260601.mbx

260601.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, June 1, 2026, Vol. 27, No. 108 Headlines B E L G I U M AZELIS GROUP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable F R A N C E FORVIA SE: Fitch Alters Outlook on 'BB+' LongTerm IDR to Stable G E R M A N Y TECHEM HOLDING: S&P Assigns 'B+' LongTerm ICR, Outlook Stable I R E L A N D POLUS EU XXI: Fitch Assigns 'B-sf' Final Rating on Class F Notes L U X E M B O U R G VITA BIDCO: S&P Withdraws 'B+' LongTerm ICR on Debt Repayment N E T H E R L A N D S CENTRIENT HOLDING: S&P Downgrades ICR to 'B-', Outlook Stable R U S S I A GROSS INSURANCE: Fitch Affirms 'B+' Insurer Finc'l. Strength S W E D E N POLESTAR AUTOMOTIVE: Schedules Annual General Meeting for June 26 U K R A I N E INTERPIPE HOLDINGS: S&P Raises ICR to 'CCC+' on Repayment of Notes U N I T E D K I N G D O M ALDBROOK MORTGAGE 2026-1: Fitch Assigns B-sf Rating on Cl. X Notes BUCKINGHAM BUTCHER: Rushtons Insolvency Appointed as Administrator CO-OPERATIVE GROUP: S&P Rates New GBP350MM Senior Notes 'BB-' NORTH WEST PRECISION: Leonard Curtis Appointed as Administrators ROTHERMERE CONTINUATION: Fitch Lowers LongTerm IDR to 'BB' SKYSHIELD GROUP: S&P Assigns Preliminary 'B' ICR, Outlook Stable STAINLESS STEEL: RSM UK Appointed as Joint Administrators TEC RECRUITMENT GROUP: RSM UK Appointed as Administrators WORDUNITED LTD: FRP Advisory Appointed as Joint Administrators XL SCAFFOLDING: Opus Restructuring Appointed as Administrators ZENITH AVIATION: Nexus Corporate Appointed as Administrator - - - - - ============= B E L G I U M ============= AZELIS GROUP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Azelis Group NV's Long-Term Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook and Azelis Finance NV's senior unsecured rating at 'BB+'. The Recovery Rating is 'RR4'. Azelis's 'BB+' IDR reflects its position as a leading specialty chemical distributor with strong diversification of suppliers, customers and products, balanced against EBITDA net leverage sustained above 3x due to recurring acquisitions. It also captures the company's record of stable profit margins and structurally positive free cash flow (FCF), which supports the funding of bolt-on acquisitions. Fitch-adjusted EBITDA net leverage rose to 3.7x in 2025, above the negative leverage sensitivity of 3.5x, which if sustained, could lead to negative rating action. Its rating case projects EBITDA net leverage remaining broadly at this level in 2026 before declining to 3.3x in 2027 as Fitch expects Azelis to reduce M&A spending to prioritise deleveraging, supporting the Stable Outlook. Key Rating Drivers Higher Leverage on Organic Decline: Azelis's revenue declined organically in 2023-2025, contrasting with the resilient nature of the specialty chemical distribution market, compounded by adverse foreign-currency effects. This diverged from the particularly strong performance in 2021-2022. Consequently, EBITDA fell by 10% in 2025, despite acquisitions, and EBITDA net leverage rose to 3.7x in 2025 from 3.3x in 2024. Trading conditions remained weak in 1Q26, with revenue declining by 9% organically, although the company reported early signs of demand stabilising during the quarter. Uncertain Impact of Disruptions: Fitch believes that the disruptions to chemical trade flows and feedstock costs caused by the closure of the Strait of Hormuz are unlikely to result in the same profit uplift as that seen in 2021-2022, given much weaker underlying demand. Fitch forecasts higher prices will be offset by negative volume and mix effects, also reflecting uncertainty over the supply of certain products. Consequently, Fitch assumes a 3% organic sales decline in 2026, including FX effects, and a 4% year-on-year decrease in EBITDA. Over 2027-2030, Fitch forecasts revenue will return to low-single-digit organic growth as demand stabilises, but remain below the market's historical growth rates. FCF Underpins Deleveraging Capacity: Azelis has resilient EBITDA margins of 10%-11%, compared with capex of less than 1% of sales, owing to an asset-light business model. This results in strong FCF of about 5% on average in 2022-2025, which Fitch projects at about 4% in 2026-2030. In its view, this provides significant flexibility to deleverage, depending on the company's capital allocation priorities. Financial Discipline with Caveats: Fitch expects Azelis to reduce M&A spending relative to 2022-2025, when it spent a total EUR1.5 billion, due to its commitment to reduce net debt/EBITDA below 3x. Its reported leverage was 3.4x in 1Q26. Therefore, Fitch assumes acquisition spending will remain well below FCF in 2026-2028 as the company focuses on deleveraging. Azelis's stated dividend policy is to distribute 25%-35% of the prior year's net income. However, in 2026, a stable dividend was approved, despite lower earnings, suggesting some flexibility in applying this policy. Global Specialty Distributor: Azelis is the second-largest pure specialty chemical distributor by revenue, behind IMCD N.V. (BBB-/Stable), and the fourth-largest overall when considering the specialty segments of Brenntag SE and Windsor Holdings III, LLC (Univar Solutions; B+/Stable). Azelis's scale in a fragmented industry allows it to benefit from longstanding exclusivity contracts with suppliers and thousands of customers globally. Its scale, technical and formulation expertise, and geographical breadth provide competitive advantages over smaller peers in securing supply contracts with large chemical producers, and in achieving synergies with acquired businesses. Different Leverage Definitions: Fitch includes off-balance-sheet factoring and deferred payments on acquisitions in the calculation of financial debt, resulting in Fitch-calculated EBITDA net leverage of 3.7x for 2025, above the 3.3x reported by Azelis. These deferred payment liabilities represent postponed M&A-related cash outflows. Acquisitions also often include earnouts and put options, creating the risk of additional cash outflows, although these payments are typically linked to the outperformance of acquired companies. Peer Analysis Azelis's closest Fitch-rated peer is IMCD. Both companies are pure specialty chemical distributors with market-leading positions, share a similar growth strategy focused on FCF-funded bolt-on acquisitions and comparable diversification of suppliers and customers. Both maintain asset-light business models with minimal sustaining capex requirements. Azelis's FCF margin is stronger, but IMCD benefits from larger absolute EBITDA, and Fich forecasts it to maintain lower EBITDA net leverage, below 3x. Univar Solutions is the second-largest global chemical distributor behind Brenntag AG and is the largest North American chemical distributor in a fragmented industry. Univar Solutions' financial structure is weaker than peers and Fitch expect its EBITDA leverage to remain at 5.5x-6.5x through the forecast horizon, while Fitch forecasts Azelis' EBITDA leverage to remain below 4.5x. Fitch’s Key Rating-Case Assumptions - Organic revenue growth (including FX impact) of -3% in 2026, 1.5% in 2027, 2% thereafter - EBITDA margin (Fitch-calculated) of 10% in 2026-2030 - Capex at 0.4%-0.5% of revenue to 2029 - Annual M&A outflows (excluding deferred considerations payments) of EUR30 million in 2026, EUR100 million in 2027, EUR150 million in 2028, EUR200 million a year in 2029 and 2030 - Annual dividends of EUR50-70 million Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): Business and financial profile factors (assessment, relative importance): management ('bbb-', Moderate), sector characteristics ('bbb', Moderate), market and competitive positioning ('bb+', Moderate), diversification and asset quality ('bbb+', Moderate), company operational characteristics ('bbb', Moderate), profitability ('bbb-', Lower), financial structure ('bb', Higher), and financial flexibility ('bb+', Moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the historical year 2025, 20% for the forecast year 2026, 20% for the forecast year 2027, 20% for the forecast year 2028 and 20% for the forecast year 2029. The Governance assessment of 'good' has no impact. The Operating Environment assessment of 'a' has no impact. The SCP is 'bb+'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'BB+'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage at or above 3.5x on a sustained basis - FCF margin below 2.5% for an extended period - Capital allocation prioritising acquisitions and growth over prudent leverage management Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA net leverage below 2.5x on a sustained basis - FCF margin consistently above 5% - Conservative execution of the company's financial policy Liquidity and Debt Structure At end-2025, Azelis's liquidity was EUR713 million, comprising EUR263 million in cash and an undrawn EUR450 million revolving credit facility maturing in 2029. Its short-term debt of EUR230 million is related to factoring facilities and deferred acquisition-related consideration payments due within 12 months, which are recurring in nature and comfortably covered by available liquidity and FCF generation. This liquidity position supplements FCF to support the company's capital allocation through 2028. In February 2026, Azelis issued EUR400 million of new notes due 2031 with a coupon of 4.125% to refinance the EUR400 million 5.75% notes due March 2028, eliminating near-term refinancing risk. Pro forma for this transaction, outstanding funded debt comprises EUR15 million of assignable loan notes (Schuldschein) due 2027, EUR600 million 4.75% notes due 2029, a EUR600 million term loan due September 2029 and EUR400 million notes due 2031. This creates a concentration of maturities in 2029 totalling EUR1.2 billion, but Fitch expects Azelis to proactively address this. Issuer Profile Azelis is a global specialty chemical distributor headquartered in Belgium. Summary of Financial Adjustments - Lease liabilities are excluded from financial debt; right-of-use asset depreciation and lease-related interest expense are reclassified as cash operating costs, reducing EBITDA accordingly - Off-balance-sheet factoring is added to financial debt. The cash flow statement is adjusted to reflect changes in factoring utilisation within financing activities rather than operating activities - Amortised debt issuance costs are added back to financial debt to reflect amounts payable at maturity - Deferred payment liabilities related to acquisitions are added to financial debt - Financial debt excludes accrued interest - Non-cash and non-recurring items are added back to EBITDA 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 Azelis. 