260417.mbx

260417.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, April 17, 2026, Vol. 27, No. 77 Headlines F R A N C E BABILOU FAMILY: S&P Upgrades ICR to 'B-' on Restored Liquidity I R E L A N D ARES EUROPEAN XXIV: S&P Assigns B- (sf) Rating to Class F Notes CAPITAL FOUR II: S&P Assigns B- (sf) Rating to Class F-R Notes L U X E M B O U R G MINERVA LUXEMBOURG: S&P Rates New Senior Unsecured Notes 'BB' S W I T Z E R L A N D ADECCO INTERNATIONAL: S&P Rates Proposed EUR450MM Hybrid Notes BB+ U N I T E D K I N G D O M 64 GLOUCESTER PLACE: FTI Consulting Appointed as Administrators ATLAS FUNDING 2026-1: Fitch Assigns 'BB(EXP)sf' Rating to X2 Notes BRIDGEGATE FUNDING: S&P Assigns CCC(sf) Rating to Cl. X-Dfrd Notes HARVEST FUNDING: S&P Assigns Prelim CCC(sf) Rating to X-Dfrd Notes X X X X X X X X [] BOOK REVIEW: The Turnaround Manager's Handbook - - - - - =========== F R A N C E =========== BABILOU FAMILY: S&P Upgrades ICR to 'B-' on Restored Liquidity -------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating (ICR) on Babilou Family SAS to 'B-' from 'CCC+'. In line with the ICR, S&P raised its 'B-' issue rating, with a '3' recovery rating on Babilou's term loan B (TLB) indicating recovery prospects of 50%-70% (rounded estimate 60%) in the event of default. The stable outlook reflects S&P's expectation that Babilou's operating performance will continue to recover in 2026 as the group performs on a higher occupancy basis with an improved cost structure relieving pressure on its credit metrics and maintaining adequate liquidity. Babilou Family SAS' additional signed contracts and enrollment were solid in September 2025, which, combined with initiatives to limit staffing issues, resulted in operational improvements in fourth-quarter 2025. This laid the foundation for stronger performance from 2026. S&P expects S&P Global Ratings-adjusted EBITDA to reach EUR200 million-EUR210 million in 2026, enabling sound deleveraging with adjusted leverage forecast at about 5.8x (8.0x in gross financial terms) from the estimated 6.7x in 2025 (11.3x in gross financial terms). Babilou should also be able to reduce its free operating cash flow (FOCF) after leases deficit from negative EUR47 million in 2025, due to elevated nonrecurring and working capital one off movements, to neutral levels in 2026 and 2027. This will enable the group to maintain its adequate liquidity position after the EUR52.5 million sponsor equity injection in late 2025 and lessen liquidity pressures. Babilou laid the groundwork for operating performance recovery in fourth-quarter 2025 with S&P Global Ratings-adjusted EBITDA forecast above EUR200 million in 2026. Thanks to the additional contracts signed and enhanced enrollment in September 2025, the group's revenue recovered and increased by approximately 2.2% to EUR940 million in 2025, from EUR914 million in 2024, primarily through contracts in the business-to-business segment, using the business-to-consumer segment to increase the occupancy rate, and a strategic realignment of pricing in France. Babilou reported a recovery in profitability with an EBITDA margin of about 18.8% from 18.0% year on year, driven by cost control initiatives to reduce staff turnover, recourse to interim staff, and reducing headquarter costs. S&P said, "We expect these positive trends to continue into 2026, with the group benefitting from its expansion plans including 15 greenfield openings in France, 13 in the Netherlands, and two in the U.S., alongside the acquisition of the remaining shares of Babilou Family Singapore. Consequently, we forecast revenue growth of 4%-6% in 2026, reaching EUR980 million-EUR995 million. We expect S&P Global Ratings-adjusted EBITDA of EUR200 million-EUR210 million with a 20.0%-21.0% margin, supported by reducing restructuring and on-off costs of about EUR12 million from EUR19 million in 2025. We forecast the full year impact of the expansion strategy and additional government initiatives--notably the "Vautrin" diploma, which should help staff recruitment and retention to support operating performance further improving in 2027. As a result, revenue in 2027 should increase by 4%-5% to EUR1,02 billion-EUR1.03 billion and adjusted EBITDA should strengthen to EUR210 million-EUR220 million (20.5%-21.5% margin). "We forecast that Babilou's S&P Global Ratings-adjusted leverage to decrease below 6.0x in 2026, while FOCF after leases improves toward neutral levels. We estimate S&P Global Ratings-adjusted leverage remained elevated in 2025 at 6.7x (11.3x in gross financial terms) but will decrease to about 5.8x (8.0x in gross financial terms) in 2026, and to about 5.5x in 2027 (7.5x in gross financial terms), aligned with the anticipated EBITDA improvement. We also expect FOCF after leases to improve from an estimated negative EUR47 million in 2025 to neutral levels in 2026 and 2027. Normalizing working capital trends as in 2025 will support FOCF recovery. In 2025, Babilou recorded an approximately EUR35 million working capital outflow, reflecting the normalization of French supplier payables following the temporary working