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260806.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 Thursday, August 6, 2026, Vol. 27, No. 156 Headlines G E R M A N Y IHO VERWALTUNGS: Moody's Affirms 'Ba2' CFR, Outlook Now Stable IRIS HOLDCO: Moody's Withdraws 'Caa1' Corporate Family Rating I R E L A N D CONTEGO CLO VI: S&P Assigns B- (sf) Rating to Class F-R Notes MARGAY CLO I: S&P Affirms B- (sf) Rating on Class F-R Notes S P A I N IM PASTOR 4: Moody's Ups Rating on EUR886MM Class A Notes to Ba3 LUGO FUNDING 2026-1: S&P Assigns B (sf) Rating to Class F Notes U N I T E D K I N G D O M 42 BLUEBELL WAY: Begbies Traynor Appointed as Administrators AIRA FORCE 2026-1: Moody's Assigns B1 Rating to GBP3.71MM G Notes BIGAS MARKETING: CG&Co Appointed as Joint Administrators EVENT TRAFFIC: Cromwell Insolvency Appointed as Administrator GR8CONNECT LTD: Parker Getty Appointed as Administrator HORGAN HOMES: KR8 Advisory Tapped as Joint Administrators NEEDAN LIMITED: Mackay Goodwin Appointed as Joint Administrators TRIOTEC LIMITED: JT Maxwell Appointed as Administrator VMED O2 UK: S&P Alters Outlook to Negative, Affirms 'B+' ICR - - - - - ============= G E R M A N Y ============= IHO VERWALTUNGS: Moody's Affirms 'Ba2' CFR, Outlook Now Stable -------------------------------------------------------------- Moody's Ratings has affirmed the Ba2 long-term corporate family rating, the Ba2 senior secured instrument ratings and the Ba2-PD probability of default rating of IHO Verwaltungs GmbH (IHO-V or the group). Concurrently, Moody's have changed the outlook to stable from negative. "The change in outlook to stable is driven by the expected extraordinary shareholder distributions from Continental AG (Continental), which IHO-V can use to reduce debt, interest expenses and improve its market value-based net leverage (MVL) ratio", said Matthias Heck, a Moody's Ratings Senior Vice President - Ratings and Lead Analyst for IHO-V. "The affirmation at Ba2 balances the group's already relatively low leverage and good liquidity with its still relatively weak interest cover", added Mr. Heck. RATINGS RATIONALE On July 04, Continental announced its intention to distribute around EUR2.5 billion of proceeds from the ContiTech disposal to its shareholders. IHO-V holds a 36% stake in Continental and Moody's expects it to collect around EUR900 million in the first half 2027 (before withholding tax), when distributions are likely, either in the form of a special dividend, or a combination of special dividends and share buybacks. IHO-V has not commented on the use of Continental's shareholder returns. However, the group will gain material financial flexibility to reduce debt and interest expense, so a downgrade within the next 12-18 months has become unlikely. At the end of March 2026, IHO-V's debt was around EUR3.4 billion. Based on share prices as of 22 July, IHO-V's MVL was around 29%, which is already relatively low compared with Moody's range of 30%-40% for the Ba2 rating. The MVL has improved from 36% at the time when Moody's previously affirmed the rating in September 2025. IHO-V's funds from operations/interest cover has been below Moody's expectations of 2.0x-2.5x for the Ba2 rating. In 2025, it was only around 1.2x. For 2026, Moody's expects an improvement to around 1.5x due to a combination of higher ordinary dividends from Continental and Schaeffler AG (Schaeffler), in which IHO-V has a 69% stake, and lower interest payments following a refinancing transaction in April. Excluding the one-off cost of the refinancing, the FFO/interest cover under the current funding structure would improve to around 1.7x. Using proceeds from Continental's shareholder distributions for debt reduction could result in material interest cost savings. Considering the average interest rate on IHO-V's next debt maturities (2029) of around 6.6%, the group's interest cover could improve to levels comfortably in line with Moody's range for the Ba2 rating. Moody's outlook on the global automotive industry is negative, and Moody's expects broadly flat global light vehicle production levels for this year and next year. Higher-than-expected pressure at the level of key OEM customers, especially at Schaeffler but also Continental, could, however, constrain the companies' abilities to pay dividends to IHO-V in 2027 and beyond, which represents a downside risk to Moody's expectations. The Ba2 CFR reflects IHO-V's strengths, including its large size; the ownership of sizeable stakes in three high-quality listed assets; and good liquidity. Conversely, factors constraining the rating include some concentration risk from IHO-V's dependence on dividends from its subsidiaries, which are mostly active in the cyclical automotive industry currently under pressure, and which are undergoing transformational processes (especially Schaeffler and Aumovio SE); a lack of