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 ----------- ------ -------- ----- Azelis Group NV LT IDR BB+ Affirmed BB+ Azelis Finance NV senior unsecured LT BB+ Affirmed RR4 BB+ =========== F R A N C E =========== FORVIA SE: Fitch Alters Outlook on 'BB+' LongTerm IDR to Stable --------------------------------------------------------------- Fitch Ratings has revised FORVIA's Outlook to Stable from Negative and affirmed its Long-Term IDR and senior unsecured ratings at 'BB+'/RR4. The Outlook revision reflects FORVIA's announced disposal of its interiors business and management's stated commitment to allocate the full sale proceeds to deleveraging. Fitch understands from management that the transaction remains subject to regulatory approval, with no material obstacles currently expected. While Fitch expects leverage to remain elevated in the short term, the disposal leaves FORVIA with higher EBIT and free cash flow (FCF) margins, supporting the affirmation and Stable Outlook. The rating reflects FORVIA's business profile with investment-grade characteristics, supported by its scale, diversification, and market position. Fitch views the disposal of the interiors division as broadly neutral to the group's business profile. Key Rating Drivers Continued Deleveraging: Fitch expected significant reduction in net debt in 2026, in line with the announced disposal of the interiors business, and expects net EBITDA leverage to decline to the negative rating sensitivity (2.0x) over the forecast horizon from a peak of 3.5x in 2022. Fitch views the deleveraging trajectory as also supported by some recovery in the remaining business lines. FCF to Improve: Fitch expects FORVIA, following the interiors business disposal, to generate structurally improved FCF margins of 1%-2% over 2026-2029, above its previous projection of about 0.7% on average. This reflects a stronger operating asset base, improved operating earnings supported by cost discipline and working capital management, and therefore better cash flow conversion. Fitch does not assume any shareholder distributions before 2029 when Fitch includes a EUR150 million dividend. Cost Control Remains in Focus: Fitch continues to incorporate restructuring costs into its EBIT margin assumptions. Fitch assumes total recurring restructuring-related expenses of EUR600 million. This includes the full execution of the EU FORWARD and SIMPLIFY programmes, potential new initiatives to address weak profitability in the lighting division, and costs related to capacity adjustments across FORVIA's European footprint in response to changing production levels at original equipment manufacturer (OEM) customers. Solid Business Profile: Fitch views FORVIA's business profile as intact following the asset sale, with leading market positions, large scale, and sound diversification. FORVIA's increasing relevance to fast-growing Chinese OEMs, which tend to favour seating enhancements, and good order visibility in its higher-margin, value-added electronics division, support a gradual improvement in EBIT margins, despite muted growth in global automotive production. FORVIA's portfolio remains broadly powertrain-agnostic, and Fitch does not expect it to face material volume pressure from shifts in the regulatory environment affecting internal combustion engine or electric vehicle platforms. Tariff Risks, Geopolitical Tensions: Fitch considers the direct impact of the ongoing USMCA review to be manageable for FORVIA. The group's production facilities in Mexico primarily serve US customers and are largely USMCA-compliant. In addition, mitigating actions such as price adjustments could partly offset increases in duties. A prolonged conflict in the Middle East with a broader spillover effects onto the demand for global automotive sector is not in its rating case, but may materially weaken its assumptions. Peer Analysis FORVIA's business profile is comparable to that of auto suppliers at the low-end of the 'BBB' rating category. FORVIA benefits from a broad and diversified exposure to leading international OEMs and has a global reach. It has a smaller share of the aftermarket business — which is less volatile and cyclical than OEM sales — than tyre manufacturers, such as Compagnie Generale des Etablissements Michelin (A/Stable) and Continental AG (BBB/Positive). FORVIA's portfolio includes fewer high-value, high-growth products than leading and innovative suppliers, such as Robert Bosch GmbH (A/Negative), Continental AG (BBB/Positive) and Aptiv PLC (BBB/Stable). FORVIA's operating margins and leverage profile are at the lower end of the 'BB' rating category. Its EBIT margin of 5%-6% is considerably lower than that of investment grade-rated peers, such as Aptiv or Continental. Its FCF margin and leverage metrics are weak compared with seating makers, such as Lear Corporation (BBB/Stable) and Adient plc. Fitch’s Key Rating-Case Assumptions Group revenue without the interiors division to decline by mid-single digit in 2026, followed by average low single-digit growth during 2027-2029 EBIT margin after restructuring trending toward 6% by end-2029, supported by a lower cost base and production volume recovery Modest working capital release in 2026, in line with revenue decline Average capex at 7% of revenue to 2029 Cash disposal proceeds from interiors divestiture received by end-2026 Dividend resumes in 2029 at EUR150 million No material M&A or large share repurchases to 2029 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): Business and financial profile factors (assessment, relative importance): management ('bbb', Lower), sector characteristics ('bbb-', Higher), market and competitive positioning ('bbb+', Moderate), diversification and asset quality ('bb+', Moderate), company operational characteristics ('bb+', Moderate), profitability ('bb+', Moderate), financial structure ('bb-', Higher), and financial flexibility ('bbb+', Moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2026, 20% for the forecast year 2027, 30% for the forecast year 2028 and 30% for the forecast year 2029. The governance assessment of 'good' has no impact. The operating environment assessment of 'a' has no impact. The SCP is 'bb+'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'BB+'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBIT margin below 5% - FCF margin below 0.5% - EBITDA net leverage above 2.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBIT margin above 7.5% - FCF margin above 1.5% - EBITDA net leverage below 1.0x Liquidity and Debt Structure At end-December 2025, FORVIA had undrawn syndicated credit facilities of EUR2.45 billion, of which EUR2 billion was attributable to its Faurecia business and EUR450 million to HELLA. Faurecia's facilities are due in 2028 and HELLA's due at end-2027. FORVIA uses a commercial paper programme and factoring for working-capital funding. It also has access to local credit facilities at its operating subsidiaries. Debt at end-2025 comprised Schuldschein, term loans, sustainability-linked notes and bonds. The debt maturities are evenly spread between 2027 and 2031. Issuer Profile FORVIA is a top global automotive supplier. It provides solutions for safe, sustainable, advanced and customised mobility. FORVIA, composed of six business groups with 24 product lines, integrates the complementary technological and industrial strengths of Faurecia and HELLA. 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 Climate.VS for FORVIA S.E. is 51 for 2035. This is due primarily to FORVIA's exposure to passenger car and commercial vehicle production, which is subject to evolving emission regulatory standards in core markets. The regulations will gradually phase out conventional combustion engines and require future vehicle sales to be electric vehicles. The transition risks are mitigated by FORVIA's sustainability strategy that aims to turn the group into a climate-neutral company by 2045 at the latest and by continued investment in R&D and capex in electrification transition. The Climate.VS does not influence the current rating. 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 ----------- ------ -------- ----- FORVIA S.E. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ ============= G E R M A N Y ============= TECHEM HOLDING: S&P Assigns 'B+' LongTerm ICR, Outlook Stable ------------------------------------------------------------- S&P Global Ratings assigned its 'B+' long-term issuer credit rating to Germany-based international energy service provider Techem Holding GmbH. S&P's 'B+' ratings on subsidiary Techem Verwaltungsgesellschaft 675 mbH (Techem 675), with a '3' recovery rating (rounded recovery estimate: 60%) in the event of a payment default on the EUR3.50 billion senior secured debt, remain unchanged. S&P said, "We withdrew our 'B+' issuer credit rating on intermediate holding company Techem Verwaltungsgesellschaft 674 mbH (Techem 674) because it has ceased to exist. "The stable outlook reflects our forecast of up to 8% revenue growth in fiscal 2026 and 7% in fiscal 2027, resulting in ongoing deleveraging toward 7.5x and free operating cash flow (FOCF) of more than EUR40 million-EUR50 million in fiscal 2026 and 2027, as well as an unchanged financial policy that is supportive of the existing ratings." The simplification of the organizational structure is credit neutral. Techem Holding GmbH has been established as the new parent company of the group, consolidating the financial statements at that level. As part of the structural reorganization, Techem Verwaltungsgesellschaft 674, the former intermediate holding company, has merged with another intermediate holding company and ceased to exist. Techem Verwaltungsgesellschaft 675 remains the borrower of EUR3.5 billion senior secured debt. S&P said, "The stable outlook reflects our forecast of up to 8% revenue growth in fiscal 2026 and 7% in fiscal 2027, resulting in ongoing deleveraging toward 7.5x and FOCF of more than EUR40 million-EUR50 million in fiscal 2026 and 2027, as well as an unchanged financial policy that is supportive of the existing ratings. "We could lower the rating if Techem's operating performance is weaker than we expect, resulting in adjusted debt to EBITDA above 7.5x with no clear prospect of deleveraging or weak FOCF generation absent any EBITDA growth." This could happen if the company: -- Incurs higher exceptional costs than anticipated, depressing adjusted EBITDA below our expectations; or -- Experiences increased competition and struggles to expand beyond its stronghold market, thereby reducing its EBITDA. S&P said, "In addition, we could lower the rating if the company adopts a more aggressive financial policy through shareholder returns or significant debt-funded acquisitions that slow deleveraging to 7.5x. "We could take a positive rating action if Techem generates sufficient revenue growth, such that adjusted debt to EBITDA decreases sustainably toward 5x and FFO to debt increases toward 12%. A positive rating action would hinge on shareholders' commitment to maintain leverage below these levels." ============= I R E L A N D ============= POLUS EU XXI: Fitch Assigns 'B-sf' Final Rating on Class F Notes ---------------------------------------------------------------- Fitch Ratings has assigned Polus EU CLO XXI DAC final ratings. Entity/Debt Rating Prior ----------- ------ ----- Polus EU CLO XXI DAC A XS3331471733 LT AAAsf New Rating AAA(EXP)sf B XS3331471907 LT AAsf New Rating AA(EXP)sf C XS3331472384 LT Asf New Rating A(EXP)sf D XS3331472897 LT BBB-sf New Rating BBB-(EXP)sf E XS3331473192 LT BB-sf New Rating BB-(EXP)sf F XS3331473432 LT B-sf New Rating B-(EXP)sf Subordinated Notes XS3331473606 LT NRsf New Rating NR(EXP)sf Transaction Summary Polus CLO XXI DAC is a securitisation of mainly senior secured loans (at least 90%) with a component of senior unsecured, mezzanine, and second-lien loans. Note proceeds have been used to fund a portfolio with a target par of EUR400 million. The portfolio is actively managed by Polus Capital Management Limited. The transaction has an approximately 4.5-year reinvestment period, and a 7.5-year weighted average life (WAL) test at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors to be in the 'B' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 23.5. