelik to stable if the group markedly and sustainably outperformed our base case, resulting in EBITDA interest coverage improving to 1.5x, and be on course for sustainably positive FOCF generation. We believe such a scenario could occur if the material cost savings from the restructuring program, alongside resilient demand, translate into stronger improvement in adjusted EBITDA margins and cash flows. Under such a scenario we would also observe broadly stable to further reducing borrowing costs, notably in Turkiye." ============= U K R A I N E ============= PIVDENNYI BANK: Moody's Affirms Caa3 Deposit Rating, Outlook Stable ------------------------------------------------------------------- Moody's Ratings has affirmed Pivdennyi Bank, JSCB (Pivdennyi Bank)'s long-term and short-term bank deposit ratings of Caa3 and NP respectively. Moody's also affirmed the long-term Counterparty Risk Ratings (CRRs) and Counterparty Risk (CR) Assessment of the bank of Caa3 and Caa3(cr) respectively, as well as the short-term CRRs and CR Assessment of NP and NP(cr) respectively. The bank's long-term National Scale bank deposit rating and long-term National Scale CRR have also been affirmed at Caa2.ua. At the same time, Moody's affirmed the bank's Baseline Credit Assessment (BCA) of ca and Adjusted BCA of ca. The outlook on the bank's long-term bank deposit ratings remains stable. RATINGS RATIONALE Pivdennyi Bank's ca BCA remains constrained by the Government of Ukraine's (Ca stable) sovereign rating, reflecting strong interlinkages and a high correlation between the sovereign's creditworthiness and that of bank. Pivdennyi Bank is highly exposed to the domestic operating environment and dependent on macroeconomic conditions in Ukraine. While the BCA captures the bank's elevated solvency risks, risks to depositors remain partly mitigated by Pivdennyi Bank's strong liquidity profile. As a result, the bank's Caa3 long-term bank deposit ratings continue to reflect an expected loss level consistent with the Caa3 rating level (between 65-80%), one notch above its BCA. Pivdennyi Bank's asset risk reflects sectoral concentrations in its predominantly corporate loan book and a sizeable exposure to domestic sovereign securities, equivalent to around 2.5 times of tangible common equity (TCE). Moody's expects asset quality will be broadly stable although borrower repayment capacity will remain under pressure given the challenging operating environment. These risks are partly offset by the bank's sound loss-absorption capacity, supported by specific provisioning and regulatory capital buffers that remain comfortably above minimum requirements. Capitalisation is further supported by internal capital generation, and Moody's expects regulatory capital metrics to remain broadly stable over the outlook period. As of year-end 2025, the bank reported Common Equity Tier 1 and total capital ratios of 13.7% and 13.8%, respectively, while its TCE ratio stood at 18.7% as of June 2025. Profitability is expected to remain resilient despite operating challenges. Earnings are supported by solid net interest income from lending activities and still-high yields on investments in sovereign securities and National Bank of Ukraine certificates of deposit, as reflected in a net interest margin of 5.6% during the first six months of 2025. However, bottom-line performance will remain pressured by elevated operating expenses related to the wartime environment and the reimposition of a 50% windfall tax on 2026 profits, as opposed to the standard 25% tax rate. As a result, while earnings generation remains adequate to support capital, net income growth is expected to remain moderate. Net income accounted for 3.6% of tangible assets during the first six months of 2025. The bank's funding profile reflects a material reliance on confidence-sensitive corporate deposits, which represented 64% of total deposits as of June 2025. This results in less stable funds amounting to 29% of tangible banking assets and increases the bank's sensitivity to potential deposit outflows. These risks are mitigated by strong liquidity buffers, including a core banking liquidity ratio of 35.6% as of June 2025, and solid regulatory liquidity metrics, with reported LCR and NSFR of 230% and 181%, respectively, as of December 2025. OUTLOOK The stable outlook on Pivdennyi Bank's long-term bank deposit ratings reflects Moody's expectations that the bank will maintain a broadly stable solvency and liquidity profile over the next 12–18 months. This expectation is underpinned by Pivdennyi Bank's sound profitability, as well as solid capital and liquidity buffers which balance non-lending credit risks, sectoral concentrations and a considerable reliance on less-stable funding. The stable outlook is also aligned with the stable outlook on the Government of Ukraine. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure on Pivdennyi Bank's BCA is limited by the sovereign rating constraint at Ca. As such, an upgrade of the bank's BCA would likely follow an upgrade of Ukraine's sovereign rating. Conversely, Pivdennyi Bank's ratings could be downgraded if the operating environment deteriorates further, indicated by a downgrade in Ukraine's sovereign rating. Downward pressure on the long-term bank deposit ratings could also arise if the expected loss for depositors and senior creditors increases to a consistent with the Ca rating level. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in November 2025. Pivdennyi Bank, JSCB's "Assigned BCA" score of ca is set three notches below the "Financial Profile" initial score of caa1 to reflect the sovereign rating constraint. =========================== U N I T E D K I N G D O M =========================== AUXEY MIDCO: Moody's Cuts CFR to B3, Alters Outlook to Negative --------------------------------------------------------------- Moody's Ratings has downgraded the long-term corporate family rating of Auxey Midco Limited, the holding company of Alexander Mann Solutions (AMS), to B3 from B2 and its probability of default rating to B3-PD from B2-PD. Concurrently, Moody's downgraded to B3 from B2 the ratings on the GBP40 million backed senior secured first-lien revolving credit facility (RCF) due 2027, the GBP115 million backed senior secured first-lien term loan B1 (TLB) due 2027, both issued by Auxey Bidco Ltd, and the amortising $332.5 million backed senior secured first-lien term loan B1 due 2027 issued by Alexander Mann Solutions Corporation; both issuers are fully owned subsidiaries of Auxey Midco Limited. The outlook for all entities has been changed to negative from stable. The rating action reflects: -- Heightened refinancing risk with debt maturities in April and June 2027 -- Continued pressure on operating performance in 2026 with a degree of uncertainty around the timing of a meaningful recovery in revenue growth to levels before the cyclical downturn which commenced in 2023 -- Elevated leverage metrics in 2025 at Moody's-adjusted debt to EBITDA 8.2x in 2025 reducing to 6x in Moody's case for 2026. RATINGS RATIONALE The downgrade reflects AMS's weaker-than-expected operating performance, with revenue growth remaining subdued and elevated leverage, despite cost-saving initiatives and some improvement in market conditions. In 2025, growth in revenue was a low single digit percentage, reflecting some client losses and lower-than-expected volumes, mainly in the pharma industry. New contract wins in Q4 2025 will not contribute meaningfully before H2 2026. Moody's-adjusted debt to EBITDA remained high in 2025 at 8.2x, reflecting weak earnings and high non-recurring restructuring costs, which Moody's expenses. Although leverage is expected to decline in 2026 to around 6x, this improvement is highly dependent on margin improvements from prior restructuring actions and a sharp reduction in exceptional costs. The rating also reflects continued refinancing risk, with AMS's RCF and invoice discounting facilities maturing in April 2027, and TLBs maturing in June 2027. While the company has taken steps to start to address upcoming maturities, including extending the maturity of its revolving credit facility in February 2026 by 4 months to April 2027 and initiating discussions regarding potential refinancing options, execution risk remains high given the current leverage profile and the cyclical nature of the staffing sector. LIQUIDITY Liquidity is weak over the next 12-18 months, primarily driven by the heightened refinancing risk. The company ended 2025 with GBP39.9 million of cash on balance sheet. The GBP40 million RCF and the GBP60 million invoice discounting facilities were undrawn as of December 2025 and are available for intra year working capital management; both facilities mature in April 2027. The TLBs mature in June 2027. ENVIRONMENTAL SOCIAL AND GOVERNANCE AMS's exposure to environmental, social and governance mainly reflects the company's elevated governance risk resulting from the company's concentrated ownership with a single controlling shareholder which also controls the board. Social risks are in line with the company's peers in the recruitment sector, which are related to cybersecurity, talent retention, processing of sensitive personal information and the introduction of new technologies. OUTLOOK The negative outlook mainly reflects the refinancing risk of the April 2027 and June 2027 debt maturities and a degree of uncertainty around the timing of a meaningful recovery in revenue growth to levels before the cyclical downturn which commenced in 2023. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure on the rating is unlikely in the near term but could develop if AMS demonstrates a sustained improvement in operating performance, with Moody's-adjusted debt to EBITDA declining to around 5.5x or below, and retained cash flow to net debt trending towards 15%, while maintaining adequate liquidity and achieving refinancing ahead one year ahead of maturities. Downward pressure could arise if revenue growth does not materialise, margins deteriorate, or leverage increases above 7.0x on a sustained basis. Persistent negative Moody's-adjusted free cash flow or delays in addressing upcoming debt maturities could also put further pressure on the rating. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in February 2026. 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 Auxey Midco Limited is the holding company of Alexander Mann Solutions, a global provider of talent acquisition and workforce solutions, operating primarily in Recruitment Process Outsourcing and contingent workforce services. AMS serves more than 200 clients across multiple industries and operates in over 120 countries. The AMS's group will report net fee income of around GBP431 million, and company adjusted EBITDA of GBP63.2 million for the year ended December 2025. CAPRI HOLDINGS: Fitch Affirms 'BB' Long-Term IDR, Outlook Negative ------------------------------------------------------------------ Fitch Ratings has affirmed Capri Holdings Limited's Long-Term Issuer Default Rating (IDR) at 'BB'. The Rating Outlook remains Negative. Capri's 'BB' rating and Negative Outlook reflect ongoing topline and EBITDA declines in its portfolio as it works to stabilize performance at the Michael Kors and Jimmy Choo brands, while facing challenging industry headwinds. The rating reflects Capri's reasonable EBITDAR leverage, which Fitch expects to decline from 3.3x in fiscal 2025 to 2.7x in fiscal 2026 (ending March 2026), aided by Capri's deployment of proceeds from the Versace sale towards debt repayment. Fitch could revise Capri's Outlook to Stable if evidence shows the company can improve its topline trajectory and stabilize EBITDA meaningfully above $300 million. Key Rating Drivers Ongoing Operational Challenges: EBITDA declined to $275 million for the LTM period ending Dec. 27, 2025 from $445 million for the LTM period ending Dec. 28, 2024, driven by topline deleveraging, and gross margin contraction primarily related to tariff cost pressures. This compares to EBITDA, proforma for the Versace sale, of approximately $700 million in fiscal 2024 and a peak of $1.1 billion in fiscal 2022. Capri has underperformed since early 2023, driven in part by management missteps and underinvestment, which have exacerbated brand-specific issues at Michael Kors. In early 2025, Capri laid out a strategy to stabilize the portfolio. Key initiatives include correcting its pricing strategy, addressing product offerings, revitalizing the Michael Kors store base and stabilizing the wholesale and outlet channels. Fitch believes these are reasonable focus areas; however, given the company's recent history, Fitch views execution risk as elevated. Topline declined in the mid-single digits for the LTM period ending Dec. 27, 2025, although Fitch expects some improvement in fiscal 2027, with revenue growth turning flat to positive in the second half of the year. Recent Versace Sale: On Dec. 2, 2025, Capri completed the sale of Versace for $1.395 billion to Prada S.p.A. Capri used the proceeds to repay $700 million in term loan borrowings in addition to approximately $700 million in revolver borrowings. As of Dec. 27, 2025, Capri's total borrowings outstanding was $221 million, relative to $1.77 billion as of Sept. 27, 2025. Versace generated approximately $820 million in revenue and breakeven EBITDA for the fiscal year ended March 29, 2025. At its peak in fiscal 2022, Versace generated approximately $1.1 billion in revenue and $235 million in EBITDA. The Versace sale decreases the overall brand, geographic, and product profile diversification of the portfolio, with Versace being more heavily skewed toward apparel, Asia, and men's products relative to Michael Kors and Jimmy Choo. However, Fitch acknowledges that post the sale, Capri has more time to focus on its repositioning efforts at Michael Kors and Jimmy Choo. EBITDA Below Historical Levels: Fitch expects Capri's EBITDA to expand from an estimated $250 million in fiscal 2026 to approximately $320 million by fiscal 2028, meaningfully below the $960 million to $1.1 billion range seen in fiscal 2022 and 2023. This assumes stabilization of topline trends beginning in fiscal 2027 and EBITDA margin expansion from an expected 7.3% in fiscal 2026 towards the low-9% range by fiscal 2028. Capri must balance investments with cost efficiencies to achieve this expansion. Moderate Leverage; Weak Coverage: Fitch expects EBITDAR leverage to decline to the high-2x range in fiscal 2026, relative to 3.3x in fiscal 2025. Capri's deleveraging is aided by recent debt repayment, which more than offset the impact of EBITDA declines in fiscal 2026. Capri's EBITDAR leverage is low for a 'BB' rating and is balanced by the company's weak EBITDAR fixed charge coverage and smaller