capital benefit in 2024, resulting in a balanced supplier position by year-end 2025. We anticipate that working capital outflow will normalize to about EUR5 million-EUR10 million in 2026-2027. We expect the group will monitor its capital expenditure (capex) tightly in 2026, forecast at EUR35 million-EUR40 million in line with 2025, despite the restart of expansion plans." Babilou's liquidity position has strengthened thanks to the recent sponsor equity injection and operating performance recovery. In 2025, the group benefited from an equity injection of EUR52 million from its shareholders that restored the group's liquidity, which was under pressure because of weaker operating performance in 2024. Available liquidity, as of Jan. 1, 2026, included EUR59.3 million cash on balance sheet; the undrawn portion of the EUR112 million revolving credit facility (RCF), which is about EUR17.3 million; and some uncommitted bank lines, which we do not include in our liquidity analysis. S&P said, "We forecast Babilou's operating performance to recover with FOCF after leases close to neutral levels in 2026. Therefore, we expect the group to maintain adequate liquidity. We also note the TLB and RCF, which mature in November 2030, present no near-term debt maturity risks." S&P said, "The stable outlook reflects our expectation that Babilou's operating performance will continue to recover in 2026 as the group performs on a higher occupancy basis with an improved cost structure relieving pressure on its credit metrics. We expect Babilou to report neutral FOCF after lease levels in 2026 and 2027, and adjusted leverage of about 5.8x (8.0x in gross financial terms) in 2026 and about 5.5x (7.5x in gross financial terms) in 2027, while maintaining adequate liquidity." S&P could lower its rating on Babilou if, in the next 12 months: -- Babilou's operating performance does not improve in line with our forecast, such that leverage remains high and FOCF remains negative for a prolonged period, resulting in a capital structure that S&P views as unsustainable; -- The group's liquidity position deteriorates; or -- The group pursues a more aggressive financial policy including, for example, debt-funded acquisitions, resulting in persistently very high and unsustainable leverage. S&P could consider an upgrade if Babilou's profitability improves, supporting sustained positive FOCF after leases generation. Any upgrade would also depend on a financial policy commitment to leverage being sustainably below 5.5x, bolstered by a track record of deleveraging. ============= I R E L A N D ============= ARES EUROPEAN XXIV: S&P Assigns B- (sf) Rating to Class F Notes --------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Ares European CLO XXIV DAC's class A Loan and class A, B, C, D, E, and F notes. At closing, the issuer also issued EUR32.1 million unrated subordinated notes. The reinvestment period will be approximately 4.5 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes and loan will pay quarterly interest unless there is a frequency switch event. Following this, the notes and loan will switch to semiannual payment. The ratings assigned to Ares European CLO XXIV DAC's notes and loan reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes and loan through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,603.35 Default rate dispersion 547.62 Weighted-average life (years) 4.77 Obligor diversity measure 156.67 Industry diversity measure 26.30 Regional diversity measure 1.22 Country concentration in sovereigns rated below 'AA-' (%) 25.43 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 172 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Target 'AAA' weighted-average recovery (%) 36.35 Actual weighted-average spread net of floors (%) 3.41 Actual weighted-average coupon (%) 4.03 Rationale S&P's ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, S&P conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR400 million target par amount, the target weighted-average spread of 3.41%, the target weighted-average coupon of 4.03%, and the identified weighted-average recovery rate. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "Until the end of the reinvestment period on Oct. 15, 2030, the collateral manager may substitute assets in the portfolio for so long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes and loan. This test looks at the total amount of losses that the transaction can sustain as established by the initial cash flows for each rating, and it compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, as long as the initial ratings are maintained. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes." The class A Loan and class A notes can withstand stresses commensurate with the assigned ratings. The class F notes' current break-even default rate cushion is negative at the assigned rating. Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including its long-term corporate default rates and recent economic outlook, S&P believes this class is able to sustain a steady-state scenario, in accordance with its criteria. S&P's analysis further reflects several factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- S&P's model-generated portfolio default risk, which is at the 'B-' rating level at 23.10% (for a portfolio with a weighted-average life of 4.77 years) versus 15.26% if it was to consider a long-term sustainable default rate of 3.2% for 4.77 years. -- Whether the tranche is vulnerable to nonpayment in the near future. -- If there is a one-in-two chance for this note to default. -- If S&P envisions this tranche to default in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for all rated classes of notes and loan. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A Loan and class A to E notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P regards the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with its benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities. Ares European CLO XXIV 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. Ares Management Ltd. manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate A AAA (sf) 123.00 38.00 Three/six-month EURIBOR plus 1.27% A Loan AAA (sf) 125.00 38.00 Three/six-month EURIBOR plus 1.27% B AA (sf) 44.50 26.88 Three/six-month EURIBOR plus 1.85% C A (sf) 24.25 20.81 Three/six-month EURIBOR plus 2.35% D BBB- (sf) 29.25 13.50 Three/six-month EURIBOR plus 3.25% E BB- (sf) 17.00 9.25 Three/six-month EURIBOR plus 6.25% F B- (sf) 11.00 6.50 Three/six-month EURIBOR plus 8.75% Sub notes NR 32.10 N/A N/A *The ratings assigned to the class A Loan and class A and B notes address timely interest and ultimate principal payments. S&P's ratings address ultimate interest and principal payments on the other rated notes. 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. CAPITAL FOUR II: S&P Assigns B- (sf) Rating to Class F-R Notes -------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Capital Four CLO II DAC's A-1 and A-2 loans and class X-R, A-R, B-1-R, B-2-R, C-R, D-R, E-R, and F-R reset notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.5 years after closing, while the noncall period will end 1.5 years after closing. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows and excess spread. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,845.25 Default rate dispersion 511.20 Weighted-average life (years) 4.06 Weighted-average life extended to cover the length of the reinvestment period (years) 4.50 Obligor diversity measure 126.93 Industry diversity measure 19.02 Regional diversity measure 1.14 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 3.22 Target 'AAA' weighted-average recovery (%) 36.00 Target weighted-average coupon (%) 3.41 Target weighted-average spread (net of floors; %) 3.53 Rating rationale The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR325 million target par amount, the targeted weighted-average spread (3.53%), and the targeted weighted-average coupon (3.41%) as indicated by the collateral manager. We assumed the targeted weighted-average recovery rates for all rated notes. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios, for each liability rating category. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-1-R to C-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment period from closing until Oct. 15, 2030, during which the transaction's credit risk profile could deteriorate, we capped our ratings on these notes. "For the class F-R notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes." The ratings uplift for this class of notes reflects several key factors, including: -- Their available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that have recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated break-even default rate at the 'B-' rating level of 24.44% (for a portfolio with a weighted-average life of 4.5 years), versus if it was to consider a long-term sustainable default rate of 3.2% for 4.5 years, which would result in a target default rate of 14.40%. -- S&P does not believe that there is a one-in-two chance of this tranche defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for this tranche is commensurate with the assigned 'B- (sf)' rating. "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 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-1 and A-2 loans and the class X-R to F-R 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 X-R to E-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Capital Four CLO II 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. Capital Four CLO Management K/S manages the transaction and Capital Four Management Fondsmæglerselskab A/S is the co-collateral manager. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ X-R AAA (sf) 3.00 N/A Three/six-month EURIBOR plus 0.93% A-R AAA (sf) 90.00 38.46 Three/six-month EURIBOR plus 1.30% A-1 loan AAA (sf) 85.00 38.46 Three/six-month EURIBOR plus 1.30% A-2 loan AAA (sf) 25.00 38.46 Three/six-month EURIBOR plus 1.30% B-1-R AA (sf) 21.70 28.71 Three/six-month EURIBOR plus 2.00% B-2-R AA (sf) 10.00 28.71 5.086% C-R A (sf) 22.00 21.94 Three/six-month EURIBOR plus 2.40% D-R BBB- (sf) 24.375 14.44 Three/six-month EURIBOR plus 3.50% E-R BB- (sf) 12.10 10.72 Three/six-month EURIBOR plus 6.85% F-R B- (sf) 12.30 6.93 Three/six-month EURIBOR plus 8.88% Sub. notes NR 32.40 N/A N/A *S&P's ratings on the A-1- and A-2-loans and class X-R, A-R, B-1-R, and B-2-R notes address timely interest and ultimate principal payments. Its ratings on the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. Sub. notes--Subordinated notes. NR--Not rated. N/A--Not applicable. =================== L U X E M B O U R G =================== MINERVA LUXEMBOURG: S&P Rates New Senior Unsecured Notes 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating to Minerva Luxembourg S.A.'s proposed senior unsecured notes. S&P also assigned the recovery rating of '4' to the proposed notes, which indicates an average recovery expectation (30%-50%; rounded estimated: 40%) for creditors in a hypothetical default. The notes will be fully and unconditionally guaranteed by the parent company Minerva S.A. (BB/Stable/--) and Athena Foods S.A. (not rated), Minerva's largest subsidiary. Athena has no material debt, so all the cash it generates can be used to meet debt payments at the parent company level. Therefore, the rating on the senior unsecured notes reflects the parent's credit quality. The company intends to use the proceeds for liability management purposes; therefore, S&P expects the transaction to be leverage neutral, but improve the company's capital structure by extending Minerva's average debt maturity. Minerva reported strong financial performance in 2025, with a net revenue of R$54.8 billion and EBITDA of R$4.8 billion, compared with R$34 billion and R$3.1 billion in 2024. These results are driven by the full integration of the new assets last year, along with the equity capitalization that enabled faster debt reduction. The company has had a smooth transition and effective integration of the assets, while significantly improving its leverage ratio to 2.8x by year-end 2025 from 5.2x in the prior year--excluding any pro forma adjustments for the acquired EBITDA. S&P said, "We expect leverage to further improve from 2026 onwards, driven by continued solid revenue and EBITDA generation, although margin should suffer with inflationary costs, coupled with debt reduction. We also expect cash flow generation to strengthen as it reduces interest burden, further improving leverage and credit metrics." Issue Ratings--Recovery Analysis Key analytical factors The recovery rating for Minerva's senior unsecured debt is '4', indicating an average recovery (30%-50%; rounded estimate: 40%) in a hypothetical default scenario. This scenario anticipates a payment default in 2031 and contemplates a combination of rising cattle prices, feeble global beef demand, which would impact Brazil and other countries in South America where Minerva operates, amid tightening access to credit markets. Although the subsidiary, Athena, currently has limited debt, any increase, however unlikely, could negatively affect Minerva's recovery prospects. Athena doesn't guarantee the bonds at the parent company's level, and it would benefit from priority cash flows to pay down its debt. S&P said, "We analyze the default scenario on a going-concern basis, and we apply a 5.0x multiple to our projected emergence-level EBITDA, in line with the standard multiple for the agribusiness sector." The projected emergence-level EBITDA is about R$3.0 billion, resulting in an estimated gross emergence value of about R$15.1 billion, net of administrative expenses, which is distributed among each debt instrument according to the structure of guarantees and subordination. Simulated default assumptions -- Simulated year of default: 2031 -- EBITDA at emergence: R$3.0 billion -- Implied enterprise value multiple: 5.0x -- Estimated gross enterprise value at emergence: R$15.1 billion Simplified waterfall -- Net enterprise value after 5% administrative costs: R$14.3 billion -- Priority and secured debt: R$ 579 million (export financing lines and secured loan agreement) -- Senior unsecured debt: R$ 27.9 billion -- Recovery expectations: 30%-50% for its unsecured debt (rounded estimate: 40%) ===================== S W I T Z E R L A N D ===================== ADECCO INTERNATIONAL: S&P Rates Proposed EUR450MM Hybrid Notes BB+ ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' long-term issue rating to the proposed 30-year ordinary subordinated, resettable, fixed-rate notes to be issued by Adecco International Financial Services B.V. (BBB/Stable/A-2). S&P understands Adecco, a Switzerland-based personnel services provider, intends to use proceeds to proactively refinance 90% of its EUR500 million hybrid debt due 2082, ahead of its first call date in December 2026. Adecco Group AG (BBB/Stable/A-2) will issue a EUR450 million subordinated, guaranteed hybrid instrument through its subsidiary Adecco International Financial Services B.V.to refinance its existing EUR500 million hybrid bond issued in 2021, ahead of its first call date in December 2026. S&P said, "We assess the proposed instrument as having intermediate equity content. We have revised