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the identified portfolio is 61.8%. Diversified Portfolio (Positive): The transaction includes various concentration limits in the portfolio, including a top 10 obligor concentration limit of 20% and a maximum exposure to the three largest (Fitch-defined) industries in the portfolio of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. WAL Step-Up Feature (Neutral): The transaction can extend the WAL test by one year on the WAL step-up determination date, which is one year after the issue date, if the adjusted collateral principal amount (with defaulted obligations carried at their Fitch collateral value) is at least equal to the reinvestment target par amount and if the transaction passes all its portfolio profile, collateral quality and coverage tests. Portfolio Management (Neutral): The transaction includes two Fitch test matrix sets, and each set comprises two matrices that correspond to two fixed-rate asset limits of 5% and 10%, respectively. All matrices correspond to a top 10 obligor limit at 20%. One set is effective at closing, corresponding to a 7.5-year WAL test. The other set, which corresponds to a seven-year WAL test, is effective 12 months after closing, or 18 months after closing if WAL test step-up condition is satisfied on the WAL step-up determination date. Switching to the forward matrices is subject to the satisfaction of the reinvestment target par condition. 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 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 analysis is 12 months less than the WAL test covenant at the issue date. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing the coverage tests and the Fitch 'CCC' bucket limitation test and a WAL covenant that progressively steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would lead have no impact on the class A and B notes and would 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 defaults 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. The class A notes do not have any rating cushion as they are already at the highest achievable rating. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to four notches each for all 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 across all classes. The class A notes are already rated 'AAAsf', which is the highest level on Fitch's scale and cannot be upgraded. 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 Polus EU CLO XXI 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. =================== L U X E M B O U R G =================== VITA BIDCO: S&P Withdraws 'B+' LongTerm ICR on Debt Repayment ------------------------------------------------------------- S&P Global Ratings withdrew its 'B+' long-term issuer credit rating and stable outlook on Vita Bidco S.a.r.l. since it has repaid all of its debt and ceased to exist. S&P also withdrew its ratings on the company's senior secured EUR605 million term loan B and EUR100 million senior secured revolving credit facility, which have been fully repaid. S&P said, "We rate the new top-level company of the Hanab group, Vita LuxCo S.a.r.l., and its subsidiaries 'B+' with a stable outlook. We also rate the newly issued EUR1.125 billion senior secured term loan B and EUR200 million senior secured revolving credit facility 'B+'." ===================== N E T H E R L A N D S ===================== CENTRIENT HOLDING: S&P Downgrades ICR to 'B-', Outlook Stable ------------------------------------------------------------- S&P Global Ratings lowered its ratings on pharmaceutical company Centrient Holding and its senior secured notes to 'B-' from 'B', with a recovery rating of '3' reflecting our expectation of 50%-70% recovery (rounded estimate 50%) in the event of a default. The stable outlook reflects S&P's view that Centrient will remain self-funding over the next 12 months and with its adjusted leverage reducing toward 8.5x in 2026. Strong competition and high one-off costs resulted in Centrient Holding's S&P Global Ratings-adjusted leverage rising to 10.0x in 2025 from 5.8x in 2024, with deeply negative free operating cash flow (FOCF). S&P said, "In 2026 we foresee pricing pressures from Asian competitors continue weighing on Centrient's operating performance, although lower one-off costs should support higher adjusted EBITDA and FOCF. "We believe Centrient's recovery depends on how the competitive landscape in less-regulated and semi-regulated markets evolves, which is highly uncertain." Centrient's S&P Global Ratings-adjusted leverage was 10.0x in 2025 mainly due to strong industry headwinds in its core active pharmaceutical ingredients (APIs) combined with high exceptional costs. Revenue declined 19.4% in 2025, versus our previous expectation of about 14.0%, reflecting depressed demand for Centrient's semisynthetic penicillin (SSP) and semisynthetic cephalosporin (SSC). This situation was primarily driven by subsidized overcapacity in China, which pushed down market prices for penicillin G (PenG)--the starting raw material--as well as for 6-APA and 7-ACA, key intermediates derived from PenG and used to produce SSC and SSP, respectively. As a result, final API prices came under significant downward pressure. Moreover, Centrient did not benefit from lower PenG prices, since its production is predominantly carried out in-house. Across segments, SSP sales declined 20.8% in 2025 mainly in semi-regulated and less-regulated markets, where Chinese state-owned companies continued supplying global markets at much lower prices, versus the previous year, and in our view below the full economic cost. In less-regulated markets, Centrient reduced pricing to defend volumes in a more price-sensitive environment, while volumes took a greater hit in semi-regulated markets where prices were kept stable to protect margins. Positively, prices and volumes remained relatively resilient in regulated markets, supported by long-term contracts and a favorable customer mix. On the other hand, the SSC segment recorded a 24.5% decline in sales, reflecting lower demand for SSC but also for 7-ADCA, which Centrient sells as an intermediate product to other pharmaceutical manufacturers. This is also driven by low Pen‑G prices, the primary ingredient of 7‑ADCA, which reduced upstream production costs and encourages vertically integrated SSC manufacturers to increase captive 7‑ADCA output rather than source externally. In turn, higher 7‑ADCA supply and lower demand pushed down SSC API prices. That said, Centrient's SSC prices remained relatively stable, supported by its ability to leverage product quality and market access, as well as its decision to forgo volumes in more price-sensitive, spot-driven markets. Revenue from statins has also decreased, down 35.9% in 2025, driven by pricing pressure from Indian converters temporarily benefiting from materially cheaper intermediates sourced from China. On the other hand, revenue from oral finished dosage forms (FDF; such as pills) grew by 2%, continuing its positive momentum. S&P Global Ratings-adjusted EBITDA declined sharply to about EUR68.4 million in 2025, versus a projected EUR85 million-EUR90 million, and down from EUR116.9 million in 2024. The decline stemmed from lower sales and, importantly, higher-than-expected exceptional costs associated with the cost-savings program, factory preparations for upcoming visits from the U.S. Food and Drug Administration, and the ongoing arbitration process with Astral, a former subsidiary declared insolvent following a 2023 product recall and now operationally and legally separated. S&P said, "In 2026, we foresee continuing pricing pressures further weighing on Centrient's operating performance.Based on the company's weak first-quarter results, we now expect revenue to decline by about 5% in 2026, compared with our previous projection of approximately 5% growth, as competitive pressures further weigh on Centrient's core segments. Across segments, we anticipate stabilization in SSP and SSC over the coming quarters, although year-on-year sales are expected to decline due to the comparison with solid first-half results last year. We see SSP sales declining by 5%-7% annually, reflecting a combination of lower prices in spot-driven, less-regulated markets and reduced volumes in semi-regulated markets. Sales remain relatively resilient in regulated markets and in the U.S., where Centrient benefits from product differentiation and longer contract durations. For SSC, we expect similar sales declines, as persistently low PenG prices continue to pressure pricing for the key intermediate 7-ADCA as well as the final API. This should be partly offset by a partial recovery in statins, supported by the Minimum Import Price policy introduced in India in September 2025, which is expected to support global pricing. We project limited growth in FDF in 2026, as the company repositions the segment for future profitable expansion by reshaping its customer portfolio toward higher-margin contracts, while continuing to increase capacity with contract manufacturing organizations (CMOs)." Still, adjusted leverage should reduce to about 8.5x in 2026, as normalizing one-off costs and improving cost discipline support adjusted EBITDA growth to about EUR80 million. This reflects a margin improvement of 250 basis points (bps) to 300 bps, mainly stemming from a decline in exceptional costs to about EUR15 million in 2026, from EUR30 million last year, due to the phase-out of restructuring charges related to the cost-savings program implemented last year and a significant reduction in Astral-related legal expenses. This also assumes relatively stable gross margins, underpinned by Centrient's strategy to prioritize price stability, selectively quoting where it can maintain pricing power, while foregoing volumes in certain less-regulated markets where prices remain exceptionally low. S&P assumes a limited impact from the conflict in Iran on input costs, given Centrient's hedging of key inputs (energy, electricity, and glucose), as well as our expectation that any unhedged cost increases (chemical intermediates derived from oil and gas, logistics, packaging, etc.) can