260508.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, May 8, 2026, Vol. 27, No. 92
Headlines
F R A N C E
BISCUIT HOLDING: S&P Cuts ICR to 'SD' on Deferred Interest Payment
FORVIA SE: S&P Affirms 'BB-' LT ICR, Alters Outlook to Positive
G E O R G I A
BASISBANK JSC: Fitch Affirms 'B+' LT IDR, Alters Outlook to Pos.
G E R M A N Y
TK ELEVATOR: S&P Places 'B' Issuer Credit Rating on Watch Positive
I R E L A N D
AQUEDUCT EUROPEAN 17: Fitch Puts 'B-sf' Final Rating to Cl. F Notes
I T A L Y
AUTO ABS 2026-1: Fitch Assigns 'BB+(EXP)sf' Rating to Class E Notes
X3G MERGECO: Fitch Lowers Long-Term IDR to 'B+', Outlook Negative
N E T H E R L A N D S
HILL FL 2026-1: Fitch Assigns 'BB+(EXP)sf' Rating to Class E Notes
S E R B I A
TELEKOM SRBIJA: S&P Rates New EUR1.95BB Sr. Unsecured Notes 'BB-'
S W E D E N
AINAVDA PARENTCO: S&P Alters Outlook to Negative, Affirms 'B' ICR
ASSEMBLIN CAVERION: Moody's Ups CFR & Senior Secured Notes to B1
U N I T E D K I N G D O M
ACACIUM GROUP: S&P Lowers ICR to 'CCC' on Elevated Default Risk
CD&R AND WSH: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable
CHELWOOD HOUSE: FRP Advisory, BTG Named as Joint Administrators
DIAMOND MANUFACTURERS: May 12 Hearing Set in Bankr. Bid v. Vashi
DUNCAN HOUSE: FRP Advisory, BTG Appointed as Joint Administrators
GLENTWORTH STREET: FRP Advisory, BTG Named as Joint Administrators
HOLLEN STREET: FRP Advisory, BTG Appointed as Joint Administrators
ONSLOW GARDENS: FRP Advisory, BTG Named as Joint Administrators
TOGETHER ASSET 2026-1-CRE-6: Fitch Rates Class X Notes 'BB+(EXP)sf'
X X X X X X X X
[] BOOK REVIEW: Bendix-Martin Marietta Takeover War
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F R A N C E
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BISCUIT HOLDING: S&P Cuts ICR to 'SD' on Deferred Interest Payment
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S&P Global Ratings lowered its issuer credit rating on Biscuit
Holding S.A.S. (Biscuit International; BI) to 'SD' (selective
default) from 'CCC-', and its issue rating on its EUR150 million
second-lien instrument to 'D' (default) from 'C'. S&P affirmed its
'CCC-' issue rating on its EUR695 million term loan B (TLB).
BI has received approval from its second-lien debt holders to defer
the interest payment, due March 31, 2026, on its EUR150 million
second-lien facility maturing in February 2028.
S&P views this as a default under its rating definitions, because
the deferred payment obligation has surpassed the 30 calendar days
stipulated by its methodology.
S&P views the deferred payment of BI's EUR150 million second-lien
facility in agreement with lenders, as a default since creditors
will not receive what they were initially promised. This is
regardless of their consent to defer the payment. The rating action
follows BI's deferred interest payment due March 31, 2026 within
the 30-calendar day period defined by our criteria. BI deferred the
interest payment following a consensual arrangement with the
second-lien lenders as it continues negotiations with all the
lender groups for a debt restructuring transaction.
The group has the following debt maturities approaching:
-- EUR85 million revolving credit facility (RCF) due August 2026,
-- EUR695 million term loan B (TLB),
-- EUR130 million pari passu (same-level ranking) notes due
February 2027, and
-- EUR150 million second-lien facility due February 2028.
S&P said, "Given these upcoming maturities, we expect the ongoing
negotiations will most likely result in BI executing an
amend-and-extend (A&E) transaction, which we would consider to be
equivalent to a default over the near term. The issuer credit
rating on BI is 'SD' (rather than 'D') because we understand the
group remains current on its other obligations.
"We expect to reassess our ratings on BI in the following days. We
will outline the next steps in our analysis and ratings once we
have more information on the progress of the A&E negotiations."
FORVIA SE: S&P Affirms 'BB-' LT ICR, Alters Outlook to Positive
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S&P Global Ratings revised the outlook on its rating on Forvia SE
to positive from stable. S&P also affirmed its long-term issuer
credit rating on Forvia SE and our issue rating on its unsecured
debt at 'BB-'.
The positive outlook indicates that S&P could raise its ratings on
Forvia over the next 12 months if its adjusted FFO to debt to
comfortably exceeds 15% and its adjusted free operating cash flow
(FOCF) to debt remains above 5%, despite challenging market
conditions.
Forvia SE has announced that it signed an agreement to sell its
interiors division to Apollo Funds. This underpins the group's
commitment to reduce its debt in line with its IGNITE strategic
plan.
In S&P's view, the transaction is part of Forvia's effective
deleveraging strategy, which should support the adjusted funds from
operations (FFO)-to-debt ratio exceeding 15% from 2026, improving
from 2025.
Risks to S&P's base-case scenario stem from negative consumer
sentiment that affects demand and could potentially affect global
automotive production volumes in relation to energy prices
remaining higher for longer.
S&P Global Ratings thinks that Forvia's announcement that it signed
an agreement to sell its noncore interiors business to Apollo Funds
reemphasizes the group's commitment to its deleveraging targets.
Upon closing of the transaction, expected in fourth quarter 2026
subject to regulatory approvals and consultations with work
councils, Forvia will use the proceeds to repay debt, with a net
debt reduction above EUR1 billion and a gross debt reduction of
above EUR1.4 billion. S&P said, "We view this divestment, along
with the suspension of common dividend payments in 2025 and 2026,
as reflective of Forvia's credit friendly financial policy. The
group is targeting a reported net debt-to-EBITDA ratio of 1.2x by
2028 (from 1.7x as of Dec. 31, 2025, and 1.5x expected by Dec. 31,
2026) through a continued focus on free cash flow generation and
smaller asset disposals. The interiors division generated sales of
about EUR4.8 billion in 2025 (18% of group's sales) and below the
group's average operating margin. Although Interiors is the group's
second largest division in terms of sales, we expect limited
efficiency losses from the disposal. This is because of the
insignificant overlap with the group's other divisions. With about
EUR21.4 billion of sales in 2025 after International Financial
Reporting Standards (IFRS) 5 and a business portfolio encompassing
five business units, Forvia remains a large and global tier 1 auto
supplier, with a well-diversified product portfolio covering
seating, electronics, lighting, clean mobility, and life cycle
solutions."
The disposal of the interiors business, combined with Forvia's EU
Forward and Simplify programs, will support the group's EBITDA
margin recovery over 2026-2028, barring a material deterioration in
economic conditions from a prolonged war in Middle East. S&P said,
"We forecast that Forvia's S&P Global Ratings-adjusted EBITDA
margin (post IFRS5) will increase to about 9.4% in 2026 from 8.9%
in 2025, despite declining global automotive production and our
expectation that the group's sales will decline by 5%. Efficiencies
from the restructuring initiatives launched in 2024 and lower
restructuring costs of about EUR250 million down from about EUR324
million in 2025 should drive most of the upside. The group reported
sales of about EUR5.1 billion in first quarter 2026, down 6.4%
compared with the previous year, including a negative impact of
4.3% from foreign exchange rates, and outperforming auto production
volumes by 1.2 points. We anticipate that Forvia's adjusted FFO to
debt will improve to 16%-17% in 2026 and to 18%-20% in 2027-2028,
in line with the 15%-20% level we view as commensurate for a higher
rating. However, we think that there is a high degree of
uncertainty on automotive demand in relation to the Middle East
war. While Forvia has demonstrated the ability to pass through cost
increases linked to raw materials and to the U.S. tariffs to its
original equipment manufacturer (OEM) customers, we think that
negotiations with OEMs could now be more difficult than previously
because of OEMs' much weaker pricing power compared to 2022-2023."
S&P said, "We expect Forvia's FOCF to be less dependent on working
capital efficiencies in 2026. We forecast that the group will
generate adjusted FOCF of about EUR545 million in 2026, assuming a
declining contribution from working capital inflows of about EUR150
million compared with about EUR470 million in 2025 (excluding
factoring changes). We anticipate that EBITDA growth, moderately
lower cash interest expenses, and its capital expenditure
(capex)-to-sales ratio of about 3.0% will support Forvia's cash
flow. Considering the group's updated common dividend policy and
lower dividends payment to minority shareholders post transaction
we estimate Forvia will maintain sound discretionary cash flow of
about EUR370 million in 2026. In our view, Forvia's forecast FOCF
to debt of 8.5% for 2026 represents upside to the 'BB-' rating. We
also expect the quality of Forvia's FOCF to improve because we
estimate that FFO to debt before working capital effects will
increase to about 6% in 2026, from 0% in 2024 and negative 2.1% in
2023.
"The positive outlook indicates that we could raise our ratings on
Forvia over the next 12 months if its adjusted FFO to debt to
comfortably exceeds 15% and its adjusted FOCF to debt remains above
5%, despite challenging market conditions.
"We could revise our outlook on our rating on Forvia to stable if
we anticipate FFO to debt will remain below 15% or if its FOCF to
debt declines below 5% sustainably. This could stem from a further
contraction in global auto production, setbacks with cost-savings
initiatives, or prolonged disruptions from geopolitical tensions,
resulting in adjusted EBITDA margins declining to 8% or below.
"We could raise our rating on Forvia if we anticipate its FFO to
debt will improve above 15% sustainably and gradually converge
toward 20%, while it maintains FOCF to debt sustainably above 5%.
We estimate this would require Forvia's adjusted EBITDA margin to
increase closer to 9% and could stem from the successful execution
of the group's targeted operating efficiencies."
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G E O R G I A
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BASISBANK JSC: Fitch Affirms 'B+' LT IDR, Alters Outlook to Pos.
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Fitch Ratings has revised JSC Basisbank's (Basis) Outlook to
Positive from Stable and affirmed the Long-Term Issuer Default
Rating (IDR) at 'B+'. The Viability Rating (VR) has been affirmed
at 'b+'.
The rating action follows Basis's acquisition of 96% shares of its
closest peer JSC Liberty Bank, which Basis aims to fully integrate
within a single group by end-2026. The transaction is mainly funded
by debt at the shareholder level.
Key Rating Drivers
The revision of the Outlook to Positive reflects Fitch's view that
the acquisition is likely to have positive medium-term credit
implications for Basis's consolidated group, driven by a much
larger business scale, enhanced competitive position and greater
diversification.