the equity content of the outstanding EUR500 million bond to minimal and expect it to be repaid soon after its first call date." The 10% reduction in Adecco's hybrid stock is immaterial based on our criteria. S&P said, "We assigned our 'BB+' issue rating to the proposed hybrid security, reflecting its subordination and optional deferability. "We assess the proposed security as having intermediate equity content until June 2031, its first reset date, which we expect will be no earlier than 5.25 years. This is because it meets our criteria in terms of subordination and deferability at the company's discretion during this period. We also consider that the hybrid instrument, or its replacement, will remain outstanding for a long enough period to be considered as having intermediate equity content. "We anticipate the instrument will have a first step-up of 25 basis points (bps) in 2036, five years after the first reset date (10.25 years from the issue date), and a second step-up of 75 bps, 20 years after its first reset in 2051. We consider the aggregate 100 bps step-up material because we believe it incentivizes Adecco to redeem the instrument on the call date, and therefore view 2051 as the instrument's effective maturity date. "To reflect our view of the intermediate equity content of the proposed security, we allocate 50% of the related payments on the security as a fixed charge and 50% as equivalent to a common dividend. The 50% treatment of principal and accrued interest also applies to our adjustment of Adecco's debt. "We interpret Adecco's financial policy as being committed to maintaining a permanent layer of hybrid capital within its capital structure. The hybrid will comprise about 13% of the group's adjusted capitalization (excluding the instrument being replaced) as of 2025, well below the 15% threshold. "We arrive at our 'BB+' issue rating on the proposed security by notching down from our 'BBB' issuer credit rating on Adecco." The two-notch differential reflects S&P's notching methodology, which calls for deducting: -- One notch for the proposed notes' subordination, because the issuer credit rating on Adecco is investment-grade; and -- An additional notch for the optional deferability of interest. The notching to rate the proposed security indicates S&P's view of a relatively low likelihood that the issuer will defer interest. Should our view change, it may deduct more notches to derive at the issue rating. Despite its 30-year legal maturity, the hybrid can be called five years after issuance (or three months before the first reset date) and at each interest payment date thereafter. Adecco has stated its intention to replace the proposed instrument with securities of similar or higher equity content, though it is not obligated to do so. The hybrid can also be called at any time due to certain tax, change of control, rating events, which S&P views as remote external events. Adecco can also call the instrument before the first call date by paying a make-whole premium. However, based on the premium to par for a make-whole redemption, S&P does not view this as a call feature in our hybrid analysis. Key factors in S&P's assessment of the security's deferability: -- Adecco can defer interest payments at its discretion without triggering an event of default. This means the company may elect not to pay accrued interest on an interest payment date because it has no obligation to do so. Nevertheless, Adecco will have to settle accrued interests if it declares or pays dividends on its common shares, or if it pays dividends on equally or junior ranking securities. Adecco is also obligated to repay interest outstanding if it repurchases shares, or equally or junior ranking securities. The documentation stipulates that in case of deferral, all interest in arrears must be settled five years after the initial decision to defer. This meets the minimum requirements for intermediate equity content under S&P's hybrid criteria. Key factors in S&P's assessment of the security's subordination: The proposed security and coupons are subordinated. They will only rank ahead of Adecco's outstanding share capital and existing hybrid debt (while outstanding) and will rank behind all other claims. =========================== U N I T E D K I N G D O M =========================== 64 GLOUCESTER PLACE: FTI Consulting Appointed as Administrators --------------------------------------------------------------- 64 Gloucester Place Limited was placed into administration in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD), No CR-2026-001743, and Joanne Hewitt-Schembri (IP No. 19732), Ali Abbas Khaki (IP No. 25690), and Matthew Boyd Callaghan (IP No. 14630) of FTI Consulting were appointed as Joint Administrators on March 10, 2026. The company engages in the buying and selling of own real estate. The company's registered office is at c/o FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. The Joint Administrators can be reached at: Joanne Hewitt-Schembri (IP No. 19732) Ali Abbas Khaki (IP No. 25690) Matthew Boyd Callaghan (IP No. 14630) FTI Consulting 