be passed through via price adjustments in contracted business. The company's recovery trajectory still depends on improvements in the competitive environment in Asia, limiting overall visibility. Over the forecast period, S&P continues to observe pricing pressure in less-regulated and semi-regulated markets, driven overcapacity in China. This overcapacity stems from broad-based state support mechanisms and favorable energy economics, which are critical for fermentation processes. Chinese state-owned manufacturers benefit from a subsidy structure that includes financial incentives, compliance support, and a strategic emphasis on scale over margins. These measures are aimed at reinforcing China's central role across the upstream pharmaceutical value chain--particularly in APIs, intermediates, and fermentation-based production platforms--and are exerting sustained price pressure on producers outside China. Given that antibiotics such as penicillin derivatives are high volume, low margin, and scale driven, they are particularly well suited to this policy model. S&P said, "That said, we note early signs of improvement in the SSP segment, with some listed Chinese producers indicating higher offer prices, reflecting the unsustainability of current price levels. However, these increases are not yet evident in transaction prices, which we expect to remain subdued over the remainder of the year. In addition, our assumption that PenG prices will stay at currently depressed levels suggests continued pressure on 7‑ADCA and SSC prices through the value chain, given the strong cost linkage between these products." Despite Centrient's efforts to pivot toward a more contract-based business model focused on highly regulated markets, it will remain dependent on less-regulated and semi-regulated spot markets. S&P said, "We expect the group to prioritize preserving gross margins amid current market headwinds by focusing on more regulated markets, where pricing tends to be more resilient, while continuing to enhance its cost competitiveness. This approach supports its long-term strategy of gradually transitioning toward a more contract-based business model, improving earnings visibility and procurement planning, and reducing exposure to the inherent volatility of less-regulated markets, which still account for approximately 30%-35% of sales. Conversely, highly regulated markets benefit from higher barriers to entry, greater switching costs, and lower price sensitivity. In these markets, Centrient can leverage its competitive advantages relative to Asian producers, supported by customers' focus on supply chain security, product quality, and sustainability. That said, we expect less-regulated and semi-regulated markets to remain a core component of Centrient's operations, given their structural importance to the global antibiotics industry. These markets represent the majority of global demand (70%-80%), benefit from above-average growth driven by demographic trends and expanding health care access, and remain relevant because Centrient already has high market shares and faces limited growth opportunities in more mature regulated markets. Additionally, we expect Centrient to continue expanding its FDF unit--which now accounts for roughly 12% of sales--as another pillar of its strategy to diversify away from primary antibiotics APIs and to leverage the efficiencies of a vertically integrated model. However, we expect this to have a limited impact over our rating horizon (12-18 months), given modest near-term growth prospects as the company reorganizes its commercial strategy from a still relatively small base." S&P said, "We expect Centrient's liquidity to remain adequate over the coming 12 months, supported by no short-term refinancing needs.Despite FOCF of negative EUR38.4 million in 2025, the company has approximately EUR110 million in total sources as of March 31, 2026, including EUR72.5 million available on a revolving credit facility (RCF), EUR24.3 million of balance-sheet cash, as well as local debt facilities. Moreover, we expect a marked improvement in FOCF in 2026 to approximately breakeven, thanks to higher adjusted EBITDA, a slightly positive working capital contribution, and notably lower cash interest costs, reflecting the full-year benefit of refinancing in 2025. Last year's refinancing also extended debt maturities to 2030, effectively eliminating short-term refinancing risk. That said, cash conversion will remain constrained by growth capital expenditure (capex), primarily related to the Delft site separation. "The stable outlook reflects our expectation that Centrient's operating performance won't deteriorate further over the next 12 months, since its leading position in API antibiotics in highly regulated markets and in the U.S. helps mitigate continuing competitive pressures from low- and semi-regulated markets. "We anticipate adjusted debt to EBITDA to reduce to about 8.5x in 2026, with FOCF roughly neutral in the next 12-18 months, after absorbing high expansionary capex, supported by stable working capital needs. "We could lower the ratings if Centrient's performance were to deviate from our base case, such that we regard its capital structure as no longer sustainable, or if refinancing risk elevated. Rating downside could also materialize if there was a liquidity shortage. This could primarily stem from a further deterioration of the competitive landscape, with intensifying price competition from Asian manufacturers that further reduces sales in semi-regulated and less-regulated markets. A downgrade could also result from additional operational issues at Centrient's manufacturing sites, leading to sharply higher exceptional costs. "We could raise the ratings if Centrient posts operating performance that exceeds our expectations, with adjusted debt to EBITDA remaining comfortably below 7x, and structurally positive FOCF. In our view, this could mainly come from a material improvement in market conditions for antibiotics in Asia while one-off costs reduce materially." An upgrade is contingent on Centrient improving its ability to absorb cyclical competitive pressures from less-regulated and semi-regulated markets. =========== R U S S I A =========== GROSS INSURANCE: Fitch Affirms 'B+' Insurer Finc'l. Strength ------------------------------------------------------------ Fitch Ratings has affirmed Uzbekistan-based Gross Insurance Company JSC's Insurer Financial Strength (IFS) Rating at 'B+'. The Outlook is Stable. The IFS Rating is primarily constrained by the company's weak capitalisation. This is partially counterbalanced by the insurer's favourable competitive position in Uzbekistan, robust financial performance and an adequate investment risk profile for the local context. Key Rating Drivers Large Domestic Insurer: Gross is one of Uzbekistan's leading insurers. It ranked among the top three domestic insurers, with a notable 7% market share in gross written premiums (GWP) in 2025. The company's moderate business risk profile benefits from good diversification in business lines, stable and reasonably managed exposure to inward reinsurance as well as limited origination in potentially volatile financial risk insurance. Gross's operating scale remains limited compared with international peers, with GWP of about USD70 million in 2025. Weak Capital Position: Gross's capital position, assessed by Fitch's Prism Global model, was 'Weak' at end-2025, due to a high asset-risk factor, which stems from the insurer's large and growing investment portfolio relative to capital. Fitch expects the Prism score to remain 'Weak' in 2026, weighed down by growing business volumes, despite robust internal capital generation. The company's regulatory solvency margin has historically been tight. It increased to 131% at end-2025 (vs 115% at end-2024). Strong Earnings: Return on equity was 36% in 2025 (2024: 32%), mainly driven by strong investment income. However, underwriting results remain limited, reflected in an only moderate combined ratio of 96% in 2025 (2024: 98%). This is due to high acquisition and operating expenses, largely offsetting the premiums generated. Investment Risks Commensurate with Rating: The bulk of the company's investment portfolio is liquid assets held with local banks, rated in the 'B' or 'BB' categories. The share of equity and bond investments, including those in affiliated entities, has been gradually reducing. Consequently, Gross's risky assets-to-capital ratio decreased to 16% at end-2025 (vs 30% at end-2024; 56% at end-2023). Moderate Reinsurance Risks: Gross's retention ratio in terms of net written premiums to GWP is stable (72% in 2025; 70% in 2024). The reinsurer panel's credit quality is mixed. Gross benefits from obligatory reinsurance, including excess-of-loss protection with high-rated European insurers. However, counterparty risk remains high due to notable single-name concentration among local reinsurers. Gross is exposed to catastrophe risk, in line with local peers, but it lacks special catastrophe coverage. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A sustained weakening of the business profile, as reflected in higher business risk or a decline in market share - A deterioration in the capital position, potentially driven by weak operating performance combined with aggressive growth Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Stronger capitalisation, as evidenced by a Prism score of at least 'Somewhat Weak' on a sustained basis, with regulatory solvency above minimum requirements, alongside maintenance of a favourable market position 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 ----------- ------ ----- Gross Insurance Company JSC LT IFS B+ Affirmed B+ =========== S W E D E N =========== POLESTAR AUTOMOTIVE: Schedules Annual General Meeting for June 26 ----------------------------------------------------------------- Polestar Automotive Holding UK PLC announced in a regulatory filing that it distributed a notice of annual general meeting to be held at the offices of Alston & Bird (City) LLP, LDN:W, 6th Floor, 3 Noble Street, London, EC2V 7EE, United Kingdom at 3:00 pm (British Summer Time) on June 26, 2026 to the holders of the Company's ordinary shares in connection with the Company's AGM. The notice of AGM is available at https://tinyurl.com/NOTICE-OF-AGM The meeting will be voting for the re-appointment of all Directors and the appointment of PricewaterhouseCoopers as Auditors. On or about May 19, 2026, Citibank, N.A., in its capacity as the depositary bank for the Company's American Depositary Shares, commenced mailing notice materials and voting instruction cards to ADS holders to enable ADS holders of record as of May 8, 2026, to instruct the Depositary to vote the ordinary shares represented by their ADSs. The Depositary's notice of AGM to ADS holders and the ADS voting instruction card are available at https://tinyurl.com/DEPOSITARY-NOTICE and https://tinyurl.com/ADS-VOTING The Company has published its U.K. annual report