clearly defined financial policies aimed at preserving a conservative capital structure to offset the concentration risk; limited visibility around dividend payments required by the shareholder; limited reporting at IHO-V's standalone level; and consolidated leverage (debt/EBITDA) at still-elevated levels for the rating. ESG CONSIDERATIONS This rating action has been driven by the financial strategy and risk management of Continental, a key asset of IHO-V, which is planning to make a sizeable shareholder distribution following the disposal of ContiTech. LIQUIDITY IHO-V's liquidity is excellent. Supporting this assessment are the group's available internal cash sources, including cash and cash equivalents of around EUR20 million at the end of March 2026, and its undrawn EUR1.0 billion revolving credit facility due 2028. The facility contains a leverage covenant, under which Moody's expects IHO-V to maintain adequate capacity over the next 12-18 months. In the second quarter of 2026, IHO-V also collected around EUR380 million of dividends from Continental and Schaeffler. For the first half of 2027, Moody's expects EUR900 million extraordinary shareholder distributions from Continental, in addition to ordinary dividends from Continental and Schaeffler, which are usually paid in the second quarter. These funds together comfortably exceed the group's short-term cash needs, including regular holding costs and taxes, and expected interest payments of around EUR230 million. IHO-V has no major debt maturities until November 2029, following a refinancing transaction in April 2026. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade IHO-V's ratings if its (1) MVL sustainably exceeds 40%; (2) FFO interest cover remains below 2.0x on a sustainable basis; (3) Moody's adjusted debt/EBITDA remains above 3.0x (2024: 3.5x) and Moody's adjusted EBITA margin fails to recover to above 8% for a prolonged period of time (2024: 4.5%), both based on INA-Holding Schaeffler GmbH & Co. KG statements that fully consolidate Schaeffler and Continental; or (4) liquidity deteriorates. An upgrade of IHO-V's ratings would require (1) a MVL of 30% or less, and (2) FFO interest cover above 2.5x on a sustainable basis. An upgrade would also require (3) Moody's adjusted debt/EBITDA to be sustained below 2.5x and Moody's adjusted EBITA margin to be improved to around 10%, both based on INA-Holding Schaeffler GmbH & Co. KG's financial statements that fully consolidate Schaeffler and Continental. An upgrade would also require (4) improved reporting at IHO-V level. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Automotive Suppliers published in November 2025. Based on INA-Holding Schaeffler GmbH & Co. KG's consolidated financial statements, the scorecard-indicated outcome is Baa3 for the 12 months that ended March 30, 2026 and Baa2 based on Moody's 12-18-month forward-looking view. The difference to the Ba2 CFR is explained by the existence of sizeable minority stakes; the structural subordination of IHO-V's debt to debt at Schaeffler and Continental levels; and the lack of clearly articulated conservative financial policies at the level of IHO-V. COMPANY PROFILE Headquartered in Herzogenaurach, Germany, IHO-V is a holding company that owns 69% of the share capital in Schaeffler, 36% in Continental and 36% in Aumovio SE. All are leading automotive suppliers in Europe. IHO-V is ultimately owned through a holding structure by two members of the Schaeffler family. IRIS HOLDCO: Moody's Withdraws 'Caa1' Corporate Family Rating ------------------------------------------------------------- Moody's Ratings has withdrawn all the ratings of Iris HoldCo GmbH (Rodenstock or the company), including its Caa1 long-term corporate family rating, its Caa1-PD probability of default rating (PDR) and the Caa1 ratings of the backed senior secured term-loan B (TLB) maturing in 2028 and of the backed senior secured revolving credit facility (RCF) maturing in 2027, borrowed by Rodenstock Group GmbH. At the time of withdrawal, the outlook on both entities was stable. RATINGS RATIONALE Moody's have decided to withdraw the rating(s) following a review of the issuer's request to withdraw its rating(s). Iris HoldCo GmbH is the parent company of Rodenstock, an ophthalmic lens producer focusing primarily on the progressive lenses segment, with leading positions in Germany and other Western European markets. ============= I R E L A N D ============= CONTEGO CLO VI: S&P Assigns B- (sf) Rating to Class F-R Notes ------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Contego CLO VI DAC's class A-R, B-R, C-R, D-R, E-R, and F-R notes. At closing, the issuer had EUR41.7 million unrated subordinated notes outstanding from the existing transaction and also issued EUR1.38 billion unrated subordinated notes. Subject to an extraordinary resolution of the existing subordinated noteholders, the existing and the additional subordinated notes will be subject to an exchange for EUR40 million new subordinated notes. This transaction is a reset of the already existing transaction which S&P did not rate. The existing classes of notes were fully redeemed with the proceeds from the issuance of the replacement notes on the reset date. The ratings on the original notes have been withdrawn. The reinvestment period will be approximately 4.51 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payments. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,866.25 Default rate dispersion 519.55 Weighted-average life (years) 4.29 Weighted-average life (years) extended to cover the length of the reinvestment period 4.51 Obligor diversity measure 142.52 Industry diversity measure 20.45 Regional diversity measure 1.36 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 170 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.75 Target 'AAA' weighted-average recovery (%) 36.01 Actual weighted-average spread net of floors (%) 3.63 Actual weighted-average coupon (%) 3.42 Rationale S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. "The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR400.00 million target par amount, the target weighted-average spread of 3.63%, the target weighted-average coupon of 3.42%, and the target weighted-average recovery rate at all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R, C-R, and D-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes." The class A-R and E-R notes could withstand stresses commensurate with the assigned ratings. The class F-R notes' current break-even default rate cushion is negative at the assigned rating. S&P said, "Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including our long-term corporate default rates and recent economic outlook, we believe this class is able to sustain a steady-state scenario, in accordance with our criteria." S&P's analysis further reflects several factors, including: -- The class F-R notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- S&P's model-generated portfolio default risk, which is at the 'B-' rating level at 25.48% (for a portfolio with a weighted-average life of 4.51 years) versus 14.43% if it was to consider a long-term sustainable default rate of 3.2% for 4.51 years. -- Whether the tranche is vulnerable to nonpayment in the near future. -- If there is a one-in-two chance for this note to default. -- If S&P envisions this tranche to default in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with the assigned 'B- (sf)' rating. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for all rated classes of notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A-R to E-R notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the scenario analysis results for the class F-R notes." Environmental, social, and governance S&P regards the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with its benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and S&P's ESG benchmark for the sector, no specific adjustments have been made in its rating analysis to account for any ESG-related risks or opportunities. Contego CLO VI DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. Five Arrows Managers LLP manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate A-R AAA (sf) 248.00 38.00 Three/six-month EURIBOR plus 1.29% B-R AA (sf) 44.00 27.00 Three/six-month EURIBOR plus 1.82% C-R A (sf) 24.00 21.00 Three/six-month EURIBOR plus 2.05% D-R BBB- (sf) 28.00 14.00 Three/six-month EURIBOR plus 3.15% E-R BB- (sf) 18.00 9.50 Three/six-month EURIBOR plus 5.95% F-R B- (sf) 12.00 N/A Three/six-month EURIBOR plus 8.77% Sub notes NR 40.00 N/A N/A *The ratings assigned to the class A-R and B-R notes address timely interest and ultimate principal payments. S&P's ratings address ultimate interest and principal payments on the rest of the other rated notes. The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. Sub notes--Subordinated notes. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. MARGAY CLO I: S&P Affirms B- (sf) Rating on Class F-R Notes ----------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Margay CLO I Funding DAC's A-R-R Loan and class A-R-R, B-R-R, C-R-R, D-R-R, and E-R-R notes. At the same time, S&P affirmed its rating on the existing class F-R notes and withdrew its ratings on the original class A-R, A-1-R Loan, A-2-R Loan, B-R, C-R, D-R, and E-R notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over the Euro Interbank Offered Rate (EURIBOR) than the original notes. The ratings on the refinanced notes and loan reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,698.87 Default rate dispersion 583.77 Weighted-average life (years) 4.39 Obligor diversity measure 147.76 Industry diversity measure 21.83 Regional diversity measure 1.19 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 