scale. EBITDAR fixed charge coverage is expected to be in the mid-1x range in fiscal 2026 and could return towards 2.0x over the next 24 months as EBITDA expands to above $300 million. Minimal FCF: Due to EBITDA declines, Fitch expects FCF to turn modestly negative in fiscal 2026, from positive $150 million in fiscal 2025. In fiscal 2027, FCF could turn modestly positive driven by EBITDA rebound. This is compared to an average of approximately $350 million over the last four years. Historically, Capri has used cash generation for debt repayment, share repurchases and business investment. Capri plans to invest approximately $300 million in Michael Kors store renovations over the next few years. In November 2025, Capri announced a new $1.0 billion share repurchase program, with the plan to resume share repurchases beginning in fiscal 2027. Peer Analysis Peers include Beach Acquisition Co Parent, LLC (B+/Stable), Signet Jewelers Ltd. (BBB-/Stable), Samsonite Group S.A. (BB+/Stable), Levi Strauss & Co. (BBB-/Stable) and Gildan Activewear Inc. (BBB/Stable). Signet's ratings are two notches higher than Capri's reflecting the company's relatively lower EBITDAR leverage. The ratings consider Signet's good execution from a topline and margin standpoint, which supports Fitch's longer-term expectations of low-single-digit revenue and EBITDA growth. The rating reflects Signet's leading market position as a U.S. specialty jeweler with an approximately 9% share of a highly fragmented industry. Levi's ratings are two notches higher than Capri's, reflecting the company's larger scale and lower EBTIDAR leverage. The ratings reflect its position as one of the world's largest branded apparel manufacturers, with broad channel and geographic exposure, and good execution in terms of both the top line and margins. This supports Fitch's medium-term expectations of low-single-digit revenue and EBITDA growth. Samsonite's rating considers the company's status as the world's largest travel luggage company, with strong brands and historically good organic growth. The rating is one notch higher than Capri's, reflecting in-part its larger scale, with EBITDAR trending around $800 million. Gildan's ratings are three notches higher than Capri's, reflecting Capri's higher leverage and higher degree of fashion risk. Gildan's rating reflects its leading position in the basic apparel manufacturing industry Beach Acquisition's ratings are two notches lower than Capri, reflecting the company's relatively higher leverage, which is elevated around 5.5x post the recent 3-G transaction buyout. Fitch’s Key Rating-Case Assumptions - Fitch expects organic revenue to decline in the mid-single-digits in fiscal 2026, driven by mid-single-digit declines at the Michael Kors and Jimmy Choo brands, as the company works through its ongoing portfolio repositioning efforts compounded by ongoing softness in consumer spending for discretionary goods. - Fitch's base case assumes that fiscal 2026 revenue declines to $3.4 billion, accounting for the sale of Versace, which generated approximately $820 million in revenue in fiscal 2025; - Revenue to decline in the low-single digits during the first half of fiscal 2027 before turning flat-to-slightly positive during the second half of the fiscal year, driven by flat topline performance at Michael Kors and low-to-mid-single-digit growth at Jimmy Choo; - EBITDA could decline towards $250 million in fiscal 2026 from approximately $350 million in fiscal 2025, driven by topline deleveraging, and gross margin contraction related to heightened cost pressure related to tariffs. Thereafter, EBITDA could expand modestly annually, driven by positive topline growth and gross margin improvement. - Fitch expects FCF could turn modestly negative in fiscal 2026, driven by topline declines and margin contraction. Beginning in fiscal 2027, FCF could turn slightly positive, assuming some EBITDA rebound, neutral working capital, and annual capital expenditure (capex) averaging around $150 million. - In December 2025, Capri sold Versace to Prada S.P.A. for $1.395 billion. The company used the proceeds to repay debt including $700 million in term loan borrowings as well as approximately $700 million in revolver borrowings. - EBITDAR leverage is expected to decline to the high-2x range in fiscal 2026 from 3.3x in fiscal 2025 as EBITDA declines are more than offset by debt repayment. Fitch expects EBITDAR leverage could trend towards the mid-2x range thereafter, driven by flattish debt levels and modest EBITDA expansion. - The revolving credit facility (SOFR+2.00) is a floating rate instruments. Fitch's annual SOFR assumptions range from 3.0% to 4.0% across the forecast period. - Achieving the above assumptions, including stabilizing revenue and EBITDA, could result in a revision of Capri's Rating Outlook to Stable. 