Fitch also expects Basis's core capital to remain moderate,
supported by large equity injection, which substantially offsets
the significant negative impact of the large-scale acquisition.
However, most of the equity injection is debt-funded at the
shareholder level. Fitch believes any capital or liquidity
withdrawal from Basis by the shareholder to service its debt will
be limited, constrained by regulatory capital requirements and the
related-party lending limit, and also because of the shareholder's
commitment to repay the debt with its own funds.
Strong Economy Supports Banks: Strong domestic economic conditions
continue to support banks' metrics. A significant inflow of
migrants, the strong information and communication technology and
tourism sectors, and Georgia's greater role in transit trade
boosted real GDP growth to an average of 9.5% in 2022-2024. In
2025, growth was 7.5% and Fitch expects an average of 5% in
2026-2027. Spillovers from the Iranian conflict have so far been
limited for the banking sector, local currency, and economic
growth.
Liberty's Acquisition Doubles Scale: The acquisition of Liberty
Bank (5.6% of sector assets at end-2025) by Basis (4.5%) more than
doubles the consolidated group's size and makes it the
third-largest banking group in the sector. The acquisition should
also enhance the bank's competitive position and diversification.
Basis aim to complete the merger by end-2026.
Diversification Benefits: The acquisition will reduce the share of
Basis's concentrated and dollarised corporate loans to about 30% of
the consolidated portfolio at end-2026, from 52% at end-2025, in
favour of granular, local-currency micro and consumer lending,
resulting in greater risk diversification. Fitch also expects Basis
to derive considerable synergies in SMEs and mortgages, which will
remain stable as a share of the combined book at 20% and 15%,
respectively. Fitch expects loan dollarisation to decline to 35% at
end-2026, from 51% at end-2025.
Stable Impaired Loans, Improving Provisioning: Stage 3 loans ratio
was stable, at 3.3% at end-2025, supported by strong economic
growth in Georgia. Stage 2 loans were higher at 4.8% at end-2025
and slightly up from end-2024. Its asset-quality ratios will remain
broadly unchanged upon Liberty's consolidation, due to similar
metrics at the latter. However, Fitch estimates reserve coverage of
impaired loans by total loan loss allowances will significantly
improve to a moderate 60%-65% at end-2026 from a weak 28% at Basis
at end-2025, supported by Liberty's higher provisioning levels.
Reasonable Profitability: Operating profit was a solid 3.5% of
risk-weighted assets (RWAs) in 2025. As Liberty's profitability is
slightly stronger, its consolidation should support the enlarged
group's results, although potential integration costs could weigh
on performance in the near term.
Capital Weakens but Stays Moderate: Fitch expects Basis's common
equity Tier 1 (CET1) ratio to decline to a still reasonable 13% by
end-2026, following the merger, from 16% at end-2025. Core capital
is underpinned by a large equity injection in April 2026 (equal to
14% of RWAs), aimed at supporting the acquisition. Fitch expects
the group to restore its CET1 ratio to above 14% by end-2027. While
the group will be compliant with the minimum CET1 requirement, it
may rely on regulatory forbearance to meet the Tier 1 and total
capital minimums over the next two years.
Deposit Concentrations: The loans/deposits ratio materially
improved to a below-sector-average 97% at end-2025, from 118% at
end-2024, driven by several lumpy deposit inflows, which further
increased the bank's already high deposit concentrations. Liberty's
more granular deposit base should support greater funding
diversification for the combined entity.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Outlook on Basis could be revised to Stable if the bank's
capitalisation weakens beyond Fitch's expectations following the
consolidation of Liberty. This could result from a combination of
aggressive growth, dividend distributions and weaker internal
capital generation due to high integration costs or the unexpected
recognition of asset-quality problems requiring significant
provisioning.
Basis's ratings could be downgraded due to a material weaking of
capitalisation or a depletion of the liquidity buffer.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Basis's ratings could be upgraded on a record of business-model
stability and strong financial performance following Liberty's
integration, alongside a strengthening of the group's company, risk
and funding profiles. An upgrade would also require Basis to
demonstrate a sustainable recovery in the consolidated CET1 ratio
with a clear upward trajectory.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
The 'B' Short-Term IDR is the only option mapping to a 'B+'
Long-Term IDR.
The Government Support Rating (GSR) of 'no support' reflects
Fitch's view that resolution legislation in Georgia, combined with
constraints on the ability of the authorities to provide support
(especially in foreign currency), means that government support,
although still possible, cannot be relied upon.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
The Short-Term IDR is sensitive to changes in the Long-Term IDR.
Upside for the GSR is currently limited and would require a
substantial improvement of sovereign financial flexibility as well
as an extended record of timely and sufficient capital support
being provided to local banks.
VR ADJUSTMENTS
The asset quality score of 'b+' is below the 'bb' category implied
score due to the following adjustment reason(s): concentrations
(negative).
The capitalisation and leverage score of 'b+' is below the 'bb'
category implied score due to the following adjustment reason(s):
regulatory capitalisation (negative).
The funding and liquidity score of 'b+' is below the implied
category score of 'bb' due to the following adjustment reason:
deposit structure (negative).
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 Prior
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JSC Basisbank LT IDR B+ Affirmed B+
ST IDR B Affirmed B
Viability b+ Affirmed b+
Government Support ns Affirmed ns
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G E R M A N Y
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TK ELEVATOR: S&P Places 'B' Issuer Credit Rating on Watch Positive
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S&P Global Ratings placed on CreditWatch with positive implications
its 'B' issuer credit rating on TK Elevator Topco GmbH and its
subsidiaries as well as the 'B' issue ratings on its debt.
S&P anticipates resolving the CreditWatch placement following
transaction closing, which is subject to customary regulatory and
shareholder approvals and expected to occur in the second quarter
of 2027 at the earliest.
KONE (not rated) has entered into an agreement to acquire the TK
Elevator group (TKE) in a cash-and-share transaction implying an
enterprise value of about EUR29.4 billion.
KONE plans to acquire 100% of the issued share capital of Vertical
Topco II S.A., which holds all assets of TK Elevator Topco GmbH and
its subsidiaries. S&P expects TKE to become part of KONE and that
the combined group will have a better business profile and
significantly better credit metrics than TKE on a stand-alone
basis.
The CreditWatch positive placement reflects the announced
acquisition of TKE by KONE and our expectation that the transaction
will strengthen the combined group's credit quality. On April 29,
2026, KONE announced it had agreed to acquire TKE from a consortium
led by Advent and Cinven in a cash-and-share transaction implying
an enterprise value of about EUR29.4 billion. The consideration
comprises a EUR5 billion cash component and the issuance of up to
270 million new KONE class B shares, valued at about EUR15.2
billion. S&P said, "We understand that TKE's existing debt is
expected to be fully refinanced at closing, and we expect the
payment-in-kind (PIK) notes issued at Vertical Topco II S.A. to be
considered within the potential closing steps of the transaction.
We anticipate TKE will be fully integrated into KONE's operations.
Pro forma, the combined group would benefit from much larger scale,
a broader and more balanced geographic footprint, and a high share
of recurring service revenue, supporting earnings stability and
cash flow visibility."
The combined group would be nearly double the size of the current
KONE group based on the last financial year, with combined revenue
of about EUR20.5 billion and about EUR3.3 billion in adjusted
EBITDA (excluding synergies). In addition, KONE expects cost
synergies of about EUR700 million, primarily through higher density
of service networks, the combination of research and development
capabilities, platform optimization, procurement efficiencies, as
well as overhead savings. Furthermore, KONE has indicated its
intention to target an investment-grade rating for the combined
group, and we note that it currently operates with a net cash
position and that a material part of the purchase price will be
financed with new equity. S&P said, "As a result, we expect
leverage of the combined group to be materially lower than for TKE
on a stand-alone basis. In our current base case for TKE, we
forecast S&P Global Ratings-adjusted debt to EBITDA--excluding PIK
notes--of about 6.7x-6.9x in fiscal 2026 (ending Sept. 30), and
about 6.4x-6.6x in fiscal 2027, down from about 7.7x in fiscal
2025."
S&P said, "Finally, we expect TKE to continue to address the
refinancing of its upcoming debt maturities. The company has
already made progress, having refinanced a substantial portion of
its July 2027 maturity with the issuance of approximately EUR1.959
billion senior secured notes at the end of March. We anticipate
that TKE will similarly address the remaining EUR0.5 billion
balance.
"The CreditWatch positive placement reflects the likelihood that we
could raise our ratings on TKE following the expected acquisition
by KONE. This is based on our expectation that the transaction will
be completed as announced and will result in a stronger credit
profile, supported by the full refinancing of TKE's existing debt
and a financial policy aligned with KONE's stated commitment to
target an investment-grade rating post closing.
"Conversely, we could affirm the rating on TKE if the transaction
does not proceed as expected.
"We expect to resolve the CreditWatch placement upon completion of
the transaction."
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AQUEDUCT EUROPEAN 17: Fitch Puts 'B-sf' Final Rating to Cl. F Notes
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Fitch Ratings has assigned Aqueduct European CLO 17 DAC final
ratings, as detailed below.
Entity/Debt Rating
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Aqueduct European
CLO 17 DAC
A Loan LT AAAsf New Rating
A Notes XS3303587268 LT AAAsf New Rating
B XS3303587425 LT AAsf New Rating
C XS3303587771 LT Asf New Rating
D XS3303587938 LT BBB-sf New Rating
E XS3303588159 LT BB-sf New Rating
F XS3303588316 LT B-sf New Rating
Subordinated Notes
XS3303588746 LT NRsf New Rating
Z XS3303588589 LT NRsf New Rating
Transaction Summary
Aqueduct European CLO 17 DAC is a securitisation of mainly senior
secured obligations (at least 90%) with a component of senior
unsecured, mezzanine, second-lien loans and high-yield bonds. Note
proceeds have been used to fund a portfolio with a target par of
EUR500 million.
The portfolio is actively managed by HPS Investment Partners CLO
(UK) LLP. The collateralised loan obligation (CLO) has a 4.5-year
reinvestment period and an 8.5-year weighted average life (WAL)
test at closing.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors in the identified portfolio at
'B'/'B-'. The Fitch weighted average rating factor of the
identified portfolio is 23.3.
High Recovery Expectations (Positive): At least 90% of the
portfolio comprises senior secured obligations. The recovery
prospects for these assets are more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate of the identified portfolio is 61.5%.
Diversified Asset Portfolio (Positive): The transaction has various
portfolio concentration limits, including a top 10 obligor
concentration limit of 20% and a maximum exposure to the three
largest Fitch-defined industries at 40%. These covenants ensure
that the asset portfolio will not be exposed to excessive
concentration.