200 Aldersgate, Aldersgate Street London, Greater London, United Kingdom For further details, contact: FTI Consulting Tel. No: +44 (0)7974 518450 Email: project_mist@fticonsulting.com ATLAS FUNDING 2026-1: Fitch Assigns 'BB(EXP)sf' Rating to X2 Notes ------------------------------------------------------------------ Fitch Ratings, on April 13, 2026, filed a correction to a ratings release published earlier in the day to disclose an update. The corrected release states that Fitch has assigned Atlas Funding 2026-1 PLC expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ Atlas Funding 2026-1 PLC A LT AAA(EXP)sf Expected Rating B LT AAA(EXP)sf Expected Rating C LT A+(EXP)sf Expected Rating D LT BBB(EXP)sf Expected Rating E LT BB(EXP)sf Expected Rating X1 LT BB+(EXP)sf Expected Rating X2 LT BB(EXP)sf Expected Rating Transaction Summary Atlas 2026-1 will be a securitisation of buy to-let (BTL) mortgages originated in England and Wales by Lendco Limited. This will be the seventh securitisation in the Atlas shelf. The transaction will permit product switches, up to 25% of the closing pool balance, till the optional redemption date (ORD). Lendco Limited will also act as servicer. KEY RATING DRIVERS Prime BTL: The pool has a weighted average (WA) seasoning of 30 months as over half the pool was originated in 2021-2022. The WA original loan-to-value is 72% and the Fitch calculated WA interest coverage ratio 100.7%, which is in line with BTL RMBS transactions rated by Fitch. Lendco's target market consists of professional landlords and limited companies with large portfolios. Borrower concentration is lower than the predecessor Atlas transactions and more comparable to peer non-bank BTL lenders. For this reason, Fitch has reduced its transaction adjustment for the foreclosure frequency (FF) to 1.0x, versus 1.1x for the predecessor Atlas transactions. Product Switches: The transaction will allow for the retention of product switches up to 25% (up from 12.5% for Atlas 2025-2) of the closing collateral balance. This will be subject to the product switch conditions and asset tests outlined in the transaction documentation, including a requirement for the WA post-swap margin on the total assets (fixed and floating) to be no less than 1.95% over three-month SONIA. Higher Prepayments Expected: Thirty-seven per cent of the loans are due to reset from their fixed rates in the next 12 months. Fitch expects higher prepayments in the short term than in other recent BTL transactions. Its assumptions follow the reset profile and assume 40% constant payment rate? for periods where there is a concentration of loan interest-rate resets. Pro-Rata for Initial Nine Months: The collateralised notes (class A to E) will pay down on a pro-rata basis for nine months after closing and thereafter switch to a sequential paydown. The pro-rata period will be subject to a number of conditions, most notably that the outstanding pool balance is no less than 50% the closing principal balance of the notes. Any breach of conditions will lead to an irreversible switch to sequential paydown of the collateralised notes. Fixed Interest Rate-Hedging Schedule: The pool consists of 97.3% of the current balance of fixed-rate loans that are hedged through a series of interest-rate swaps. A swap notional amount and margin will be re-calculated at each interest payment date (IPD), according to a pre-defined set of parameters, to account for the fixed-rate roll-off of the loans and inclusion of product switches. This could lead to over-hedging due to defaults or prepayments, reducing the performing asset balance by more than the reduction in the swap notional amount over time. Over-hedging results in higher available revenue funds in rising interest rate scenarios but lower ones in falling interest rate scenarios. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Transaction performance may be affected by changes in market conditions and economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce the credit enhancement available to the notes. In addition, unanticipated declines in recoveries could result in lower net proceeds, which may make certain note ratings susceptible to negative rating actions, depending on the extent of the decline in recoveries. Fitch found that a 15% WAFF increase and a 15% WA recovery rate decrease would result in downgrades of up to two notches each for the class B, D E and X2 notes and one notch each for the class A and C notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable-to-improved asset performance driven by stable delinquencies and defaults would lead to increasing credit enhancement and, potentially, upgrades. Fitch found that a decrease in the WAFF of 15% and an increase in the WA recovery rate of 15%, would lead to upgrades of one notch each for the class E and X2 notes, two notches each for the class B and D notes, and up to three notches for the class C notes. The class A notes are already rated at the maximum 'AAAsf'. 