and accounts for the year ended December 31, 2025 on its website at: https://investors.polestar.com/corporate-governance/annual-general-meeting About Polestar Automotive Polestar (Nasdaq: PSNY) is the Swedish electric performance car brand with a focus on uncompromised design and innovation, and the ambition to accelerate the change towards a sustainable future. Headquartered in Gothenburg, Sweden, its cars are available in 27 markets globally across North America, Europe and Asia Pacific. As of December 31, 2025, the Company had $3.93 billion in total assets, $9.05 billion in total liabilities, and $5.12 billion in total deficit. Deloitte AB, the Company's independent registered public accounting firm for the fiscal year ended December 31, 2025, has included an explanatory paragraph in their opinion that accompanies the Company's audited consolidated financial statements as of and for the year ended December 31, 2025, indicating that the Company requires additional financing to support operating and development activities that raise substantial doubt about its ability to continue as a going concern. ============= U K R A I N E ============= INTERPIPE HOLDINGS: S&P Raises ICR to 'CCC+' on Repayment of Notes ------------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on Ukrainian steelmaker Interpipe Holdings PLC to 'CCC+' from 'CCC'. The stable outlook reflects S&P's expectation that the company will maintain a manageable debt maturity profile with no significant near-term debt maturities. On May 13, 2026, Interpipe redeemed its outstanding 2026 notes using available cash balances, with about $65 million remaining after the repayment. The upgrade follows the recent debt repayment, which enabled Interpipe to achieve a zero net debt position. On May 13, 2026, Interpipe repaid the remaining $111 million of its 2026 senior unsecured notes using cash on hand. This leaves about $65 million of available cash after the repayment, against gross debt of about $67 million, of which $62 million comprises long-term bank debt. S&P said, "While we view positively its improved debt position, we note the company is ramping up in-house steel billet production following disruptions at its electric arc furnace (EAF), which was effectively offline for seven months in 2025. This would require material working capital outflow of about $110 million-$120 million. We understand Interpipe is also in discussion with local banks to secure up to $90 million in additional facilities to enhance its liquidity and working capital facility needs in 2026. "Overall, we expect moderately negative free operating cash flow (FOCF) of about $55 million-$75 million in 2026. In 2027, we expect FOCF to normalize to about $70 million-$90 million absent further operational disruptions and unforeseen war-related risks. "We expect some recovery in Interpipe's operating performance in 2026, balanced by elevated cost pressures and operational risks. In 2026, we anticipate a recovery in pipes sales volumes of about 10%-15% year-on-year, while sales volumes of railway wheels are expected to be broadly flat. The recovery follows subdued 2025 volumes caused by sustained production disruptions related to the suspension of the EAF. "In our base case, we expect S&P Global Ratings-adjusted EBITDA of about $200 million in 2026, compared with $185 million in 2025. That said, EBITDA could deteriorate, reflecting rising energy costs stemming from Russian attacks on Ukrainian energy infrastructure. We also cannot rule out further disruptions to the EAF, which could increase reliance on imported steel billets with longer lead times and entail lower margins compared to in-house billets." Operational disruptions and war-related risks continue to weigh on Interpipe's operating environment. The ongoing Russia-Ukraine war continues to translate into significant operational and security challenges. Electricity shortages have led to very high energy costs (historically, low energy prices underpinned Ukraine steel producers' favorable cost position in Europe) and an inability to operate in-house production lines. When needed, Interpipe has covered any supply shortages with imported energy from Europe. Skilled labor shortages continue to constrain operations, pushing up wage expenses and reliance on overtime pay. While the company's key assets remain largely undamaged, the security situation on the ground remains fluid. The stable outlook reflects S&P's expectation that the company will maintain a manageable debt maturity profile with no significant near-term debt maturities. S&P could lower the rating on Interpipe if the geopolitical conflict accelerates such that the operating environment adversely changes and the company's liquidity profile deteriorates. Although S&P sees an upgrade over the next 12 months as unlikely, S&P could raise the rating on Interpipe if: -- Ukraine is upgraded; and -- The operating environment in Ukraine improves significantly following an end to the miliary conflict. =========================== U N I T E D K I N G D O M =========================== ALDBROOK MORTGAGE 2026-1: Fitch Assigns B-sf Rating on Cl. X Notes ------------------------------------------------------------------ Fitch Ratings has assigned Aldbrook Mortgage Transaction 2026-1 plc notes' final ratings. Entity/Debt Rating Prior ----------- ------ ----- Aldbrook Mortgage Transaction 2026-1 plc Class A XS3352586062 LT AAAsf New Rating AAA(EXP)sf Class B XS3352586146 LT AA+sf New Rating AA+(EXP)sf Class C XS3352586492 LT A+sf New Rating A+(EXP)sf Class D XS3352586575 LT BBB+sf New Rating BBB+(EXP)sf Class E XS3352586658 LT BBsf New Rating BB(EXP)sf Class X XS3352586732 LT B-sf New Rating B-(EXP)sf Transaction Summary The transaction is a static securitisation of a mixed pool of owner-occupied (OO) (40.9%) and buy-to-let (BTL) loans (59.1%) originated by The Mortgage Lender (TML). TML remains the legal title holder and the servicer of the assets. The seller is Shawbrook Bank Limited, the ultimate parent of TML. KEY RATING DRIVERS Mixed Pool, Low-Seasoned Assets: The mortgage pool comprises OO and BTL loans, primarily originated after 2023, with a weighted average (WA) seasoning of 22 months. Within the OO market, TML focuses on borrowers who do not qualify for high street lenders' automated scorecard criteria. This can include borrowers with some adverse credit and complex incomes. TML's lending policies are in line with prime BTL lenders', requiring full valuation of all loans and applying loan-to-value and interest cover ratio tests for underwriting. Fitch therefore applied transaction adjustments of 1.1x and 1.0x to foreclosure frequencies (FF) for the OO and BTL sub-pools, respectively. Self-Employed Borrowers: Self-employed borrowers account for 35.3% of the OO sub-pool. Prime lenders assessing borrower affordability typically require a minimum of two years of income information and apply a two-year average, or, if income is declining, the lower income amount. TML's underwriting practices give underwriters discretion to accept borrowers with only one year's income verification within certain limits. Fitch therefore applied an increase of 30% to FF for self-employed borrowers with verified income, instead of the 20% increase typically applied under its UK RMBS Rating Criteria to the OO sub-pool. Unhedged Basis Risk: The pool comprises fixed-rate loans that revert to TML's standard variable rate (SVR) plus a contractual margin of 3.2% on a WA basis at closing. Fitch has stressed the transaction's cash flows for basis risk between the Bank of England base rate and SONIA, in line with its UK RMBS Rating Criteria as TML's SVR historically tracks Bank of England base rate movements closely. Fixed Interest Rate Swap Schedule: The transaction features a fixed-to-floating interest rate swap to hedge the interest rate risk between the fixed-rate mortgage assets and the SONIA-linked notes. The swap has a defined notional schedule, calculated using a 0% constant prepayment rate and assuming no defaults. In Fitch's cash flow modelling, the combination of high prepayments and decreasing interest rates leads to the transaction being over-hedged with swap payments senior to notes interest. This combination is the driving scenario in its ratings. No Product Switches Permitted: No product switches may be retained in the pool and will be repurchased. This mitigates the potential for pool migration towards lower-yielding assets and the need for additional hedging. The repurchase of product switches supports the build-up of credit enhancement (CE), particularly for the senior notes but this could create a large increase in prepayments and compress the available excess spread in the transaction, leading to less CE protection for junior notes. Alternative Prepayment Rates: The transaction contains a high proportion of fixed-rate loans subject to early repayment charges. The point at which these loans are scheduled to revert from a fixed rate to the relevant follow-on rate will likely determine when prepayments will occur. Fitch has, therefore, applied an alternative high prepayment stress that tracks the fixed-rate reversion profile of the pool. The high prepayment rate applied is capped at 40% a year and floored at 5% during periods of minimal fixed-rate reversions. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transaction's performance may be affected by adverse changes in market conditions and the economic environment. Weakening economic performance is strongly correlated to increasing delinquencies and defaults that could reduce the CE available to the notes. In addition, unexpected declines in recoveries could result in lower net proceeds, which may make some notes susceptible to negative rating action, depending on the extent of the decline in recoveries. Fitch found that a 15% increase in the WAFF and a 15% decrease in the WA recovery rate (RR) may lead to downgrades of one category each for all 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, potentially, upgrades. Fitch found that a 15% decrease in the WAFF and a 15% increase in the WAFF would lead to upgrades of one category each for the class C, D and E notes. The class B notes would remain at their rating and the class A notes are at the highest achievable rating on Fitch's scale. 