Portfolio Management (Neutral): The transaction includes two sets
of Fitch test matrices (set A and set B). Each set contains two
matrices with fixed-rate limits of 5% and 12.5%. Set A applies at
the closing date and is linked to an 8.5-year WAL test covenant.
The collateral manager may switch to set B 12 months after the
closing date, which references a 7.5-year WAL test covenant. The
switch to set B is conditional on the collateral principal amount
(with defaults at Fitch collateral value) at least being at the
reinvestment target par balance.
The transaction has a 4.5-year reinvestment period and includes
reinvestment criteria similar to those of other European
transactions. Fitch's analysis is based on a stressed case
portfolio with the aim of testing the robustness of the transaction
structure against its covenants and portfolio guidelines.
Cash Flow Modelling (Positive): The WAL used for the transaction's
Fitch-stressed portfolio and matrices analysis is 12 months less
than the WAL test covenant, to account for strict reinvestment
conditions after the reinvestment period, including (i) the
satisfaction of the over-collateralisation test, (ii) passing the
Fitch's 'CCC' limit test, which is capped at 7.5%, and (iii) a
consistently decreasing WAL test covenant. These conditions 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 A and B notes, and lead to
downgrades of one notch each for the class C, D and E notes, and to
below 'B-sf' for the class F notes.
Downgrades, which are based on the identified portfolio, may occur
if the loss expectation is larger than assumed, due to unexpectedly
high levels of default and portfolio deterioration. The class B, C,
D, E and F notes each have a rating cushion of two notches, due to
the better metrics and shorter life of the identified portfolio
than the Fitch-stressed portfolio.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio be eroded either due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
and a 25% decrease of the RRR across all ratings of the
Fitch-stressed portfolio would lead to downgrades of three notches
each for the class A and class D notes, four notches each for the
class Band C notes, and to below 'B-sf' for the class E and F
notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR and a 25% increase in the RRR
across all ratings of the Fitch-stressed portfolio would lead to
upgrades of up to two notches each for the notes, except 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 to cover losses in the remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
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 Aqueduct European
CLO 17 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.
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I T A L Y
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AUTO ABS 2026-1: Fitch Assigns 'BB+(EXP)sf' Rating to Class E Notes
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Fitch Ratings has assigned Auto ABS Italian Stella Loans S.r.l.
(Series 2026-1) expected ratings.
The assignment of final ratings is contingent on the receipt of
final documents conforming to information reviewed.
Entity/Debt Rating
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Auto ABS Italian
Stella Loans S.r.l.
(Series 2026-1)
A1 IT0005707887 LT AA+(EXP)sf Expected Rating
A2 IT0005707895 LT AA+(EXP)sf Expected Rating
B IT0005707903 LT AA(EXP)sf Expected Rating
C IT0005707911 LT A-(EXP)sf Expected Rating
D IT0005707929 LT BBB-(EXP)sf Expected Rating
E IT0005707945 LT BB+(EXP)sf Expected Rating
Transaction Summary
Auto ABS Italian Stella Loans S.r.l. (Series 2026-1) will be
securitisation of Italian balloon or amortising auto loans
originated by Stellantis Financial Services Italia (SFS), a captive
lender resulting from a joint venture between Stellantis Financial
Services Europe (not rated) and Santander Consumer Bank S.p.A. (not
rated). It will have a six-month revolving period.
KEY RATING DRIVERS
Low Expected Defaults: Historical default rates for SFS are lower
than for other captive auto loan lenders operating in Italy. The
preliminary portfolio comprises loans advanced to private borrowers
(91.1%) and commercial borrowers (8.9%). Fitch derived separate
asset assumptions for different products, reflecting varying
performance expectations and products. Fitch has assumed a weighted
average (WA) base-case lifetime default and recovery rate of 2.1%
and 29.1%, respectively, for the total portfolio.
Balloon Loans Risk Addressed: The preliminary portfolio consists
partly of balloon loans (45.9% of the pool balance), while the
remainder comprises amortising auto loans. Balloon loan borrowers
may face a payment shock at maturity if they cannot refinance the
balloon amount or return or sell their car. Fitch has considered
this additional default risk by applying a higher default multiple.
The WA default multiple of the portfolio is 5.3 x at 'AA+(EXP)sf'.
Limited Data for Multi-Step Loans: Multi-step loans comprise 7.9%
of the portfolio, with no restrictions during the revolving period.
Multi-step loans feature two repayment phases, whereby the
instalment of the first phase is lower than that of the second
phase. SFS began originating these loans in 2021, and the data
history is currently shorter than for other products it offers.
Fitch has factored this into the default multiples for sub-pools
with a significant proportion of multi-step loans, such as private
used and private new standard loans.
No Servicing Fees Modelled: The deal envisages an amortising
replacement servicer fee reserve that will be funded on certain
triggers being breached. The reserve is adequate to cover its
stressed servicer fees at the notes' maximum achievable rating
throughout the transaction's life. Therefore, no servicing fees are
modelled in its cash flow analysis, resulting in the availability
of higher excess spread for the structure.
Excess Spread Notes' Rating Constrained: The class E notes are not
collateralised and their interest and principal are paid from
available excess spread. The class E notes start amortising from
the issue date and during the six-month revolving period. Fitch
constrained the excess spread notes' ratings at 'BB+sf' in line
with its Global Structured Finance Rating Criteria.
'AA+sf' Sovereign Cap: Italian structured finance transactions are
capped at six notches above Italy's Issuer Default Rating (IDR,
BBB+/Stable/F1), which is the case for the class A notes. The
Stable Outlook on these notes reflects that on the sovereign.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The class A notes' ratings, at the applicable rating cap, are
sensitive to changes to Italy's Long-Term IDR. A downgrade of
Italy's IDR and the related rating cap for Italian structured
finance transactions, currently 'AA+sf', could trigger a downgrade
of the class A notes' ratings.
Unexpected increases in the frequency of defaults or decreases in
recovery rates that could produce loss levels larger than the base
case could result in negative rating action on the notes. For
example, a simultaneous increase in the default base case by 25%
and decrease in the recovery base case by 25% would lead to
downgrades of up to three notches for the class B notes, two
notches for the class C and D notes and one notch for the class E
notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of Italy's IDR and revision of the related rating cap
for Italian structured finance transactions could trigger an
upgrade of the class A notes.
An unexpected decrease in the frequency of defaults or an increase
in the recovery rates could produce loss levels lower than the base
case. For example, a simultaneous decrease in the default base case
by 25% and an increase in the recovery base case by 25% would lead
to upgrades of up to three notches for the class C and D notes and
one notch for the class B notes, provided there were no qualitative
arising elements that could limit the ratings.
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.
Fitch conducted a review of a small targeted sample of the
originator's origination files and found the information contained
in the reviewed files to be adequately consistent with the
originator's policies and practices and the other information
provided to the agency about the asset portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
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.
X3G MERGECO: Fitch Lowers Long-Term IDR to 'B+', Outlook Negative
-----------------------------------------------------------------
Fitch Ratings has downgraded X3G Mergeco S.p.A.'s (X3) Long-Term
Issuer Default Rating (IDR) to 'B+' from 'BB-'. The Outlook on the
Long-Term IDR is Negative. Fitch has also downgraded the rating of
X3's EUR500 million senior secured notes (SSNs) to 'B+' from 'BB-',
with a Recovery Rating of 'RR4'.
X3 is a holding company established by ION Group to acquire Prelios
S.p.A., an Italian debt services. The acquisition closed in July
2024. X3 holds 100% of Prelios's shares and has no other assets,
besides intangibles stemming from the acquisition. X3 plans a
reverse merger into Prelios with the latter being the surviving
legal entity.
Key Rating Drivers
Higher Leverage: The downgrade reflects X3 continuing to operate at
higher leverage than Fitch expected, amid slower-than-projected
growth in EBITDA from debt servicing. Prelios has reduced its
revenue expectations for 2026 relative to last year's business
plan, and Fitch forecasts 2026 EBITDA to be materially below its
previous expectations, despite some improvements in 2H25 and in the
budget for 2026. Cost optimisation in 2025 was in line with budget,
and Fitch expects EUR20 million yearly savings in 2026-2027, but
deleveraging to below 3.5x in the next 12-to-18 months is subject
to execution risk.
At end-2025, X3's Fitch-calculated gross debt/EBITDA was 4.3x,
above both the previous downgrade trigger (leverage sustained below
3.5x) and Fitch's previous projection for end-2025 (3.7x)
ESG Transparency and Governance: The rating action also considers
Fitch's current perception of X3's more aggressive capital
management. This is reflected in the ESG Relevance Scores for
Financial Transparency and Governance Structure, as these factors
are highly relevant to the rating.
Funding Access Drives Negative Outlook: In Fitch's view, X3's
access to debt capital markets could weaken over the next 12-to-18
months due to an adverse market environment and X3's approach to
capital management. X3's bank loan matures in July 2027 (end-4M26:
EUR80 million, following the SSNs issue and a EUR20 million
prepayment), weighing on Fitch's assessment of X3's and Prelios's
funding profiles, although X3 could extend the loan's tenor by two
years with the banks' consent. X3 issued EUR500 million SSNs in
2025 at a discount (8% in May 2025, 4.5% in September 2025) with a
7% coupon, suggesting in Fitch's opinion that funding access is
likely to remain costly.
Real Estate-Focused Company: Prelios is an Italian debt servicer,
real estate fund manager and service provider. Debt servicing
comprised over 65% of its revenue and most of its EBITDA in 2025.
Prelios has a long record in non-performing loans secured by real
estate and has expanded into unlikely-to-pay loans (UTPs).
Adequate EBITDA Margin: Prelios has returned to meaningful
profitability in recent years following its corporate
restructuring, and its EBITDA margin compares well with peers'.
Fitch's view of Prelios's profitability balances the absence of
upfront payments to gain new debt servicing mandates against a
material increase in interest costs resulting from X3's acquisition
debt.
Sound Domestic Franchise: X3's Long-Term IDR is based on Prelios's
standalone creditworthiness, including its strong franchise in real
estate, providing intra-group benefits. The rating also reflects
sound operating performance since Prelios' delisting and turnaround
in 2018. In Fitch's view, debt servicing is a more stable business
than debt purchasing, because it allows for more predictable cash
flow and requires low usage of the company's balance sheet. Fitch
expects Italian debt servicers to benefit from improved volumes
after the expiration of state aid, while banks will progressively
dispose of problem exposures at earlier stages.
Concentrated Business Model: Prelios has widened its franchise in
the last four years, such as though a new servicing agreement with
UniCredit, but Intesa Sanpaolo S.p.A. (A-/Stable) remains key to
its business plan. Single-client concentration is common in debt
servicing but is reducing, and it is mitigated by the long tenors
of major contracts. Prelios's other businesses (alternative
investment management and real estate services) have a longer
record, but they remain small and provide only modest EBITDA
diversification.