3.76 Actual 'AAA' weighted-average recovery (%) 36.24 Actual weighted-average spread (net of floors; %) 3.44 Actual weighted-average coupon (%) 3.47 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end on July 15, 2029. S&P said, "The portfolio is well diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we have conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used a EUR395.42 million adjusted target par collateral principal amount, which is lower than the target par amount of EUR400.0 million. This takes into account the total principal balance, the principal proceeds and the recoveries from the defaulted assets as of the July 2026 trustee report. We used the portfolio's actual weighted-average spread (3.44%), the actual weighted-average coupon (3.47%), and the actual portfolio weighted-average recovery rates for all rated notes. "We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our counterparty criteria. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R-R, C-R-R, and D-R-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these refinanced notes." For the A-R-R Loan and the class A-R-R and E-R-R notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with the assigned ratings. The class F-R notes' current break-even default rate (BDR) cushion is negative at the 'B-' rating level. S&P said, "Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including our long-term corporate default rates and recent economic outlook, we believe this class can sustain a steady-state scenario, in accordance with our criteria." S&P's analysis reflects several factors, including: -- Their available credit enhancement is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- S&P's BDR at the 'B-' rating level is 16.82% versus a portfolio default rate of 14.05% if it was to consider a long-term sustainable default rate of 3.2% for a portfolio with a weighted-average life of 4.39 years. -- Whether the tranche is vulnerable to nonpayment. -- If there is a one-in-two chance of this tranche defaulting. -- If S&P envisions this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with the assigned 'B- (sf)' rating. "Considering our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A-R-R to F-R notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the A-R-R Loan and class A-R-R to E-R-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Margay CLO I Funding DAC is a cash flow CLO securitizing a portfolio of primarily senior secured leveraged loans and bonds. M&G Investment Management Ltd. manages the transaction. Ratings assigned Replacement Original Notes notes Credit Amount interest interest enhancement Class Rating* (mil. EUR) rate§ rate (%)† A-R-R AAA (sf) 198.00 Three-month Three-month 37.28 EURIBOR EURIBOR + 1.23% + 1.30% A-R-R AAA (sf) 50.00 Three-month Three-month 37.28 Loan EURIBOR EURIBOR + 1.23% + 1.30% B-R-R AA (sf) 41.00 Three-month Three-month 26.91 EURIBOR EURIBOR + 1.81% + 2.05% C-R-R A (sf) 23.00 Three-month Three-month 21.10 EURIBOR EURIBOR + 2.05% + 2.60% D-R-R BBB- (sf) 28.00 Three-month Three-month 14.02 EURIBOR EURIBOR + 2.95% + 3.55% E-R-R BB- (sf) 22.00 Three-month Three-month 8.45 EURIBOR EURIBOR + 5.65% + 6.00% Rating affirmed Amount Class Rating* (mil. EUR) Notes interest rate§ F-R B- (sf) 10.00 Three-month EURIBOR + 8.93% *The ratings assigned to the class A-R-R notes, A-R-R Loan and B-R-R notes address timely interest and ultimate principal payments. The ratings on the class C-R-R, D-R-R, E-R-R, and F-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. †Based on a target par collateral principal amount of EUR395.42 million. EURIBOR--Euro Interbank Offered Rate. ========= S P A I N ========= IM PASTOR 4: Moody's Ups Rating on EUR886MM Class A Notes to Ba3 ---------------------------------------------------------------- Moody's Ratings has upgraded the rating of one note in IM Pastor 4, FTA. The notes are backed by residential loan contracts originated by Banco Pastor, S.A. and serviced by Banco Santander, S.A. (Spain) (A1/P-1). Moody's affirmed the ratings of the notes that had sufficient credit enhancement to maintain their current ratings. EUR886M Class A Notes, Upgraded to Ba3 (sf); previously on Apr 26, 2013 Downgraded to B2 (sf) EUR17.9M Class B Notes, Affirmed Ca (sf); previously on Nov 23, 2012 Downgraded to Ca (sf) EUR9.2M Class C Notes, Affirmed C (sf); previously on Nov 23, 2012 Downgraded to C (sf) EUR6.9M Class D Notes, Affirmed C (sf); previously on Nov 23, 2012 Downgraded to C (sf) RATINGS RATIONALE The rating action is prompted by an increase in credit enhancement for the affected tranche. Increase in Available Credit Enhancement Higher than expected recoveries from the sale of repossessed properties, combined with sequential amortization, have increased the level of credit enhancement available in the transaction. Since March 2025 the issuer has received