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. Date of Relevant Committee 08 May 2026 ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. BUCKINGHAM BUTCHER: Rushtons Insolvency Appointed as Administrator ------------------------------------------------------------------ The Buckingham Butcher Limited was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number CR-2026-000438. Zane Collins of Rushtons Insolvency Limited was appointed as Administrator on May 11, 2026. The company are wholesale butchers. Its registered office is 11 Buckingham Butchers Homestall, Buckingham, MK18 1XJ. Its principal trading address is 11-15 Homestall, Buckingham Industrial Estate, Buckingham, MK18 1XJ. The Administrator can be contacted at: Zane Collins Rushtons Insolvency Limited 6 Festival Building Ashley Lane Saltaire BD17 7DQ For further information, contact: Alternative contact: Simon Robinson Tel: 01274 598 585 Email: sarobinson@rushtonsifs.co.uk Contact: The Administrator CO-OPERATIVE GROUP: S&P Rates New GBP350MM Senior Notes 'BB-' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue rating to the proposed GBP350 million sustainability senior notes, due in November 2031, to be issued by the Co-operative Group Ltd. (Co-op; BB-/Stable/--). S&P assigned a '3' recovery rating to the proposed senior unsecured notes, indicating its expectation of meaningful recovery prospects (50%-70%; rounded estimate: 65%) for debtholders in the event of a default. The proposed notes will be guaranteed by the entities generating 95% of the group's EBITDA and rank pari passu with the group's senior facilities comprising (i) a GBP150 million term loan due June 2030 and (ii) the GBP600 million revolving credit facility (RCF) due November 2029. On April 24, 2026, Co-op amended and restated its facility agreements, upsizing its RCF to GBP600 million from GBP400 million and reducing its delayed-draw term loan commitment to GBP150 million from GBP350 million signed on June 18, 2025. S&P understands that the term loan may be drawn during its availability period from June 1, 2026 to July 31, 2026. The transaction will complete by July 8, 2026--when the existing GBP350 million senior unsecured notes mature. This is when the group will repay the existing notes and any drawings on the RCF (GBP52 million as of Jan. 3, 2026) from the proceeds of the proposed notes issuance and the GBP150 million term loan facility drawdown, with the rest remaining as cash on balance sheet. If completed as outlined above, S&P would view this transaction as leverage-neutral and liquidity-enhancing, supported by the higher cash pro forma from the transaction, in addition to the earlier increase in the RCF commitment. S&P said, "Following the group's announcement of fiscal 2025 results on March 26, 2026, we revised our earnings forecast on Co-op for 2026-2028, to reflect our expectation that soft volume trends amid fierce competition and cost headwinds will constrain Co-op's profitability margins rebound in the aftermath of the 2025 cyber disruption. That said, as the group prioritizes cash flow generation unwinding its working capital position and slimming its capital expenditure, we now expect positive free operating cash flow after leases of about GBP20 million annually in 2026-2027. Therefore, we expect S&P Global Ratings-adjusted debt to EBITDA of about 3.8x in 2026 and about 3.2x in 2027, despite the lower earnings forecast." The group's recovery trajectory will depend on its ability to execute its strategy under the competition pressure from the market-share-gaining big box grocers and discounters, that compound on volume headwinds in the wholesale segment. S&P said, "A later and less complete easing of disruptions in the Strait of Hormuz than previously anticipated could lead to weaker trading conditions and higher cost inflation than we forecast in our base case. We also note additional risks that could challenge the group's competitive position under the government-imposed measures such as an introduction of the Deposit Return Scheme on single-use bottles in October 2027 and currently discussed price controls on food products and increase in regulatory power over retailers' pricing practices." Issue Ratings--Recovery Analysis Key analytical factors -- Pro forma the transaction, Co-op's capital structure will be composed of a GBP600 million RCF due in November 2029, a GBP150 million term loan facility due June 2030, and proposed GBP350 million senior unsecured notes due in November 2031, along with a low amount of priority debt. The term loan may be drawn during its availability period from June 1, 2026 to July 31, 2026, along with the proposed notes, to repay the existing notes and any drawings on the RCF. -- S&P said, "We rate the proposed GBP350 million senior unsecured notes due in November 2031 'BB-' with a '3' recovery rating, in line with our issuer credit rating on Co-op and indicating our expectation of meaningful recovery (50%-70%; rounded estimate: 65%) in a hypothetical default." -- S&P notes that the proposed notes rank pari passu with the group's senior facilities including GBP150 million term loan (unrated) and the GBP600 million RCF (unrated). The proposed notes are guaranteed by guarantors including Co-operative Group Food Limited; (ii) Co-operative Foodstores Limited; (iii) Funeral Services Limited; (iv) Co-operative Group Holdings (2011) Ltd; (v) Rochpion Properties (4) LLP, and (vi) Co-op Insurance Services Limited, which in aggregate represented 95% of Co-op's underlying EBITDA, 92% of total assets, and 86% of revenue, as of Jan. 3, 2026. -- The recovery rating is supported by the low amount of priority and first-lien debt but constrained by the notes' unsecured status. The indicative recovery prospects on the unsecured notes are close to 90% (compared to greater than 100% in previous analysis due to the increase in gross debt from the anticipated GBP150 million term loan drawing), but S&P caps the recovery rating at '3' due to the notes' unsecured nature and uncertainty about potential changes in the capital structure before a hypothetical default, as per the Recovery Rating Criteria For Corporate Issuers, March 31, 2026. -- S&P also notes that the group benefits from a property portfolio of GBP1.4 billion cost value, with 33% of its stores, 50% of its funeral sites, and 9% of its depots being in freehold ownership. -- S&P's hypothetical default scenario contemplates a significant weakness in operating performance leading to a drop in earnings and working capital outflows, amid relentlessly stiff competition in the U.K. retail market, with large grocery chains opening more convenience stores and discounters continuing to gain market share. The scenario also assumes the funeral care segment will turn cash negative, and the legal and insurance services will not reach sufficient scale to offset the headwinds in food and funeral care operations. -- S&P values the group as a going concern, given its market position as the largest consumer co-operative in the U.K. and the seventh-largest food retailer, with a well-recognized brand and large convenience store network. Simulated default assumptions -- Jurisdiction: U.K. -- Simulated year of default: 2030 Simplified waterfall -- EBITDA at emergence: GBP182 million -- Implied enterprise value multiple: 5.5x -- Gross enterprise value at default: GBP1.0 billion -- Net enterprise value after administrative costs (7%): GBP930 million. S&P assumes higher administrative costs due to the group's co-operative structure. -- Estimated priority claims: GBP5 million -- Value available for claims: GBP925 million -- Estimated unsecured debt: GBP1.1 billion -- Recovery rating: 3 (50%-70%; rounded estimate: 65%) Note: All debt amounts include six months of prepetition interest. S&P assumes that 85% of the RCF is drawn at the time of default. NORTH WEST PRECISION: Leonard Curtis Appointed as Administrators ---------------------------------------------------------------- North West Precision 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-2026-003693. Steven Muncaster and Mike Dillon of Leonard Curtis were appointed as Joint Administrators on May 14, 2026. The company specialized in the manufacture of air and spacecraft and related machinery. Its registered office and principal trading address is Unit 3a Ebenezer Street, Rock Ferry Industrial Estate, Birkenhead, Merseyside CH42 1NH. The Joint Administrators can be contacted at: Steven Muncaster Leonard Curtis 3rd Floor, Exchange Station Tithebarn Street Liverpool L2 2QP -- and -- Mike Dillon Leonard Curtis Riverside House Irwell Street Manchester M3 5EN For further information, contact: Alternative contact: Amelia Heeds Tel: 0161 831 9999 Email: recovery@leonardcurtis.co.uk Contact: The Joint Administrators ROTHERMERE CONTINUATION: Fitch Lowers LongTerm IDR to 'BB' ---------------------------------------------------------- Fitch Ratings has downgraded Rothermere Continuation Holdings Limited's (RCHL; the parent company of Daily Mail and General Trust plc) Long-Term Issuer Default Rating (IDR) to 'BB' from 'BB+' and maintained the Rating Watch Negative (RWN). The downgrade reflects a weaker business profile following the announced divestiture of RCHL's US property information business, Trepp, which will reduce scale and diversification, while increasing exposure to cyclical and structurally declining end-markets. This is partly offset by enhanced financial flexibility from divestiture proceeds. Fitch does not expect the Telegraph Media Group acquisition to proceed. The RWN reflects uncertainty around RCHL's financial risk profile, which depends on its capital allocation priorities. Fitch will resolve the RWN after the transaction closes, once Fitch has visibility on use of proceeds and future financial metrics. The ratings reflect RCHL's strong print media market position, balanced against small scale, secular pressures and UK concentration. Conservative leverage and strong financial flexibility offset weak profitability. Key Rating Drivers Trepp Divestiture and Portfolio Shift: Fitch expects the pending sale of Trepp to weaken RCHL's business profile by reducing scale, diversification and profitability. The disposal will remove a high-margin, subscription-based business, reducing earnings and revenue visibility. A company-defined operating profit margin for Trepp was about 34% at the end of the financial year ending September 2025 (FYE25). On a pro-forma basis, Fitch estimates about 60% of revenue and company-defined operating profit will come from the consumer media segment. In its view, together with over 60% of revenue from the UK, this will increase RCHL's exposure to declining, highly competitive and/or cyclically sensitive sectors closely linked to the UK economy. Use of Proceeds Uncertain: Fitch expects proceeds from the Trepp divestiture (USD1 billion) to provide meaningful financial flexibility with materially improved liquidity and a net cash position in the short term. However, uncertainty around RCHL's future capital allocation priorities could reduce liquidity and lead leverage to rise materially from its post-disposal trough. This, together with a weaker business profile, could result in further negative rating action. Weak Profitability, Stable FCF: RCHL's EBITDA margin is weak for its 'BB' rating. Fitch forecasts it will decline to 6% in FY26-FY27 from 8% in FY25 following the Trepp disposal, partly offset by margin improvement in the events segment from FY27. However, cash flow conversion is adequate. The business generates a low- to mid-single-digit pre-dividend free cash flow (FCF) margin, while cash flow from operations less capex to debt is about 10%, benefiting from low cash outflows related to cash interest, working capital and