Scalable Platform, Longer Execution Record: The UTP market is a
fairly recent market development, where Fitch regards Prelios as
having an early mover advantage with its growing scale. Fitch
thinks Prelios is well-placed to benefit from anticipated growth in
UTP loans, especially in relation to state guarantees issued during
the pandemic.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Fitch will withdraw X3's ratings and rate Prelios on completion of
the reverse merger, because X3 will cease to exist and Prelios will
be the surviving legal entity. Fitch expects to rate Prelios in
line with X3 because Prelios's and X3's strategy, financial
performance and risk profile are largely the same.
Failure to refinance X3's bank loan in a timely manner, constrained
access to debt capital markets or a worsening liquidity profile
would be negative for ratings, as would any refinancing-related
contagion risk from other companies connected to X3.
An increase in X3's gross debt/EBITDA above 5.0x on a sustained
basis, without a credible path to deleveraging, would trigger a
downgrade. A decline in the interest coverage ratio to below 2.5x
on a sustained basis would also be negative for ratings.
A loss or material reduction of key servicing agreements, without
compensating replacement, could lead to a downgrade of X3's
Long-Term IDR.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Fitch would likely affirm X3's Long-Term IDR and assign a Stable
Outlook if gross debt/EBITDA remains below 5.0x, the bank loan is
refinanced on a timely basis and X3's liquidity profile remains
sound.
Fitch could upgrade X3's Long-Term IDR by one notch if leverage
falls and is sustainably maintained below 3.5x.
Other factors that could support an upgrade of X3's Long-Term IDR
are improved EBITDA diversification by counterparty and a
long-dated and diversified funding profile, accompanied by
continued sound financial performance.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Debt Rating Aligned With IDR: Fitch rates X3's SSNs in line with
the Long-Term IDR. This reflects Prelios's large intangible assets,
which lead to only average recovery expectations, despite the
bonds' secured nature. This is reflected in the 'RR4' Recovery
Rating.
Prelios guarantees X3's borrowings until the reverse merger is
completed, when it will assume them directly on its own balance
sheet. X3's bond rank pari passu with the rest of its acquisition
loan.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The debt rating will likely be unaffected by the reverse merger of
X3 into Prelios.
A downgrade of X3's Long-Term IDR would be mirrored in a downgrade
of its debt rating.
A perceived reduction in the recovery rates of X3's SSNs, due to
material changes to the covenant package or to a material layer of
more senior debt (contractually or structurally), could lead to
notching the rating on X3's SSNs below the IDR.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of X3's Long-Term IDR would be mirrored in an upgrade of
its debt rating.
ADJUSTMENTS
The 'bb' business profile score is below the 'bbb' category implied
score due to the following adjustment reasons: accounting policies
(negative), business model (negative).
The 'b+' funding, liquidity and coverage score is below the 'bbb'
category implied score due to the following adjustment reason:
funding flexibility (negative).
Public Ratings with Credit Linkage to other ratings
X3's ratings are linked to Fitch's assessment of the credit quality
of Prelios, into which X3 will merge.
External Appeal Committee Outcomes
In accordance with Fitch's policies the Issuer appealed and
provided additional information to Fitch that resulted in a rating
action that is different than the original rating committee
outcome.
ESG Considerations
X3 has an ESG Relevance Score of '5' for Financial Transparency and
Governance Structure. This reflects limited visibility on the
composition of its balance sheet (including goodwill and financial
liabilities) and Fitch's view of the potential for aggressive
capital management in respect of distributions. These issues have a
negative impact on the credit profile and are highly relevant to
the rating in conjunction with other factors, resulting in the
downgrade of the Long-Term IDR by one notch while maintaining a
Negative Outlook.
X3 has an ESG Relevance Score of '4' for Management Strategy and
Group Structure. This reflects limited visibility on the
composition of its balance sheet (including goodwill and financial
liabilities) and Fitch's view of the potential for aggressive
capital management in respect of distributions. These issues have a
negative impact on the credit profile and are relevant to the
rating in conjunction with other factors.
X3 has an ESG Relevance Score of '4' for Customer Welfare. In
Fitch's view, Prelios's business model as a debt servicer exposes
it to regulatory changes and conduct-related risks. These issues
have a moderately negative impact on the credit profile and are
relevant to the rating in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact,
either due to their nature or the way in which they are being
managed. 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
----------- ------ -------- -----
X3G Mergeco S.p.A. LT IDR B+ Downgrade BB-
ST IDR B Affirmed B
senior secured LT B+ Downgrade RR4 BB-
=====================
N E T H E R L A N D S
=====================
HILL FL 2026-1: Fitch Assigns 'BB+(EXP)sf' Rating to Class E Notes
------------------------------------------------------------------
Fitch Ratings has assigned Hill FL 2026-1 B.V.'s class A to E notes
expected ratings.
The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.
Entity/Debt Rating
----------- ------
Hill FL 2026-1 B.V.
Class A LT AAA(EXP)sf Expected Rating
Class B LT AA(EXP)sf Expected Rating
Class C LT A(EXP)sf Expected Rating
Class D LT BBB(EXP)sf Expected Rating
Class E LT BB+(EXP)sf Expected Rating
Class F LT NR(EXP)sf Expected Rating
Transaction Summary
Hill FL 2026-1 B.V. securitises an eight-month revolving pool of
financial auto lease receivables, including balloon amounts sold by
Hiltermann Lease B.V. (HL). Lessees are Dutch small businesses or
sole proprietors. Interest-rate mismatches between the fixed-rate
leases and the notes' variable coupons are addressed by a
balance-guaranteed swap.
KEY RATING DRIVERS
Obligor Default Risk: Fitch used a 7% base-case default rate, in
line with the previous deal, Hill FL 2025-1. Defaults have
increased substantially for leases originated in 2022, 2023 and
2024, before improving in 2025. The base case incorporates the
deterioration observed in the last few years but takes into account
the measures and refinements implemented to address the
deterioration.
The 'AAAsf' default multiple is set at 4.5x, reflecting the
base-case assumption through the economic cycle, the high absolute
level of the base case defaults, and uncertainty around the
effectiveness of the measures HL has implemented to reduce defaults
in its book, including the introduction of an advanced scorecard.
The risk profile of HL's leasing business has changed in recent
years, leading to a higher 'AAAsf' default rate than for the
previous deal.
Lower Recovery Assumptions: Fitch used a 70% recovery base case,
lower than for the previous deal, and applied a 50% haircut to
recoveries at 'AAAsf', which is in line with Hill FL 2025-1. The
reduction in the base case reflects its expectation of subdued
recoveries due to substantially lower book recoveries in recent
years than the historical average. The haircut is driven by several
factors, including the base case being above the book recoveries of
recent years.
Pro Rata Dynamics: The class A to E notes will switch to pro rata
from sequential amortisation once the class B to E notes represent
at least 19.5% of the outstanding liabilities, with an irreversible
return to sequential if the performing pool balance falls below the
rated notes (effectively a principal deficiency ledger trigger) or
if cumulative losses exceed 1%-4.5% of the pool, depending on
seasoning, among other triggers.
HL repurchases newly defaulted contracts at their outstanding
balance, ensuring swift recoveries, while any shortfall on the
eventual sale price is repaid by the SPV, subordinated to
principal. This may prolong the pro rata period by delaying the
trigger hit, as losses are only recorded when the car is sold
rather than at default net of recoveries. At the same time,
repurchased receivables cannot generate principal losses for the
transaction. Fitch considered this in its analysis by testing
scenarios in which repurchases end at different times during the
life of the deal.
Excess Spread Adds Protection: For at least 95% of the portfolio,
the issuer will benefit from all future instalments if the lessee
prepays. This reduces the negative impact on the excess spread in
the event of high prepayments. Compared with the more senior notes,
the class E notes are most sensitive to excess spread availability
but show a good level of protection at their rating.
Servicer-Related Risks Addressed: Fitch considers servicing
continuity risk reduced by the availability of replacement
servicers in the Dutch leasing market, low complexity of the
financial leases, clearly documented replacement provisions and an
adequately sized reserve that provides about three months of
interest coverage of the class A to E notes. Commingling risk is
addressed by the use of an insolvency-remote collection foundation
and by replacement provisions for the collection account bank
provider, in line with Fitch's criteria.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Ratings may be negatively affected if defaults and losses are
larger or if recoveries are smaller than expected. More
front-loaded defaults are most detrimental to the class A notes as
they quickly reduce available excess spread. Some examples of more
stressed default and recovery assumptions are below.
Expected impact on the notes' ratings of increased defaults (class
A/B/C/D/E)
Increase default rates by 10%:
'AA+sf'/'AAsf'/'A-sf'/'BBBsf'/'BB+sf'
Increase default rates by 25%:
'AA+sf'/'AA-sf'/'BBB+sf'/'BBB-sf'/'BB+sf'
Increase default rates by 50%:
'AAsf'/'A+sf'/'BBBsf'/'BB+sf'/'BBsf'
Expected impact on the notes' ratings of reduced recoveries (class
A/B/C/D/E)
Reduce recovery rates by 10%:
'AAAsf'/'AAsf'/'A-sf'/'BBBsf'/'BB+sf'
Reduce recovery rates by 25%:
'AA+sf'/'AA-sf'/'BBB+sf'/'BB+sf'/'BBsf'
Reduce recovery rates by 50%:
'AA+sf'/'A+sf'/'BBB-sf'/'BB-sf'/'Bsf'
Expected impact on the notes' ratings of increased defaults and
reduced recoveries (class A/B/C/D/E)
Increase default rates by 10% and reduce recovery rates by 10%:
'AA+sf'/'AAsf'/'BBB+sf'/'BBB-sf'/'BB+sf'
Increase default rates by 25% and reduce recovery rates by 25%:
'AAsf'/'A+sf'/'BBB-sf'/'BBsf'/'B+sf'
Increase default rates by 50% and reduce recovery rates by 50%:
'Asf'/'BBB+sf'/'BB-sf'/'CCCsf'/'NRsf'
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Ratings may be positively affected if the actual defaults are lower
and losses smaller than assumed, or if growth prospects for the
Dutch economy keep improving due to reduced inflationary pressures
and a healthy labour market. Some examples of less stressed default
and recovery assumptions are below.