approximately EUR9 million of recoveries from the sale of repossessed properties. These recoveries reduced the principal deficiency ledger (PDL) to EUR23.1 million from EUR29.4 million and, consequently, increased the credit enhancement available to the Class A notes, the tranche affected by the upgrade action, to 14.4% from 4.9% over the same period. The transaction is subject to structural negative excess spread because interest collections from the mortgage pool and the swap receipts are insufficient to cover interest due on the notes and payments due under the swap. As these obligations rank senior to principal amortization in the transaction's priority of payments, any resulting shortfalls increase the PDL. The magnitude of the negative excess spread is primarily driven by the size of the PDL relative to the pool balance and the weighted average coupon of the notes. As a result, the Class A notes remain sensitive to the future path of interest rates, the timing and amount of recoveries available to reduce the PDL, and prepayment levels. Revision of Key Collateral Assumptions As part of the rating action, Moody's reassessed Moody's lifetime loss expectation for the portfolio reflecting the collateral performance to date. The performance of the transactions has remained stable since 1 year ago. 90 days plus arrears currently stand at 0.84% of current pool balance showing a stable trend over the past year. Cumulative defaults currently stand at 10.62% of original pool balance, up from 10.60% a year earlier. Based on the observed performance to date, Moody's maintained the expected loss assumption as a percentage of current pool balance at 2.84%. The revised expected loss assumption corresponds to 5.87% as a percentage of original pool balance (previously 5.89%). Moody's reassessed loan-by-loan information to estimate the loss Moody's expects the portfolio to incur in a severe economic stress scenario. Moody's have maintained the MILAN Stressed Loss assumption at 9.10%. The principal methodology used in these ratings was "Residential Mortgage-Backed Securitizations" published in October 2024. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement and (3) improvements in the credit quality of the transaction counterparties. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. LUGO FUNDING 2026-1: S&P Assigns B (sf) Rating to Class F Notes --------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Lugo Funding 2026-1 DAC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd notes, and A loan. At closing, the issuer also issued unrated class Z and X notes. S&P said, "Our ratings address timely receipt of interest and ultimate repayment of principal on the class A notes and A loan and the ultimate payment of interest and principal on the other rated notes. Our ratings also address timely payment of interest due when the deferrable notes become the most senior outstanding class." Unpaid interest will not accrue additional interest and will be due at the notes' legal final maturity. Credit enhancement for the rated notes comprises collateralization and the reserve fund. The reserve fund is fully funded at closing and provides mainly liquidity support for the payment of senior fees and interest due on the class A notes and A loan. Any excess of the cash reserve over its required amount provides credit support. Lugo Funding 2026-1 DAC is a static RMBS transaction. The pool comprises EUR560.16 million mostly reperforming residential mortgage loans secured on properties in Spain. The loans were originated by various commercial, specialized, and savings banks in Spain, which have now been consolidated into Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). S&P said, "We consider the issuer to be a bankruptcy-remote entity, and we have received legal opinions indicating that the sale of the assets would survive the seller's insolvency. We also received tax opinions that set out the issuer's tax liabilities under the current tax legislation." BBVA is limited to a master servicer role without prejudice to those non-delegable duties as issuer of the participaciones hipotecarias and certificados de participaciones hipotecarias (PHs and CTHs). Pepper Spanish Servicing S.L.U. is the servicer and will conduct all servicing activities, including primary and special servicing, such as arrears management, restructuring, recoveries, and real estate owned management. The application of our structured finance sovereign risk criteria does not constrain the ratings, and the documented replacement mechanisms adequately mitigate the transaction's exposure to counterparty risk in line with S&P's current counterparty criteria. Ratings Class Rating* Class size (%) A loan AAA (sf) 18.10 A AAA (sf) 48.00 B-Dfrd§ AA (sf) 5.85 C-Dfrd§ A (sf) 4.25 D-Dfrd§ BBB (sf) 2.45 E-Dfrd§ BB (sf) 2.00 F-Dfrd§ B (sf) 1.10 Z NR 19.44 X NR N/A *S&P's