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 (bb+, Moderate), Sector Characteristics (bb, Moderate), Market and Competitive Positioning (bb, Higher), Diversification and Asset Quality (bb+, Moderate), Company Operational Characteristics (bb+, Moderate), Profitability (bb-, Moderate), Financial Structure (bbb-, Lower), and Financial Flexibility (b+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025 (ending March 2026), 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'aa-' results in no adjustment. - The SCP is 'bb'. To derive the IDR: - No adjustments were made to the SCP, resulting in an IDR of 'BB'. Recovery Analysis Fitch does not employ a waterfall recovery analysis for issuers that are assigned ratings in the 'BB' category. Due to the distance to default, Recovery Ratings in the 'BB' category are not computed by bespoke analysis. Instead, they serve as a label to reflect an estimate of the risk of these instruments relative to other instruments in the entity's capital structure. Fitch affirmed Capri Holdings Limited's, Michael Kors (Switzerland) GmbH's and Michael Kors (USA), Inc.'s (co-borrowers) secured revolving credit facility at 'BBB-' with a Recovery Rating of 'RR1'. The credit facility is secured by certain U.S. assets and intellectual property. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A slower than expected top-line and EBITDA recovery; - EBITDAR leverage sustained above 3.0x; - EBITDAR fixed charge coverage sustained below 1.5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch could revise the Outlook to Stable on increased visibility in the company's ability to stabilize operations, as evidenced through revenue and EBITDA expansion beginning in fiscal 2027. This would yield EBITDAR leverage sustained below 3.0x and EBITDAR fixed charge coverage trending towards 2.0x. - Low-to-mid single-digit revenue growth, along with EBITDA growing towards the mid-$400 million range based on EBITDA margin improvement to the low-teens range; - EBITDAR leverage sustained below 2.5x; - EBITDAR fixed charge coverage at or above 2.0x. Liquidity and Debt Structure Capri's liquidity is strong. As of Dec. 27, 2025, it had $154 million in cash and $1.3 billion in availability on its revolving credit facility. The company's debt structure as of Dec. 27, 2025 consisted of the $1.5 billion secured revolving credit facility, due July 2027. As of this date, there were $221 million in outstanding borrowings on the facility. In December 2025, Capri repaid $700 million in term loan borrowings, along with approximately $700 million in revolver borrowings using the proceeds from the Versace sale. The revolving facility is co-borrowed by Capri Holdings, Michael Kors (USA), Inc. and Michael Kors (Switzerland) GmbH. Issuer Profile Capri Holdings Limited is a leading global manufacturer and retailer of accessories and leather goods, primarily handbags and footwear. Capri's portfolio consists of two brands: Michael Kors and Jimmy Choo. Summary of Financial Adjustments Historical and projected EBITDA is adjusted to add back non-cash stock-based compensation and exclude non-recurring charges. Fitch uses the balance sheet reported lease liability as the capitalized lease value when computing lease-equivalent debt. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Capri Holdings Limited. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Michael Kors (USA), Inc. LT IDR BB Affirmed BB senior secured LT BBB- Affirmed RR1 BBB- Michael Kors (Switzerland) GmbH LT IDR BB Affirmed BB senior secured LT BBB- Affirmed RR1 BBB- Capri Holdings Limited LT IDR BB Affirmed BB senior secured LT BBB- Affirmed RR1 BBB- MONTGOMERY SQUARE 1: S&P Assigns B- (sf) Rating to Class X Notes ---------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Montgomery Square Consumer Funding 1 PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, F-Dfrd, G-Dfrd, and X-Dfrd notes. At closing, the issuer also issued unrated S and Y certificates. Montgomery Square Consumer Funding 1 is the first public securitization of a portfolio of unsecured consumer loans originated and serviced by Fintern Ltd. (trading as Abound) in the U.K. Fintern was incorporated as a private limited liability company in England and Wales on Feb. 19, 2020. S&P views Abound's origination, underwriting, servicing, and risk management policies and procedures to be in line with market standards and adequate to support the ratings assigned. The class A to G-Dfrd notes redeem pro rata, subject to sequential amortization triggers. The class A and B-Dfrd notes benefit from a dedicated partially funded reserve fund. The reserve fund is available to provide liquidity support and pay interest on specified notes (B-Dfrd when senior) and expenses. Abound will remain the initial servicer of the loans. The standby servicer, Equiniti Gateway Ltd. (trading as Lenvi), has plans to be operational within 30 days of a servicer termination event. Citibank Europe PLC acts as the interest rate swap provider. Ratings Class Rating Class size (mil. GBP) A AAA (sf) 152.611 B-Dfrd AA (sf) 10.015 C-Dfrd A (sf) 8.584 D-Dfrd BBB+ (sf) 7.154 E-Dfrd BB (sf) 6.676 F-Dfrd B (sf) 2.862 G-Dfrd B- (sf) 2.861 X-Dfrd§ B- (sf) 8.107 S Certs NR N/A Y Certs NR N/A VRR Loan Note** NR 10.467 *S&P said, "Our rating on the class A notes addresses timely payment of interest and ultimate repayment of principal. Our ratings on the class B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, F-Dfrd, G-Dfrd, and X-Dfrd notes address the ultimate repayment of both interest and principal, and consider the timely payment of interest, excluding any previously deferred amounts, once the class is the most senior." §The class X-Dfrd notes are not asset-backed. Their proceeds will fund the reserve accounts and pay any issuance expenses. **The VRR loan note is issued for risk retention. Dfrd--Deferrable. NR--Not rated. N/A--Not applicable. PALMER BARNES: Armstrong Watson Appointed as Joint Administrators ----------------------------------------------------------------- Palmer Barnes Limited was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Company and Insolvency List, No 0227 of 2026, and Ed Connell (IP No. 30214) and Mike Kienlen (IP No. 9367) of Armstrong Watson LLP were appointed as Joint Administrators on March 2, 2026. Palmer Barnes offers floor and wall covering. The company's registered office is at Carlton House, Grammar School Street, Bradford, West Yorkshire, BD1 4NS, United Kingdom. The company's principal trading address is at Pack House, Thorpe Lane Farm, Thorpe, Wakefield, WF3 3BZ. The Joint Administrators can be reached at: Ed Connell (IP No. 30214) Mike Kienlen (IP No. 9367) Armstrong Watson LLP Third Floor, 10 South Parade Leeds, West Yorkshire, LS1 5QS For further details, contact: Elena Fergusson Tel: 0113 221 1300 Email: elena.fergusson@armstrongwatson.co.uk =============== X X X X X X X X =============== [] BOOK REVIEW: Bendix-Martin Marietta Takeover War --------------------------------------------------- MERGER: The Exclusive Inside Story of the Bendix-Martin Marietta Takeover War Author: Peter F. Hartz Publisher: Beard Books Soft cover: 418 pages List Price: $34.95 Review by Gail Owens Hoelscher http://www.beardbooks.com/beardbooks/merger.html William Agee, the youngest man ever to head one of the top 100 American corporations, seemed unstoppable. In 1977, at the age of 39, he took over Bendix Corporation, an aerospace, automotive, and industrial firm, determined to diversify the company out of the automotive industry. In his words, "Automobile brakes are in the winter of their life and so is the entire automobile industry." He sold off a few Bendix units, got some cash together, and began to look for acquisitions. Then Agee's relationship with Mary Cunningham burst into the news. Agee had promoted Cunningham from his executive assistant to vice president, to the outrage of other Bendix employees. Their affair, replete with power, brains, youth, good looks, charm, denial, and deceit, fascinated the American public. Cunningham was forced to leave Bendix to work for Seagrams, with the entire country wondering just how well she would do. The two divorced their respective spouses and married soon thereafter. To the chagrin of many, Cunningham continued to play a pivotal role in Bendix affairs. Eager to regain his standing, Agee turned to acquisition as soon as the gossip died down. A failed attempt to acquire RCA left him more determined than ever. He then set his sights on Martin-Marietta, an undervalued gem in the 1982 stock market slump. Thus began an all-out war of tenders and countertenders, egoism and conceit, half-truths and dissimulation, and sudden alliances and last-minute court decisions. This is a very exciting account of the war's scuffles, skirmishes, and battles. The author, son of a long-time Bendix director, was able to interview some of the major participants who most likely would have refused the requests of other authors. Some gave him access to personal notes from the various proceedings. The author thoroughly researched the documents involved in the takeover war, as well as news reports and press releases. He explains the complicated legal maneuverings very clearly, all the while keeping the reader entertained with the personal lives and thoughts of the players. People love this book. The New York Times Book Review said "Aggression and treachery, hairbreadth escapes and last-minute reversals, "white knights" and "shark repellants" -- all of these and more can be found in the true-life adventure of the Bendix-Martin Marietta merger war." The Wall Street Journal said "Merger brims with tension, authentic-sounding dialogue and insider detail." Peter F. Hartz was born in Toronto, Canada, in 1953, and moved to the U.S. as a child. He holds degrees from Colgate University and Brown University. He lives in Toluca Lake, California. ********* 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 * * *