Expected impact on the notes' ratings of reduced defaults (class
A/B/C/D/E)
Reduce default rates by 10%:
'AAAsf'/'AA+sf'/'Asf'/'BBB+sf'/'BBBsf'
Reduce default rates by 25%:
'AAAsf'/'AAAsf'/'A+sf'/'A-sf'/'BBB+sf'
Reduce default rates by 50%: 'AAAsf'/'AAAsf'/'AA+sf'/'A+sf'/'A+sf'
Expected impact on the notes' ratings of increased recoveries
(class A/B/C/D/E)
Increase recovery rates by 10%:
'AAAsf'/'AA+sf'/'Asf'/'BBB+sf'/'BBBsf'
Increase recovery rates by 25%:
'AAAsf'/'AA+sf'/'A+sf'/'Asf'/'A-sf'
Increase recovery rates by 50%:
'AAAsf'/'AAAsf'/'AA+sf'/'A+sf'/'A+sf'
Expected impact on the notes' ratings of reduced defaults and
increased recoveries (class A/B/C/D/E)
Reduce default rates by 10% and increase recovery rates by 10%:
'AAAsf'/'AA+sf'/'A+sf'/'A-sf'/'BBB+sf'
Reduce default rates by 25% and increase recovery rates by 25%:
'AAAsf'/'AAAsf'/'AAsf'/'A+sf'/'Asf'
Reduce default rates by 50% and increase recovery rates by 50%:
'AAAsf'/'AAAsf'/'AAAsf'/'AA+sf'/'AA+sf'
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 rating
agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
===========
S E R B I A
===========
TELEKOM SRBIJA: S&P Rates New EUR1.95BB Sr. Unsecured Notes 'BB-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue rating to the proposed
EUR1.95 billion senior unsecured notes to be issued by Telekom
Srbija a.d. Beograd (BB-/Stable/--).
S&P understands Telekom Srbija will use the proceeds of the
issuance to refinance certain existing debt instruments and pay
related fees. Hence the transaction is credit neutral and will
enable Telekom Srbija to preemptively manage its maturity profile.
S&P's 'BB-' issuer credit rating on Telekom Srbija is therefore
unchanged by the proposed refinancing transaction.
Telekom Srbija's debt is mostly senior unsecured and primarily
issued at parent level. The new notes will rank at the same
seniority as the outstanding senior unsecured debt, also issued by
Telecom Srbija a.d. Beograd and rated 'BB-' in line with the issuer
credit rating, as no significant elements of subordination risk are
present in the capital structure.
===========
S W E D E N
===========
AINAVDA PARENTCO: S&P Alters Outlook to Negative, Affirms 'B' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on IT services provider
Ainavda Parentco AB (Advania) and Ainavda Bidco to negative from
stable and affirmed its 'B' long-term issuer credit rating on the
two entities, as well as its 'B' issue rating and '3' recovery
rating on the group's senior secured term loans.
The negative outlook indicates that S&P could lower the ratings if
it no longer thinks the company's operating performance will
improve in line with our expectations for 2026 and beyond,
resulting in adjusted debt to EBITDA staying above 7x, FOCF to debt
not improving to near 3%, or EBITDA cash interest coverage staying
below 2.0x.
Results for IT services provider Ainavda Parentco AB (Advania),
parent company of Ainavda Bidco AB, for 2025 were below what S&P
had expected, on significantly higher-than-expected nonrecurring
costs and slow organic growth.
As a result, credit ratios for 2025 were weaker than our previous
base-case forecast and beyond what we think is commensurate with
the rating.
S&P said, "Although we expect a rebound in adjusted leverage to
below 7x by 2026, this will be offset by free operating cash flow
that is only close to break-even and EBITDA interest coverage below
2x. Furthermore, we think this hinges on the company's ability to
generate organic growth, after two consecutive years of flat
organic growth, and materially reduce nonrecurring costs."
"Advania's organic revenue growth has been broadly flat for two
consecutive years. Total 2025 revenue increased 22% to Swedish
krona (SEK) 18.4 billion (about EUR1.7 billion), below our prior
expectation of SEK19.8 billion (31%). This shortfall followed
revenue declines in the company's U.K. and Ireland (UK&I) and
Iceland markets, coupled with slow organic growth in Sweden and
Norway. Factors in the underperformance include a
slower-than-anticipated recovery in the value-added resale (VAR;
54% of revenue) segment, combined with subdued performance in
managed services (MS; 33%) in the U.K. and a challenging
professional services (PS; 13%) market characterized by pricing
pressure and intense competition. This marks the second consecutive
year where Advania's organic revenue growth has been broadly flat,
and we have yet to see a track record of sustainably solid organic
growth following recent acquisitions. Still, adjusted for foreign
currency movements, organic growth in 2025 would have been about
2%. We expect organic revenue growth to accelerate, supported by a
strong start to the year for MS with a healthy pipeline of deals, a
rebound in the VAR segment from robust demand for high-performance
computing hardware, and full-year contributions from 2025 bolt-on
acquisitions."
Advania has grown rapidly through acquisitions since 2021,
completing four transformational and 16 bolt-on acquisitions--most
recently in 2025 Gompute (a Swedish high-performance computing and
AI infrastructure platform) and Smartvokat GmbH (a German
consultancy specializing in digital transformation for the legal,
risk, and compliance sectors). As a result, Advania's revenue has
increased about 3x since 2021. The 2024 acquisition of U.K.-based
value-added reseller CCS Media strengthened the company's position
in the U.K., establishing it as the 10th-largest IT services
provider with increased scale, a broader service offering, and
enhanced vendor partnerships. The U.K. represents Advania's largest
market opportunity, with an addressable IT services market
approximately twice the size of all its other markets combined.
S&P said, "Following elevated nonrecurring costs in 2024 and 2025,
partly due to higher-than-expected restructuring costs related to
the acquisition of CCS Media in 2024, we now expect these costs to
decrease. Nonrecurring expense in 2025 were largely attributable to
operations in Sweden (new system implementations partly related to
the harmonization of enterprise resource planning among recently
acquired companies and restructuring layoffs) and the U.K., where
the integration of CCS Media became more expensive than anticipated
owing to restructuring and management changes. Total nonrecurring
expense in 2025 amounted to about SEK510 million, which was broadly
consistent with 2024 levels and significantly higher than the
SEK130 million we had expected. For 2026 and beyond, we expect
nonrecurring costs of SEK200 million-SEK220 million. mainly
supported by integrations and restructuring at CCS Media being
completed as well only smaller bolt-on acquisitions in 2025,
limiting the need for further restructuring.
"We expect leverage to gradually fall to just below 7.0x in 2026,
but improvement is contingent on healthy top-line growth and a
decrease in nonrecurring costs. We view the expected leverage as
commensurate with the rating, absent any additional large
debt-financed acquisitions or shareholder distributions, which we
do not foresee in the next few years. The slow organic revenue
growth and high nonrecurring costs in 2025 resulted in S&P Global
Ratings-adjusted leverage at 8.9x, significantly higher than our
prior expectation of 6.4x. Our projected deleveraging in 2026 will
be supported by EBITDA growth from reduced nonrecurring costs and
top-line growth. Despite a EUR50 million add-on to its Euro term
loan B (TLB) in conjunction with the company's repricing in
February 2025, adjusted debt decreased by approximately SEK90
million in 2025 due to favorable exchange rates.
"Advania generates modest profitability and cash flow. Advania's
EBITDA margin of about 8% in 2025 is lower than global IT companies
like IBM, Capgemini SE, and Accenture PLC, which generate higher
margins on average (15%-30%). Advania focuses on the midmarket
segment (companies of 500-3,000 employees) in Northern Europe and
faces limited competition from these large IT players. However, due
to its scale and the high exceptional costs in recent years, its
profitability is below the average for peers. Furthermore, we think
the large portion of revenue from the VAR segment (reseller of
hardware and software products), and exposure to the public sector
(about half of total revenue) dilute the overall margin.
Nevertheless, we expect exceptional costs will decrease in 2026 and
beyond, so profitability should increase gradually and approach 10%
from 2026. FOCF turned positive in 2025, partly supported by a
large change in working capital inflow and the company's
asset-light model, and we expect it will remain positive, albeit
lower, in 2026, following a larger reverse of outflows from change
in working capital, before approaching 5% in 2027.
"The negative outlook reflects that we could lower our ratings on
Advania if we no longer expect its operating performance to improve
in 2026, in line with our base case, as this would result in the
company's cash flow, leverage, or interest coverage ratios
remaining outside our downside thresholds in 2026.
"We could lower the rating if adjusted leverage remains above 7.0x,
FOCF to debt fails to show a path to remain sustainably at 2%-3%,
or EBITDA cash interest coverage is below 2.0x. This could occur if
Advania's exceptional costs remain elevated, if operational or
competitive pressure impede its organic revenue growth, or in case
of additional large debt-funded acquisitions.
"We could revise the outlook to stable if adjusted leverage
improves to less than 7.0x, FOCF to debt is positive in 2026 and
exceeds 2% in 2027, and interest coverage increases to above 2.0x."
ASSEMBLIN CAVERION: Moody's Ups CFR & Senior Secured Notes to B1
----------------------------------------------------------------
Moody's Ratings upgraded Assemblin Caverion Group AB's (Assemblin
Caverion, the company or the group) corporate family rating to B1
from B2 and its probability of default rating to B1-PD from B2-PD.
Concurrently, Moody's upgraded the existing senior secured notes
ratings to B1 from B2. The outlook remains stable.
"The ratings upgrade reflects the better-than-expected improvement
in the company's credit metrics following the successful execution
of the business combination of Assemblin with Caverion. Moody's
expects the company's Moody's adjusted debt/EBITDA to remain at
around 4.0x which is consistent with a B1 rating level" says Pilar
Anduiza, a Moody's Ratings AVP-Analyst and lead analyst for
Assemblin Caverion.
RATINGS RATIONALE
The ratings upgrade reflects the successful execution of the
business combination of Assemblin with Caverion which has led to a
better-than-expected margin growth leading to a significant
improvement in the company's credit metrics and an improved
business profile of the combined firm.
The combination also strengthened the group's competitive
positioning as it made Assemblin Caverion the largest technical
installation and service company in the Nordics, with a combined
SEK41 billion revenues in 2025 and an order backlog of SEK31
billion. The company has also shifted to a higher service focus and
has improved its EBITA margins significantly through the
realization of synergies and closure of non-profitable businesses.
The company's Moody's adjusted EBITA margin reached 7.7% in 2025
and Moody's expects it to remain close to 8% over the next 12-18
months. expect also expects the company to return to topline growth
in 2026 following a year of muted growth in 2025.
Assemblin Caverion's credit metrics have improved more than expect
initially anticipated, reaching levels commensurate with a B1
rating level. Moody's expects Moody's-adjusted debt/EBITDA to
remain stable below 4.5x, at around 4.0x over the next 12-18
months. Moody's also expects free cash flow to debt around 9% for
2026 and 2027. EBITA/interest will also remain close to 3.0x, well
above the 2.5x threshold for an upgrade in the next 12-18 months.