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 reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. Date of Relevant Committee 10 April 2026 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. BRIDGEGATE FUNDING: S&P Assigns CCC(sf) Rating to Cl. X-Dfrd Notes ------------------------------------------------------------------ S&P Global Ratings has assigned its credit ratings to Bridgegate Funding PLC's class A notes and class B-Dfrd to X-Dfrd interest deferrable notes. This transaction is a refinancing of the Bridgegate Funding PLC transaction, which originally closed in January 2023. At closing of the refinancing transaction, there was no sale of mortgages as this happened when the original transaction closed. On the closing date for the refinancing transaction, the issuer issued new notes and used the issuance proceeds to fully redeem the original notes on their optional redemption date (April 16, 2026). The portfolio secures the new notes with the beneficial interest remaining with the issuer. The transaction parties acknowledged that there are no further liabilities outstanding for the original notes after the closing date. The pool for Bridgegate Funding PLC contains GBP1.324 billion first-lien buy-to-let (BTL) (53.0%) and nonconforming (47.0%) mortgage loans backed by properties located in England, Wales, Scotland, and Northern Ireland. The loans were originated by The Mortgage Business PLC (TMB) between 1989 and 2013, with most originated between 2003 and 2008. Of the pool, 41.3% are owner-occupied loans that are interest-only. As part of the refinancing, there have been a significant number of changes that have introduced additional risks to the transaction that we do not consider to be fully mitigated. As a result, S&P has applied additional stresses while performing its credit and cash flow analysis to capture these risks. The pool has significant exposure to past maturity loans (12.2%) and high levels of arrears (25.4%, with 19.8% of the pool in 90+ days arrears). Asset performance has deteriorated significantly since origination. However, since mid-2024, the performance on the portfolio has stabilized, which is the same time as inflationary pressures eased and policy interest rates began to fall. The loans in the pool are well seasoned with a weighted-average seasoning of 20 years. In our view, more-seasoned performing loans exhibit lower risk profiles than less-seasoned loans. However, due to exposure to loans in arrears (25.4%), S&P does not give seasoning credit to any well-seasoned loans that are in arrears. TMB has significant residential servicing experience and is contracted to administer the loans on the issuer's behalf. S&P said, "We believe its team is experienced and it has well-established and fully integrated servicing systems and policies. We reviewed its servicing and default management processes, and we believe it is capable of performing its functions in the transaction." S&P said, "There are no rating constraints in the transaction under our counterparty, operational risk, or structured finance sovereign risk criteria. We consider the issuer to be bankruptcy remote." Ratings Class Rating* Amount (mil. GBP) A AAA (sf) 1,098.774 B-Dfrd AA (sf) 56.263 C-Dfrd A+ (sf) 29.786 D-Dfrd BBB+ (sf) 33.095 E-Dfrd BB (sf) 23.167 F-Dfrd B- (sf) 23.167 Z NR 59.573 X-Dfrd CCC (sf) 13.239 R NR 4.212 S1 Certs NR N/A S2 Certs NR N/A Residual Certificates NR N/A *S&P's ratings address timely receipt of interest and ultimate repayment of principal on the class A notes, and ultimate repayment of interest and principal on the class B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, F-Dfrd, and X-Dfrd notes. S&P's ratings also address the timely receipt of interest on the class B–Dfrd to X-Dfrd notes when they become the most senior outstanding. All interest deferred before a note becoming most senior is due by the legal final maturity date. NR--Not rated. N/A--Not applicable. HARVEST FUNDING: S&P Assigns Prelim CCC(sf) Rating to X-Dfrd Notes ------------------------------------------------------------------ S&P Global Ratings assigned preliminary credit ratings to Harvest Funding PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, F-Dfrd, and X-Dfrd notes. At closing, the issuer will also issue unrated class Z notes and residual certificates. S&P said, "Our preliminary ratings address the timely payment of interest and the ultimate payment of principal on the class A notes. Our preliminary ratings on the class B-Dfrd to X-Dfrd interest deferrable notes address the ultimate payment of interest and principal, until they are the most senior notes outstanding (not applicable to the class X-Dfrd notes), at which point interest cannot be deferred in line with the transaction events of default." The provisional pool contains GBP1.96 billion nonconforming mortgage loans backed by properties located in England, Wales, Scotland, and Northern Ireland. The loans were originated by BoS and Birmingham Midshires between 2003 and 2025, with most originated in 2006 and 2007. The provisional pool balance comprises owner-occupied (85.9%) and BTL properties (14.1%). The loans in the pool are well-seasoned with a weighted-average seasoning