capex. Events Subject to Geopolitical Risk: Fitch expects the events segment will be adversely affected by geopolitical instability across the Middle East in the near term. The rescheduling of regional events to 2HFY26 introduces execution risk, including the possibility of revenue shifting into FY27 and weaker attendance in the following event cycle. Fitch expects the events segment's operating margin to decline to 13% in FY26 before recovering to 16%-17% in FY27-FY28, assuming a sustained easing of regional tensions. Leverage Profile Evolving: Fitch expects Fitch-defined EBITDA net leverage to turn temporarily negative in FY26 - as reflected in a net cash position - supported by divestiture proceeds from 2.1x in FY25. However, on a gross basis, Fitch expects EBITDA leverage to increase to 3.3x in FY26 from 2.3x in FY25 due to lower EBITDA following the Trepp disposal. Fitch has reduced RCHL's debt capacity by 0.5x, reflecting a less diversified business profile and greater exposure to cyclical and structurally declining markets, especially print media, following the Trepp disposal. The future leverage profile will depend heavily on the use of proceeds, including any potential bond repayment, as part of the future capital allocation policy. Peer Analysis RCHL's UK peer, ITV plc (BBB-/Stable), faces similar secular pressures and volatility in its broadcasting business, although to a lesser extent. However, its larger scale, leading commercial broadcast market position in the UK and diversified international studios business result in lower overall business risk. Formula 1 (Delta Topco Limited; BB/Stable) has higher leverage, which balances an otherwise robust business profile, benefiting from a growing global franchise, strong revenue visibility and cash generation, albeit concentrated in one sport. Another peer of similar scale, S4 Capital plc (B+/Negative), has weaker revenue visibility stemming from project-based advertising services with higher exposure to cyclical client budgets. Other higher-rated broader peers such as RELX PLC (A-/Stable) and Informa PLC (BBB/Stable), News Corporation (BBB/Stable) and Thomson Reuters Corporation (A-/Stable) benefit from factors such as greater scale, a stronger operating mix driven by a higher proportion of subscription-based revenue and higher Fitch-defined EBITDA margins, little/lower exposure to print media and a higher proportion of discretionary cash flow, which support higher leverage at their respective ratings. Fitch’s Key Rating-Case Assumptions - Revenue decline of 2%-6% in FY26-FY27, reflecting the Trepp disposal before returning to about 1% growth per year in FY28-FY29 - Fitch-defined EBITDA margin of 6.0% in FY26, gradually improving to 6.5% in FY29 - Working capital outflow of 0.5% of sales in FY26-FY29 - Capex averaging 1.0% of revenue in FY26-FY29 - Non-recurring cash outflows of GBP20 million in FY26 - Dividends of GBP22 million-24 million per year in FY26-FY29 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): Business and financial profile factors (assessment, relative importance): management ('bbb', Lower), sector characteristics ('bb+', Moderate), market and competitive positioning ('bb', Higher), diversification and asset quality ('bb', Moderate), company operational characteristics ('bb', Moderate), profitability ('bb-', Moderate), financial structure ('bb+', Moderate), and financial flexibility ('bb', Higher). The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year FY26, 40% for the forecast year FY27 and 40% for the forecast year FY28. The governance assessment of 'good' has no impact. The operating environment assessment of 'aa-' has no impact. The SCP is 'bb'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'BB'. Recovery Analysis RCHL's senior unsecured rating is 'BB', in accordance with Fitch's Corporates Recovery Ratings and Instrument Ratings Criteria, which apply a generic approach to instrument notching for 'BB' rated issuers. This results in a Recovery Rating of 'RR4', in line with the IDR. The instrument rating also remains on RWN. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Fitch-defined EBITDA net leverage consistently above 1.7x - Weakening of Fitch-defined EBITDA margin, exacerbated by continuing exceptional charges deemed by Fitch to be operating or recurring in nature - Pre-dividend FCF margin below 3% on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch does not expect positive rating action due to the company's limited scale, secular risks and limited diversification. The RWN would be resolved with an affirmation of the IDR, if the divestiture proceeds are used for debt repayment and investments, supporting the business profile. Liquidity and Debt Structure Fitch expects RCHL's liquidity to be strong following the receipt of the USD1 billion sale proceeds, positive low single-digit FCF margins for FY26-FY29 and a GBP200 million revolving credit facility. These comfortably cover short-term liabilities and the company's GBP150 million bond maturity in FY27. Issuer Profile RCHL is a diversified company with a portfolio of assets in the B2B and B2C spaces. DMG Media is the B2C print and online media business with most revenue earned by the Daily Mail, Mail on Sunday and MailOnline news outlets. 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 RCHL. 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 ----------- ------ -------- ----- Rothermere Continuation Holdings Limited LT IDR BB Downgrade BB+ Daily Mail and General Trust plc senior unsecured LT BB Downgrade RR4 BB+ SKYSHIELD GROUP: S&P Assigns Preliminary 'B' ICR, Outlook Stable ---------------------------------------------------------------- S&P Global Ratings assigned its preliminary 'B' long-term issuer credit rating to Skyshield Group Topco Ltd. (Smiths Detection) and its preliminary 'B' issue rating and '3' recovery rating (rounded recovery: 55%) to the proposed TLB. The stable outlook reflects S&P's view that Smiths Detection will gradually expand its topline and reduce leverage over the next 12-18 months, with revenue for the fiscal year ending July 31, 2027 of marginally more than GBP1 billion, S&P Global Ratings-adjusted EBITDA margins of 15.7%-16.2%, marginally positive free operating cash flow (FOCF), and funds from operations (FFO) to cash interest coverage close to 2.0x. CVC Capital Partners is set to close a deal to acquire Smiths Detection, a global leader in security screening and threat detection technology, for GBP2 billion in the second half of 2026, funded via a proposed GBP1,040 million term loan B (TLB) and new common equity, with no quasi equity or shareholder loans present in the structure. Smiths Detection's credit quality is supported by its strong market position, particularly in aviation, customer base, geographic diversification, supportive competitive landscape, and high share of aftermarket and recurring sales, though it is constrained by its moderate scale and high leverage. CVC Capital Partners Fund IX is acquiring Smiths Detection from Smiths Group PLC, with the transaction expected to close in the second half of 2026. Smiths Detection, through Skyshield US Bidco Limited, plans to issue a new GBP1,040 million equivalent euro- and U.S. dollar-denominated TLB, alongside a new undrawn GBP170 million revolving credit facility (RCF) as part of the transaction. The new debt, alongside GBP962 million of common equity, will support the acquisition. S&P Global Ratings understands that, as part of the transaction, all outstanding intercompany loans owed to Smiths Group PLC will be extinguished and Smiths Detection will be sold to CVC on a debt-free basis, with GBP23 million of leases rolled over into the new capital structure. Smiths Detection is a leading provider of security screening and threat detection technology, with a particular strength in aviation and plans to expand in other end-markets. Smiths Detection holds a 30%-35% market share in security screening (in global aviation), ahead of peers such as Rapiscan (part of OSI systems), Leidos, and Analogic. It has multi-year partnerships with some of the world's busiest airports by passenger traffic. Given the complex and lengthy regulatory requirements to meet standards across key regions, the competitive landscape is supportive, and developments in screening technology support future order book growth. Smiths Detection is well positioned to benefit from the continued roll-out of computed tomography (CT) scanning products in passenger baggage screening, along with the replacement cycle of older hold baggage screening equipment, combining it with diffraction technology, which materially reduces false alarm rates. Smiths Detection has a market share of about 10% in ports and borders, and the company thinks there is a significant opportunity to increase this share. Rising global trade, increasing scan rates, and border threats mean demand for its technology should rise, particularly due to the U.S. allocating $150 billion-$170 billion for border enforcement and other areas. Key competitors include Rapiscan and Nuctech, with the latter potentially less of a competitor for new business in the U.S. and Europe. The company has a market share of 10%-15% in urban security, and growth is expected to be driven by rising security requirements for data centers as well as schools (particularly in the U.S.) and event venues. The defense business currently contributes about 3% of revenue, with increased defense spending by the U.S. and NATO allies expected to support a growing order book. Smiths Detection relies on key contract renewals in the aviation business. Aviation is the biggest operating segment (74% of revenue in fiscal 2025) and the top 10 aviation customers account for 31% of total group revenue. There is a particular reliance on continually securing regulatory approval from, in particular, the Transportation Security Administration in the U.S. and the European Civil Aviation Conference, covering 44 European countries. Regulatory-driven technology updates will support new long-term contracts, but there is some risk to a high proportion of revenue if potential execution missteps or project failures hinder regulatory approvals. S&P notes Smiths Detection's strong record of receiving renewed regulatory approvals. In its ports and borders, urban security, and defense businesses, the top 10 customers account for 3%-4% of Smiths Detection's total revenue. The group's revenue is geographically well diversified, with about 34% from the U.S., 7% from the U.K., and 5% or below from other regions in fiscal 2025. S&P said, "We project only marginal revenue growth in fiscals 2026-2027, though a new technology replacement cycle should support higher growth in fiscal 2028, enabling Smiths Detection to benefit from a high share of aftermarket services revenue. We expect revenue growth of about 4%-5% in fiscal 2026, followed by growth of 1%-2% in fiscal 2027 and about 7%-10% in fiscal 2028. The slowdown in growth in fiscal 2027 comes from a contraction in expected