Assemblin Caverion's B1 rating continues to reflect the company's
leadership position in the installation and service market in the
Nordics, with a relatively flexible cost structure; its high
exposure to the service and renovation sector, which have displayed
relatively higher resilience compared to the construction sector; a
strong track record of margin expansion and the successful
integration of Assemblin and Caverion, which creates further margin
expansion opportunities; and continued positive free cash flow
(FCF).
However, the ratings are constrained by weak sales evolution as a
result of weak demand, particularly for residential new build
projects in the Nordics, exposure to the overall health of the
cyclical construction industry and event risks related to
debt-funded acquisitions or shareholder distributions associated
with its private equity ownership.
RATIONALE FOR THE OUTLOOK
The stable outlook reflects Moody's expectations that the company
will operate within the financial metrics requirements for the B1
rating category over the next 12-18 months while keeping a prudent
financial policy and a good liquidity profile.
Moody's stable outlook does not incorporate any material
debt-funded acquisitions or shareholder distributions.
LIQUIDITY PROFILE
Assemblin Caverion's liquidity is good. The company benefits from a
long-dated maturity profile with maturities in 2030 and 2031. As of
2025, the company had SEK 2.6 billion of cash and cash equivalents.
Moody's estimates the company will generate approximately SEK 1.5
billion of FCF annually and has access to SEK 2.8 billion revolving
credit facility (RCF).
These sources are sufficient to cover intra-year working capital
swings, with a build-up during the second and third quarters, and a
subsequent release in the fourth quarter and the first quarter of
the next year. The RCF contains a springing net leverage financial
covenant tested only when the facility is more than 40% drawn.
STRUCTURAL CONSIDERATIONS
Assemblin Caverion's capital structure consists of EUR780 million
senior secured floating rate notes due in 2031, EUR500 million
senior secured fixed notes due 2030 and a SEK2.9 billion super
senior secured revolving credit and guarantee facility due 2029.
The fixed and floating senior secured notes rank pari passu. The
security consists of guarantees of subsidiaries representing 77.5%
of the combined EBITDA of Assemblin and Caverion. The notes share
the same security package as the super senior RCF, consisting of
pledges over the capital stock, intercompany loans and operating
bank accounts, which Moody's considers as weak. However, the notes
rank junior to the super senior RCF upon enforcement. While the B1
rating on notes is in line with the CFR, a further increase in the
relative size of the super senior RCF could result in downward
notching of the notes relative to the CFR.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company delivers strong and
sustained earnings growth that translates into a durable
improvement in credit metrics. This would include Moody's adjusted
debt/EBITDA remaining sustainably well below 4.0x while the company
maintains a prudent financial policy consistent with a higher
rating category. Additional support for an upgrade would come from
Moody's adjusted free cash flow to debt remaining at least in the
high single digit range, alongside good liquidity.
Conversely, the ratings could be downgraded if credit metrics
weaken on a sustained basis. This could occur if Moody's adjusted
debt/EBITDA rises sustainably above 5.0x, or if Moody's adjusted
EBITA/interest coverage falls sustainably below 2.5x. Downward
rating pressure could also result from a sustained decline in free
cash flow to debt toward the mid- to low-single-digit range or from
a deterioration in the company's liquidity position.
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
Assemblin Caverion Group AB is the largest installation company in
the Nordics, with installation services in electrical, heating and
sanitation, and ventilation and associated services. The company
generated revenue of SEK41 billion in 2025, out of which 41% was
generated by the project business and 59% by the service business.
The company is 100% owned by private equity firm Triton.
===========================
U N I T E D K I N G D O M
===========================
ACACIUM GROUP: S&P Lowers ICR to 'CCC' on Elevated Default Risk
---------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
U.K.-based health care and life sciences staffing and services
provider Acacium Group Ltd. and its issue rating on the group's
senior secured debt to 'CCC' from 'B-'. S&P's '3' recovery rating
on the senior secured debt remains unchanged, indicating its
expectation of meaningful recovery of about 50% in a simulated
default scenario.
The negative outlook reflects increased likelihood of a default,
including a distressed exchange or debt restructuring, over the
next 12 months, due to tightening liquidity from persistent free
cash flow deficits and unsustainably high leverage.
S&P said, "Acacium Group Ltd. has underperformed our 2025
forecasts, primarily due to softer trading in health care staffing
divisions and higher-than-expected exceptional costs, resulting in
our adjusted leverage of about 22x and materially negative adjusted
free operating cash flow (FOCF) for 2025.
"We expect these operating headwinds will somewhat abate in 2026,
but we anticipate that the company's operating performance will be
insufficient to support meaningful deleveraging and that liquidity
will weaken, which means in our view that Acacium's capital
structure is unsustainable with adjusted leverage of 11x-14x in
2026-2027. We also see mounting refinancing risk considering these
expectations and that Acacium is facing term loan B (TLB) maturity
in June 2028, which is currently trading at deeply distressed
prices.
S&P said, "Acacium underperformed our forecasts for 2025, and
recovery from 2026 remains highly uncertain. Acacium reported S&P
Global Ratings-adjusted EBITDA of GBP23 million in 2025 (adjusted
EBITDA margin of 3.2%) compared with our previous forecasts of
GBP40 million (EBITDA margin of 5.5%), resulting in our adjusted
leverage of about 22x. While the life sciences and Xyla businesses
demonstrated some early signs of stabilization, this was more than
offset by materially softer trading in the principal health care
staffing divisions in the U.K. and Ireland, the U.S., and
Australia, as well as higher-than-expected exceptional costs of
about GBP9 million.
"We have revised our business risk profile to vulnerable from weak.
Acacium's EBITDA has declined significantly from historical levels,
falling to GBP62 million in 2024 and GBP124 million in 2023 after a
COVID-related spike to GBP232 million in 2022. While Acacium is one
of the leading global health care staffing providers, revenue
generation remains highly dependent on England's National Health
Service (NHS), which is facing challenges from rising demand and
cost pressures. Furthermore, uncertainty around public health care
funding in the U.K. limits visibility into future revenue. The NHS
has shifted its approach to addressing staff shortages by
developing its own independent staff banks, reducing reliance on
third-party agencies like Acacium. Nevertheless, persistent
shortages, increasing wait lists, and the possibility of increased
funding, particularly for certain staff categories, mean the NHS is
expected to continue supporting some level of recovery for agencies
like Acacium, leading to modest recovery in revenue and EBITDA in
2026 and 2027. In addition, customers are removing competitor
agencies due to umbrella legislation changes, creating
opportunities for managed service provider implementation for
Acacium.
"We now assess Acacium's capital structure as unsustainable due to
its very weak credit metrics and limited prospects for meaningful
deleveraging. While we forecast EBITDA margin growth in 2026, we
expect its S&P Global Ratings-adjusted leverage to remain high
(about 11x-14x in 2026-2027). We expect S&P adjusted FOCF to be
negative GBP4 million-GBP6 million in 2026 and negative GBP8
million-GBP10 million in 2027.
"This leaves the company in a vulnerable position with the capital
markets, as its debt matures in 2028, and it continues to trade at
distressed prices in secondary markets. Without more meaningful
revenue and earnings growth and a substantial improvement in
cash-flow generation beyond what we forecast, we anticipate
significant challenges in refinancing its debt, potentially leading
to a distressed debt exchange or restructuring, in line with a
default under our criteria."
In recent years, Acacium has implemented several levers to preserve
cash in difficult times. These include partly scaling back on
capital expenditure (capex), realizing corporation tax benefits,
actively reviewing the cost base, and maintaining discipline in
working capital management. The company's working-capital cycle has
benefited from factoring facilities (both recourse and nonrecourse)
that have allowed Acacium to sell up to GBP30 million of
receivables and which are currently largely used. The factoring
facility expires in March 2027 and could result in meaningful
working-capital cash outflows if the facility isn't extended.
Acacium ended 2025 with GBP9 million of cash and an undrawn GBP45
million revolving credit facility (RCF). S&P notes that there is a
one-time benefit to 2026 cash flow, because switching interest
payments from monthly to semi-annual will result in a lower cash
interest outflow of GBP28 million in 2026 since only one payment
will take place in July 2026 and the following one in January 2027.
However, this normalizes from 2027, with the company paying
approximately GBP44 million in cash interest annually.
The negative outlook reflects increased likelihood of a default,
including a distressed exchange or debt restructuring, over the
next 12 months, due to tightening liquidity from persistent free
cash flow deficits and unsustainably high leverage.
S&P could lower the rating if:
-- S&P believes a default, distressed exchange, or liquidity
shortfall is inevitable within the next six months; or
-- If Acacium announces it will miss an interest or principal
payment or undertake a distressed exchange or debt restructuring.
S&P could raise its rating on Acacium if the company improves
liquidity such that covenant headroom improves and it no longer
envisions a default scenario occurring within the next 12 months.
CD&R AND WSH: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed CD&R and WSH Limited's (WSH) Long-Term
Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch
has also affirmed WSH Services Holding Limited's GBP350 million and
EUR505 million senior secured term loans B (TLB) at 'B+' with a
Recovery Rating of 'RR4'.
The IDR reflects WSH's moderate scale and limited geographical
diversification relative to peers. This is balanced by the group's
robust business model and strong EBITDA and free cash flow (FCF)
margins. The Stable Outlook reflects the group's ability to sustain
profitable growth, supporting adequate to mildly improving credit
metrics, including an anticipated reduction in its temporarily high
leverage at 5.8x at end-2025.
Key Rating Drivers
Temporarily Exhausted Leverage Headroom: Fitch continues to expect
WSH to deleverage to within its 'B+' rating thresholds by 2027,
after exhausting its leverage headroom by the debt-funded dividend
recapitalisation in 2025. Strong earnings growth and cash
conversion should help rebuild its headroom, with EBITDA leverage
easing to about 5.6x in 2026. Stronger-than-expected 2025
performance resulted in EBITDA leverage of 5.8x at end-2025,
slightly below Fitch's projected 6.0x leverage.
Fitch assesses the execution risk associated with deleveraging as
limited, even though Fitch views the dividend recapitalisation as
aggressive. Fitch believes WSH's intrinsically highly profitable
and cash-generative operations will allow it to restore leverage
headroom quickly, as reflected in the Stable Outlook. However,
further shareholder-friendly actions may signal a higher risk
tolerance and could put pressure on the ratings.
Positive FCF Generation: Fitch projects sustained positive FCF
generation over 2026-2028, strengthening the group's liquidity and
strongly supporting the rating. This is underpinned by profitable
EBITDA expansion, low capex intensity and structurally negative
trade working capital. In 2026, FCF will be supported by the
working-capital inflow reversing the outflow caused by an
additional payroll cycle in 2025. Fitch estimates that the cash
build-up will likely be reinvested in small bolt-on acquisitions,
given the highly fragmented industry and the benefits of scale.