of 18 years. Compared to its predecessor (Valley Funding PLC), arrears are lower (15.2% versus 53.5%), as are past maturity interest-only loans (8.0% versus 11.8%), and the proportion of reperforming loans (1.2% versus 23.1%). BoS has significant residential servicing experience and is contracted to administer the loans on the issuer's behalf. The issuer is exposed to BoS as the transaction account provider and collection account provider. The documented replacement mechanisms for this counterparty adequately mitigate the transaction's exposure to counterparty risk in line with S&P's criteria. The transaction is not exposed to setoff or commingling risks. The issuer is an English special-purpose entity, which S&P considers to be bankruptcy remote. It expects the legal structure, transaction documents, and legal opinions to be in line with its legal criteria at closing. Preliminary ratings Class Rating Class size (%) A AAA (sf) 87.00 B-Dfrd AA (sf) 3.50 C-Dfrd A (sf) 3.00 D-Dfrd BBB+ (sf) 1.50 E-Dfrd BB- (sf) 1.50 F-Dfrd B- (sf) 1.00 Z NR 2.50 X-Dfrd CCC (sf) 1.50 Residual Certificates NR N/A Dfrd--Deferrable. NR--Not rated. N/A--Not applicable. =============== X X X X X X X X =============== [] BOOK REVIEW: The Turnaround Manager's Handbook ------------------------------------------------- Author: Richard S. Sloma Publisher: Beard Books Soft cover: 226 pages List Price: $34.95 Review by Gail Owens Hoelscher In the introduction to this book, the author suggests that an accurate subtitle could be "How to Become a Successful Company Doctor." Using everyday medical analogies throughout, he targets "corporate general practitioners" charged with the fiscal health of their companies. As with many human diseases, early detection of turnaround situations is critical. The author describes turnaround situations as a continuum differentiated by length of time to disaster: "Cash Crunch," "Cash Shortfall," "Quantity of Profit," and "Quality of Profit." The book centers on 13 steps to a successful turnaround. The steps are presented in a flowchart form that relates one to another. Extensive data collection and analysis are required, including the quantification of 28 symptoms, the use of 48 diagnostic and analytical tools, and up to 31 remedial actions. (In case the reader balks at the effort called for, the author points out that companies that collect and analyze such data on a regular basis generally don't find themselves in a turnaround situation to begin with!) The first step is to determine which of 28 symptoms are plaguing the company. The symptoms generally pertain to manufacturing firms, but can be applied to service or retail companies as well. Most of the symptoms should be familiar to the reader, but the author lays them out systematically, and relates them to the analytical tools and remedial actions found in subsequent chapters. The first seven involve the inability to make various payments, from debt service to purchase commitments. Others include excessive debt/equity ratio; eroding gross margin; increasing unit overhead expenses; decreasing product line profitability; decreasing unit sales; and decreasing customer profitability. Step 2 employs 48 diagnostic and analytical tools to derive inferences from the symptom data and to judge the effectiveness of any proposed remedy. The author begins by saying ". . . if the only tool you have is a hammer, you will view every problem only as a nail!" He then proceeds to lay out all 48 tools in his medical bag, which he sorts into two kinds, macro- and micro- tools. Macro-tools require data from several symptoms or assess and evaluate more than a single symptom, whereas micro-tools more general-purpose in function. The 12 macro-tools run from "The Art of Approximation" to "Forward-Aged Margin Dollar Content in Order Backlog." The 36 micro-tools include "Product Line Gross Margin Percent Profitability," Finance/Administration People-Related Expenses As Percent Of Sales," and "Cumulative Gross $ by Region." Next, managers are directed to 31 possible remedial actions, categorized by the four stage turnaround continuum described above. The first six actions are to be considered at the Cash Crunch stage, and range from a fire-sale of inventory to factoring accounts receivable. The next six deal with reducing people-related expenses, followed by 13 actions aimed at reducing product- and plant-related expenses. The subsequent five actions include eliminating unprofitable products, customers, channels, regions, and reps. Finally, managers are advised on increasing sales and improving gross margin by cost reduction in various ways. The remaining steps involve devising the actual turnaround plan, ensuring management and employee ownership of the plan, and implementing and monitoring the plan. The advice is comprehensive, sensible and encouraging, but doesn't stoop to clich, or empty motivational babble. The author has clearly operated on patients before and his therapeutics have no doubt restored many a firm's financial health. ********* 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 * * *