revenue in aviation by approximately 8%-10%, as the passenger checkpoint CT technology upgrade cycle slows, with original equipment deliveries reducing. Marginal revenue growth in the business will be driven by expected growth in original equipment from the other businesses, particularly in the ports and borders segment, and will be supported by aftermarket revenue. Aftermarket services contributed about half of revenue in fiscal 2025, and we expect continued solid contributions given a high installed base and new machinery deliveries. In fiscal 2028, we expect revenue growth to be driven by original equipment sales in aviation, followed by sales of new diffraction technology and the associated aftermarket benefits. "We expect profitability to improve gradually, as the share of revenue from aftermarket services rises, though we note that one-off costs could be higher than anticipated post-transaction if the new ownership leads to increased restructuring. We expect adjusted EBITDA margins to rise to about 14.5%-15.0% in fiscal 2026 from 14.7% in fiscal 2025, 15.7%-16.2% in fiscal 2027, and above 16.5% in fiscal 2028. This is based on expected improving gross margins in the aftermarket business, driven by mid-life upgrades and new installations. Aftermarket gross margins were 39.1% in fiscal 2025, versus original equipment margins of 16.6%. The gross margins for original equipment are expected to improve but a slower rate, driven by new diffraction technology. We currently expect about GBP10 million-GBP15 million of one-off/restructuring costs per year until fiscal 2028, higher than management's current forecasts. The separation process carries lower execution risk--given that Smiths Detection already operates as a stand-alone unit within the Smiths Group--but we note that increased restructuring activity, which could arise post-completion, could weigh on the group's profitability, pressuring its key credit metrics. "We expect Smiths Detection to generate marginal FOCF in fiscal 2027, rising in fiscal 2028. FOCF is likely to take a hit in fiscal 2027 compared to previous years since it is the first full year that incorporates the new capital structure, with cash interest costs in particular expected to rise. We expect about GBP5 million-GBP15 million of FOCF, which is also weighed on by high working capital outflows of GBP40 million-GBP50 million. This is due to rising inventory levels linked to key longer-term projects, particularly with the rollout of new technologies and replacement products. Despite expected working capital outflows of GBP20 million-GBP30 million in fiscal 2028, largely due to inventory impacts, we project FOCF to rise to GBP40 million-GBP60 million, supported by rising profitability. We expect capital expenditure (capex) to remain relatively steady over this period, at about GBP15 million. The focus will mainly be on maintenance capex, with very limited growth capex, which has reduced materially in recent years. "EBITDA expansion should support gradual deleveraging to 6.5x-7.0x in fiscal 2027 and below 6.0x in fiscal 2028. Post-transaction, we expect adjusted gross debt of about GBP1.1 billion, comprising the new GBP1,040 million-equivalent TLB, lease liabilities of about GBP23 million, and pension-related adjustments of about GBP36 million. We assume the GBP170 million RCF will remain undrawn. We expect FFO cash interest coverage of about 2.0x in fiscal 2027 and marginally higher coverage in fiscal 2028. "Geopolitical factors could have some impact on the group's operating performance, in our view. We think there is a high degree of unpredictability around policy implementation by the U.S. administration and possible responses--specifically with regard to tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. The U.S. is Smiths Detection's largest market, but we think most of the impact can be mitigated. Production is typically locally sourced, and products for the U.S. are mainly produced in the U.S. It also has manufacturing sites in the U.K., France, Malaysia, and Germany, allowing regional distribution, and has localized aftermarket services. We forecast that tariffs will impact adjusted EBITDA by about GBP4 million-GBP7 million in fiscals 2026 and 2027. "We think there is a high degree of unpredictability around the duration and scale of the Middle East war, and its potential effect on commodity prices, supply chains, economies, and credit conditions. This could affect Smiths Detection through potentially reduced airport traffic and consequent delays in customers upgrading existing machinery, as well as some associated aftermarket servicing. However, this is not expected to materially affect Smiths Detection's top line. "The final ratings will depend on our receipt and satisfactory review of all final documentation and the final terms of the separation transaction. The preliminary ratings should therefore not be construed as evidence of final ratings. If we do not receive the final documentation within a reasonable timeframe, or if the final documentation departs from the materials and terms reviewed, we reserve the right to withdraw or revise the ratings. Potential changes include, but are not limited to, the utilization of proceeds, maturity, size and conditions of the facilities, financial and other covenants, security, and ranking. "The stable outlook reflects our view that Smiths Detection will gradually expand its topline and reduce leverage over the next 12-18 months, with revenue for the fiscal year ending July 31, 2027 of marginally more than GBP1 billion, S&P Global Ratings-adjusted EBITDA margins of 15.7%-16.2%, marginally positive free operating cash flow (FOCF), and funds from operations (FFO) to cash interest coverage close to 2.0x. "We could lower our rating if restructuring costs are higher than expected once the transaction completes, resulting in adjusted debt to EBITDA remaining above 7.0x without material signs of improvement, or if FFO to cash interest coverage trends sustainably closer to 1.5x. This could also occur with a more aggressive financial policy. "We see the possibility of an upgrade over our forecast horizon as relatively limited. However, we could raise our ratings if stronger performance leads to improving profitability such that adjusted debt to EBITDA decreases below 5.0x, with FFO cash interest coverage trending toward 2.5x. We would also expect to see sustained positive free cash flow generation and adequate liquidity, with adjusted EBITDA margins improving meaningfully from fiscal 2026 levels." STAINLESS STEEL: RSM UK Appointed as Joint Administrators --------------------------------------------------------- Stainless Steel Vessels Limited, trading as SSV Limited, was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number CR-2026-486. Lee Lockwood and James Miller of RSM UK Restructuring Advisory LLP were appointed as Joint Administrators on May 12, 2026. The company was involved in brewing equipment and the installation of industrial machinery and equipment. Its registered office and principal trading address is Unit 8 Swinnow View, Leeds, LS13 4TZ The Joint Administrators can be contacted at: Lee Lockwood James Miller RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds LS1 4DL Further information: Tel: 0113 285 5000 Contact: The Joint Administrators Case Manager: Ryan Marsh RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds LS1 4DL TEC RECRUITMENT GROUP: RSM UK Appointed as Administrators --------------------------------------------------------- The TEC Recruitment Group Limited was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number CR-2026-468. Lee Lockwood and James Miller of RSM UK Restructuring Advisory LLP were appointed as Joint Administrators on May 1, 2026. The company was involved in management consultancy activities (other than financial management). Its registered office and principal trading address is 9 Greyfriars Road, Reading, RG1 1NU. The Joint Administrators can be contacted at: Lee Lockwood James Miller RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds LS1 4DL For further information, contact: Contact: Usman Sheikh Tel (case manager): 0113 285 5094 Tel (Joint Administrators): 0113 285 5000 WORDUNITED LTD: FRP Advisory Appointed as Joint Administrators -------------------------------------------------------------- Wordunited Ltd was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Court Number CR-2026-000449. Mark Hodgett and David Antony Willis of FRP Advisory Trading Limited were appointed as Joint Administrators on May 8, 2026. The company specialized in wholesale and retail of children's books and toys. Its registered office is Unit 4, Tunstall Arrow South, James Brindley Way, Stoke-On-Trent, ST6 5GF and is in the process of being changed to c/o FRP Advisory Trading Limited, Minerva, 29 East Parade, Leeds, LS1 5PS. Its principal trading address is Unit 4, Tunstall Arrow South, James Brindley Way, Stoke-On-Trent, ST6 5GF. The Joint Administrators can be contacted at: Mark Hodgett David Antony Willis FRP Advisory Trading Limited Minerva 29 East Parade Leeds LS1 5PS For further information, contact: Alternative contact: Usman Khan Tel: 0113 831 3555 Email: cp.leeds@frpadvisory.com Contact: The Joint Administrators XL SCAFFOLDING: Opus Restructuring Appointed as Administrators -------------------------------------------------------------- XL Scaffolding Limited was placed into administration in the High Court of Justice, Business and Property Courts in Birmingham, Insolvency & Companies List (ChD), Court Number CR-2026-000224. Mark Siddall and Colin David Wilson of Opus Restructuring LLP were appointed as Joint Administrators on May 14, 2026. The company specialized in scaffold erection. Its registered office and principal trading address is Unit 17 Aston Business Park, Shrewsbury Avenue, Peterborough, Cambridgeshire, PE2 7BF. The Joint Administrators can be contacted at: Mark Siddall Colin David Wilson Opus Restructuring LLP 1 Radian Court Knowlhill Milton Keynes MK5 8PJ Further information: Alternative contact: Theo Skipper Tel: 01908 087220 Contact: The Joint Administrators ZENITH AVIATION: Nexus Corporate Appointed as Administrator ----------------------------------------------------------- Zenith Aviation Limited was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number CR-2026-LDS-000520. Paul Hargreaves of Nexus Corporate Solutions Limited was appointed as Administrator on May 15, 2026. The company specialized in the repair and maintenance of aeroplanes. Its registered office is 62 Grosvenor Street, London, England, W1K 3JF. Its principal trading address is Building 529, Churchill Way, Biggin Hill, Westerham, London, TN16 3BN. The Administrator can be contacted at: Paul Hargreaves Nexus Corporate Solutions Limited Apex Building 1 Water Vole Way Balby Doncaster South Yorkshire DN4 5JP For further information, contact: Contact: Lee Adams Tel: 01302 430180 Email: la@nexuscorporatesolutions.co.uk ********* 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 * * *