Niche Scale but Robust Operations: Moderate scale is a rating
constraint, with EBITDA expected to remain below its positive
sensitivity by end-2028 and with geographic concentration in the
UK. This is mitigated by WSH's robust operations stemming from its
more bespoke and decentralised approach than larger international
peers', as well as flexibility in its contract structure that
allows it to pass through costs. This enables the group to achieve
strong profitability despite its smaller scale. WSH's consistently
strong organic sales growth over the past 15 years also suggest a
growing share in its core UK market.
Organic Sales Growth: Fitch expects continued organic sales growth,
supported by strong retention of existing contracts, new business
wins and effective cost pass-through. Diversification of WSH's
business helps offset softness in individual segments, for example,
in catering to private schools, following the implementation of VAT
on private school fees and reduction in pupil numbers. WSH is also
expanding its European operations to unlock synergies and support
growth.
Cost Pass-Through Supports Profitability: Fitch expects broadly
stable profit margins over the rating horizon, as WSH has shown its
ability to effectively pass through or manage cost increases
effectively. In a weaker consumer environment, this could lead to
mild margin pressure as WSH seeks to continue offering value to
customers. Fitch projects EBITDA to increase in 2026 and beyond,
driven by growth in the UK and Europe. This is underpinned by
strong full-year 2025 results, which exceeded both the group's and
Fitch's projections. Some limited execution risk remains around
planned cost-reduction initiatives.
Weak Interest Coverage: Fitch projects EBITDA interest cover to
remain slightly above 2.0x in 2026 before improving towards 2.5x in
2028, which is weak relative to Fitch-rated non-investment-grade
business services issuers. WSH's low coverage is mitigated by its
cash-generative business model.
Supporting Sector Fundamentals: WSH is adequately positioned to
capitalise on favourable sector fundamentals, as it is one of the
well-established UK contract caterers with growing operations in
Europe. These fundamentals include continued outsourcing,
differentiation through premium and specialised services and
technology-enabled operating efficiencies that help offset
pressures from cost inflation and staffing challenges.
Peer Analysis
WSH's closest peer is contract catering and diversified services
provider Elior Group S.A. (BB-/Stable), which has same Standalone
Credit Profile (SCP) of 'b+'. However, Elior's IDR benefits from a
one-notch uplift from the SCP due to its links with a stronger
parent, Derichebourg S.A. (BB+/Stable). Elior has greater scale,
wider geographic diversification and a broader service range than
WSH. However, WSH benefits from stronger profitability, better FCF
generation and higher organic growth. The recent upward revision of
Elior's SCP reflects pricing discipline and cost-reduction efforts,
which support profit growth and deleveraging. Following WSH's
dividend recapilatisation in 2025, Fitch forecasts similar leverage
for both in FY26 (Elior: 5.4x; WSH: 5.6x), and Elior is focused on
further deleveraging to below 5.0x, in line with its stated
financial policy.
WSH also shares similarities with casual dining operators through
its concession and hospitality segment. WSH is rated three notches
above Wheel Bidco Limited (CCC+), a UK pizza restaurant operator.
WSH's higher rating reflects the greater resilience of its business
to inflationary pressures and weaker consumer sentiment, stronger
revenue visibility with limited execution risk and sustained
positive FCF generation, supported in part by its capex-light model
compared with the more capex-intensive casual dining sector (about
5% capex/sales).
Fitch’s Key Rating-Case Assumptions
- Mid-single-digit organic revenue growth in 2026-2028
- High-single digit EBITDA margins between 2026 and 2028
- Cash inflow under working capital in 2026, reversing working
capital outflow from additional payroll in 2025; followed by
slightly positive working capital inflows in 2027-2028
- Capex of 2% of revenue in 2026-2028
- No debt-funded M&A
- No dividend payments
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, Lower), Sector Characteristics (bbb,
Lower), Market and Competitive Positioning (b+, Higher),
Diversification and Asset Quality (b+, Moderate), Company
Operational Characteristics (bbb, Moderate), Profitability (bb-,
Moderate), Financial Structure (b, Higher), and Financial
Flexibility (b, Moderate).
- The quantitative financial subfactors are based on custom CRT
financial period parameters: 20% weight for the forecast year 2025,
40% for the forecast year 2026 and 40% for the forecast year 2027.
- Assessments of the quantitative financial subfactors also include
bespoke calculations.
- B+ to CC considerations apply in its analysis and result in no
adjustment.
- The Governance assessment of 'Good' results in no adjustment.
- The Operating Environment assessment of 'aa-' results in no
adjustment.
- The SCP is 'b+'.
Recovery Analysis
The recovery analysis assumes that WSH would be reorganised as a
going concern (GC) in bankruptcy rather than liquidated.
Its analysis applies a discount of about 40% to Fitch-adjusted 2025
EBITDA to derive distressed GC EBITDA, at which WSH's leverage
would become untenable, endangering the sustainability of its
business model. Fitch applies a 5.0x distressed enterprise
value/EBITDA multiple, reflecting the underlying value of WSH's
defensible market share in the education segment and its exposure
to many blue-chip corporates.
Fitch assumes WSH's first-lien secured GBP120 million revolving
credit facility (RCF) is fully drawn and that its first-lien
secured acquisition and capex facility of GBP80 million is half
drawn in a restructuring. Fitch also assumes that minor debt at
operating companies of about GBP6 million, including GBP5.4 million
of deferred consideration for an acquisition, ranks ahead of the
first-lien secured debt.
Its principal waterfall analysis, after deducting 10% for
administrative claims, generates a ranked recovery in the 'RR4'
band for the senior secured creditors, resulting in a debt rating
of 'B+' for the first-lien secured debt, in line with the IDR.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, lead to Negative
Rating Action/Downgrade
- Inability to achieve consistent EBITDA growth due to weakened
ability to pass through cost increases, sharply slower sales growth
in the UK or unsuccessful expansion in continental Europe
- EBITDA leverage above 5.5x on a sustained basis
- EBITDA interest coverage below 2.2x on a sustained basis
- FCF deteriorating towards neutral
Factors that Could, Individually or Collectively, lead to Positive
Rating Action/Upgrade
- Continued growth in the UK and successful expansion to
continental Europe, leading to a major improvement in earnings
diversification and profitability, with EBITDA increasing above
GBP200 million, in combination with the following
- Maintenance of high revenue visibility and strong market position
in the UK
- EBITDA leverage below 4.5x on a sustained basis, supported by a
consistent financial policy
- EBITDA interest coverage above 3x on a sustained basis
- Mid-single-digit FCF margins
Liquidity and Debt Structure
WSH had good available liquidity at end-2025, comprising GBP77
million cash, an undrawn GBP120 million RCF and GBP80 million
acquisition and capex facility.
Positive FCF generation should sustain comfortable liquidity
headroom and build cash over the rating horizon, which is likely to
be used for bolt-on acquisitions. Fitch projects WSH's cash balance
to improve in 2026, also from cash inflow under working capital, as
the negative impact in 2025 reverses.
The first-lien RCF and first-lien TLB mature in 2030 and 2031,
respectively.
Issuer Profile
WSH is the parent company for leading brands operating in the food
services and hospitality sectors.
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 WSH.
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
----------- ------ -------- -----
CD&R and WSH
Limited LT IDR B+ Affirmed B+
WSH Services
Holding Limited
senior secured LT B+ Affirmed RR4 B+
CHELWOOD HOUSE: FRP Advisory, BTG Named as Joint Administrators
---------------------------------------------------------------
Chelwood House (GS) Limited was placed into administration in the
High Court of Justice, Business and Property Courts of England and
Wales Court Number CR-2026-002006. David Paul Hudson and Simon
Baggs of FRP Advisory Trading Limited, with Paul Steven Cooper of
BTG Begbies Traynor (London) LLP, were appointed as joint
administrators on March 13, 2026.
Chelwood House (GS) Limited carried on a business of buying and
selling of own real estate.
Its registered office is at 134 Buckingham Palace Road, London,
SW1W 9SA (in the process of being changed to FRP Advisory, 1st
Floor, 34 Falcon Court, Preston Farm Business Park, Stockton on
Tees, TS18 3TX).
Its principal trading address is 134 Buckingham Palace Road,
London, SW1W 9SA.
The Joint Administrators can be contacted at:
David Paul Hudson
Simon Baggs
FRP Advisory Trading Limited
2nd Floor, 110 Cannon Street
London
EC4N 6EU
-- and --
Paul Steven Cooper
BTG Begbies Traynor (London) LLP
31st Floor, 40 Bank Street
Canary Wharf
London
E14 5NR
Further details contact:
The Joint Administrators
Tel: 01642 917555
Alternative contact: Robyn Coulter
Email: cp.teesside@frpadvisory.com
DIAMOND MANUFACTURERS: May 12 Hearing Set in Bankr. Bid v. Vashi
----------------------------------------------------------------
A Bankruptcy Petition was presented on March 12, 2026 against VASHI
NANWANI DOMINGUEZ formerly of 49a Gower Street, London, WC1E 6HH by
(1) Diamond Manufacturers Ltd (in liquidation) and (2) Benjamin
Dymant and David Philip Soden (as Joint Liquidators of Diamond
Manufacturers Limited).
An adjourned hearing of the Bankruptcy Petition is listed for May
12, 2026 at 10:30 a.m. or as soon thereafter. This hearing will
take place at 7 Rolls Building, Fetter Lane, London EC4A 1NL.
If Mr. Dominguez fails to attend the hearing, the Court may order
that he is made bankrupt. Mr. Dominguez should immediately contact
James.Hillman@pinsentmasons.com and Jenny.Scott@pinsentmasons.com
to obtain a copy of the Bankruptcy Petition.
Diamond Manufacturers Ltd, the trading company of Vashi, was
incorporated in the UK in October 2007. Its two shareholders were
Vashi Dominguez and his wife, Tammy Litchfield. The company was
founded to sell direct-to-consumer jewellery, including ethically
sourced diamonds. Unfortunate investors in the luxury jewellery
brand faced heavy losses when the trading company was put into
liquidation in April 2023 following a petition from the landlord of
its Canary Wharf store in December 2022, according to an article by
Edmonds, Marshall, McMahon. Since then, details have emerged of a
large-scale fraud that conned sophisticated investors out of tens
of millions of pounds.
DUNCAN HOUSE: FRP Advisory, BTG Appointed as Joint Administrators
-----------------------------------------------------------------
Duncan House (PP) Limited was placed into administration in the
High Court of Justice, Business and Property Courts of England and
Wales Court Number CR-2026-002002. David Hudson and Simon Baggs of
FRP Advisory Trading Limited, and Paul Steven Cooper of BTG Begbies
Traynor (London) LLP, were appointed as joint administrators on
March 13, 2026.
Duncan House (PP) Limited carried on a business of buying and
selling of own real estate.
Its registered office is at 134 Buckingham Palace Road, London,
SW1W 9SA (to be changed to FRP Advisory, 1st Floor, 34 Falcon
Court, Preston Farm Business Park, Stockton on Tees, TS18 3TX).
Its principal trading address is 134 Buckingham Palace Road,
London, SW1W 9SA.
The Joint Administrators can be contacted at:
David Hudson
Simon Baggs
FRP Advisory Trading Limited
110 Cannon Street
London
EC4N 6EU
-- and --
Paul Steven Cooper
BTG Begbies Traynor (London) LLP
31st Floor, 40 Bank Street
Canary Wharf
London
E14 5NR
Further details contact:
The Joint Administrators
Tel: 01642 917555
Alternative contact: Robyn Coulter
Email: cp.teesside@frpadvisory.com
GLENTWORTH STREET: FRP Advisory, BTG Named as Joint Administrators
------------------------------------------------------------------
Glentworth Street (DH) Limited was placed into administration in
the High Court of Justice, Business and Property Courts of England
and Wales, Insolvency & Companies List (ChD) Court Number
CR-2026-002028. David Paul Hudson and Simon Baggs of FRP Advisory
Trading Limited, with Paul Steven Cooper of BTG Begbies Traynor
(Central) LLP, were appointed as joint administrators on March 13,
2026.
Glentworth Street (DH) Limited carried on a business of buying and
selling of own real estate.
Its registered office is at 134 Buckingham Palace Road, London,
England, SW1W 9SA (to be changed to FRP Advisory, 1st Floor, 34
Falcon Court, Preston Farm Business Park, Stockton on Tees, TS18
3TX).
Its principal trading address is 134 Buckingham Palace Road,
London, England, SW1W 9SA.
The Joint Administrators can be contacted at:
David Paul Hudson
Simon Baggs
FRP Advisory Trading Limited
2nd Floor, 110 Cannon Street
London
EC4N 6EU
-- and --
Paul Steven Cooper
BTG Begbies Traynor (Central) LLP
40 Bank Street
Canary Wharf
London
E14 5NR
Further details contact:
The Joint Administrators
Tel: 01642 917555
Alternative contact: Anna Harrison
Email: cp.teeside@frpadvisory.com
HOLLEN STREET: FRP Advisory, BTG Appointed as Joint Administrators
------------------------------------------------------------------
Hollen Street (Flat 8) Limited was placed into administration in
the High Court of Justice, Business and Property Courts of England
& Wales Court Number CR-2026-002032. David Hudson and Simon Baggs
of FRP Advisory Trading Limited, with Paul Steven Cooper of BTG
Begbies Traynor (London) LLP, were appointed as joint
administrators on March 13, 2026.
Hollen Street (Flat 8) Limited carried on a business of buying and
selling of own real estate.
Its registered office is at 134 Buckingham Palace Road, London,
SW1W 9SA (to be changed to FRP Advisory, 1st Floor, 34 Falcon
Court, Preston Farm Business Park, Stockton on Tees, TS18 3TX).
Its principal trading address is 134 Buckingham Palace Road,
London, SW1W 9SA.
The Joint Administrators can be contacted at:
David Hudson
Simon Baggs
FRP Advisory Trading Limited
2nd Floor, 110 Cannon Street
London
EC4N 6EU
-- and --
Paul Steven Cooper
BTG Begbies Traynor (London) LLP
31st Floor, 40 Bank Street
Canary Wharf
London
E14 5NR
Further details contact:
The Joint Administrators
Tel: 01642 917555
Alternative contact: Robyn Coulter
Email: cp.teesside@frpadvisory.com
ONSLOW GARDENS: FRP Advisory, BTG Named as Joint Administrators
---------------------------------------------------------------
Onslow Gardens (SK) Limited was placed into administration in the
High Court of Justice, Business and Property Courts of England and
Wales Court Number CR-2026-002009. David Hudson and Simon Baggs of
FRP Advisory Trading Limited, together with Paul Steven Cooper of
BTG Begbies Traynor (London) LLP, were appointed as joint
administrators on March 13, 2026.
Onslow Gardens (SK) Limited carried on a business of buying and
selling of own real estate.
Its registered office is at 134 Buckingham Palace Road, London,
SW1W 9SA (to be changed to FRP Advisory, 1st Floor, 34 Falcon
Court, Preston Farm Business Park, Stockton on Tees, TS18 3TX).
Its principal trading address is 134 Buckingham Palace Road,
London, SW1W 9SA.
The Joint Administrators can be contacted at:
David Hudson
Simon Baggs
FRP Advisory Trading Limited
110 Cannon Street
London
EC4N 6EU
-- and --
Paul Steven Cooper
BTG Begbies Traynor (London) LLP
40 Bank Street
Canary Wharf
London
E14 5NR
Further details contact:
The Joint Administrators
Tel: 01642 917555
Alternative contact: Rahat Rahman
Email: cp.teesside@frpadvisory.com
TOGETHER ASSET 2026-1-CRE-6: Fitch Rates Class X Notes 'BB+(EXP)sf'
-------------------------------------------------------------------
Fitch Ratings has assigned Together Asset Backed Securitisation
2026-1-CRE-6 PLC's (TABS 2026-1-CRE-6) notes expected ratings.
The assignment of final ratings is conditional on the receipt of
documents conforming to the information reviewed.
Entity/Debt Rating
----------- ------
Together Asset Backed
Securitisation
2026-1 CRE-6 PLC
A Loan Notes LT AAA(EXP)sf Expected Rating
A XS3349864200 LT AAA(EXP)sf Expected Rating
B XS3349864622 LT AA(EXP)sf Expected Rating
C XS3349864895 LT A+(EXP)sf Expected Rating
X XS3349865199 LT BB+(EXP)sf Expected Rating
Z XS3349865272 LT NR(EXP)sf Expected Rating
Transaction Summary
TABS 2026-1-CRE-6 is a securitisation of 67.5% commercial
buy-to-let (BTL) and 32.5% commercial business-occupied (BO) or
partially BO loans backed by commercial property in the UK
originated by Together Commercial Finance Limited, a fully owned
subsidiary of Together Financial Services Limited (Together;
BB/Stable/B). The transaction includes recent origination up to
February 2026. This is the sixth commercial mortgage loan
transaction from Together and the first to be rated by Fitch.
KEY RATING DRIVERS
Granular Portfolio with Borrower Recourse: The portfolio contains
67.5% BTL and 32.5% BO or partially BO loans advanced to 2,056
borrowers and backed by 2,340 commercial properties with an average
loan balance of GBP264,000 and average property value of
GBP462,000. These small-balance loan products benefit from borrower
recourse and certain features similar to residential mortgage loan
products.
Fitch views the borrower incentives and cash flow profile of the
portfolio as comparable to those of granular loan receivables
portfolios, while being exposed to the UK commercial property
market. Fitch has therefore rated the transaction using a
combination of criteria that address the key rating assumptions
(see Criteria Variations below).
Performance, LTVs Drive Loss Assumptions: Default rates for the BO
sub-pool are derived based on Together's historical arrears and
default performance. The BO sub-pool can be compared to SME
financing, but its borrowers exhibit default risk characteristics
closer to those of consumer loans, as they are less complex than
standard SME borrowers. Fitch has set a base case default rate of
7.5% and a rating multiple of 6.0x, in line with its Consumer ABS
Rating Criteria.
Borrowers in the BTL sub-pool are viewed as real estate investment
companies. The weighted average (WA) current loan-to-value (LTV) is
about 56.5%. Default and recovery rates are based on the stressed
LTV approach set out in Appendix 11 of Fitch's Covered Bonds Rating
Criteria. The commercial market value declines used in this
analysis are also used to determine the recovery rates for the BO
sub-pool.
Rating Caps and Excess Spread: The pool pays a WA interest rate of
9.31% as of February 2026. About 73.6% of the loans pay a WA fixed
rate of 9.33% that revert to the Together Commercial Managed Rate
(TCMR) plus a contractual margin (predominantly 3.25%). The TCMR
was 8.39% in February 2026. This generates a significant amount of
excess spread, which, when combined with credit enhancement (CE),
provides each tranche with sufficient cushion to withstand Fitch's
asset and cash flow stresses at the assigned rating. The class C
notes are capped at 'A+sf' due to payment interruption risk, while
the class X excess spread notes are capped at 'BB+sf'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The transaction's performance may be affected by changes in market
conditions and the economic environment. Weakening economic
performance is strongly correlated with increasing levels of
delinquencies and defaults, which could reduce CE available to the
notes.
Additionally, unanticipated declines in recoveries could result in
lower net proceeds, which may make certain notes susceptible to
negative rating action depending on the extent of the decline in
recoveries. Fitch conducts sensitivity analyses by stressing both a
transaction's base-case foreclosure frequency (FF) and recovery
rate (RR) assumptions and examining the rating implications for all
classes of notes.
A 15% increase in the WAFF and a 15% decrease in the WARR indicate
downgrades of up to three notches for the class A and class C
notes, and up to four notches for the class B 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 CE and could
result in upgrades. Fitch has also tested an additional rating
sensitivity scenario by applying a 15% decrease in the FF and a 15%
increase in the RR. Under this scenario, the class B notes could be
upgraded by up to one notch. The class A, C and X notes are at
their maximum achievable ratings.
SUMMARY OF FINANCIAL ADJUSTMENTS
CRITERIA VARIATIONS
Fitch applied two criteria variations:
The transaction has been rated under the Global Structured Finance
(GFS) Rating Criteria. A transaction can be rated under the GSF
criteria without dedicated sector-specific or bespoke criteria
where all key rating drivers are addressed through a combination of
different SF sector-specific criteria, which can be combined into a
cohesive rating approach. For the derivation of the default rate
and RR assumptions, Fitch applied the approach outlined in Appendix
11 of the Covered Bonds Rating Criteria. This constitutes a
variation to the GSF Rating Criteria, which references only SF
sector-specific criteria
For the recovery assumptions of the BO sub-pool, Fitch applied a
criteria variation to the SME Balance Sheet Securitisation Rating
Criteria by applying the market value decline assumptions outlined
in Appendix 11 of the Covered Bonds Rating Criteria (Analysing
Commercial Real Estate Loans Securing Covered Bonds) instead of the
Commercial Property Collateral Haircuts in the SME Balance Sheet
Securitisation Rating Criteria.
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.
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.
===============
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 * * *