ratings address timely receipt of interest and ultimate repayment of principal on the class A notes and A loan and the ultimate payment of interest and principal on the other rated notes. S&P's ratings also address timely payment of interest due when the deferrable notes become the most senior outstanding class. §Any deferred interest is due at maturity. Dfrd--Deferrable. NR--Not rated. N/A--Not applicable. =========================== U N I T E D K I N G D O M =========================== 42 BLUEBELL WAY: Begbies Traynor Appointed as Administrators ------------------------------------------------------------ 42 Bluebell Way Ltd 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-2026-005779. Andrew Little and Gillian Margaret Sayburn of BTG Begbies Traynor (Central) LLP were appointed as Joint Administrators on July 23, 2026. The company specialized in business services and property services. Its registered office is at Ground Floor, Portland House, 54 New Bridge Street West, Newcastle upon Tyne, NE1 8AP. Its principal trading address is Fcls Group, B1 Vantage Office Park, Old Gloucester Road, Hambrook, Bristol, BS16 1GW. The Administrators can be contacted at: Andrew Little Gillian Margaret Sayburn BTG Begbies Traynor (Central) LLP Ground Floor Portland House 54 New Bridge Street West Newcastle upon Tyne NE1 8AP Further details contact: Rheanne Chalmers Tel: 0191 269 9820 Email: rheanne.chalmers@btguk.com AIRA FORCE 2026-1: Moody's Assigns B1 Rating to GBP3.71MM G Notes ----------------------------------------------------------------- Moody's Ratings has assigned definitive ratings to Notes issued by Aira Force 2026-1 PLC: GBP191.61M Class A Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned Aaa (sf) GBP13.60M Class B Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned Aa1 (sf) GBP12.36M Class C Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned Aa2 (sf) GBP8.65M Class D Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned A2 (sf) GBP6.80M Class E Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned Baa2 (sf) GBP6.80M Class F Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned Ba2 (sf) GBP3.71M Class G Mortgage Backed Floating Rate Notes due January 2072, Definitive Rating Assigned B1 (sf) GBP9.89M Class X Floating Rate Notes due January 2072, Definitive Rating Assigned Ba3 (sf) Moody's have not assigned a rating to GBP3.71M Class H Mortgage Backed Floating Rate Notes due January 2072. The definitive ratings assigned to Class G and Class X are one notch higher than the provisional ratings of (P)B2 (sf) and (P)B1 (sf), respectively. The upgrades reflect the benefit of an increase in excess spread. RATINGS RATIONALE The Notes are backed by a static pool of UK second-lien residential mortgage loans originated by UK Mortgage Lending Ltd ("UKMLL", NR), owned by Pepper Money (PMB) Limited. The portfolio of assets amount to approximately GBP197.2 million as of 30th June pool cutoff date. There will be a pre-funding period between the issue date up to the second interest payment date, which could see the pool increase up to GBP247.2 million, in line with pre-funding criteria. The transaction benefits from a liquidity reserve fund which is zero at closing and at any other time equal to the greater of 1.0% of the outstanding Classes A or B Notes and is initially funded by the principal proceeds. The liquidity reserve fund will be available to cover senior fees and costs, and Classes A and B interest. After the liquidity reserve fund reaches its target, it will be replenished from the interest collections thereafter. The liquidity reserve fund will be released down the principal waterfall as Class A and Class B Notes are paid down, ultimately providing credit enhancement for Classes A to G and Class H Notes. Credit enhancement for Class A Notes is provided by 22.5% subordination at closing, the liquidity reserve fund, and excess spread. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. The transaction benefits from various credit strengths such as a granular portfolio and an amortising liquidity reserve. However, Moody's notes that the transaction features some credit weaknesses such as an unrated originator and servicer and the risk of spread compression due to product switches. Various mitigants have been included in the transaction structure to mitigate the operational risk. To ensure payment continuity over the transaction's lifetime, the transaction documents incorporate estimation language whereby the cash manager Citibank, N.A., London Branch (Aa3(cr)/P-1(cr)) can use the most recent servicer reports to determine the cash allocation in case no servicer report is available. The transaction also benefits from approximately 2 months of liquidity provided by the reserve fund. The liquidity does not cover any class of Notes except for the Class A and Class B Notes in the event of financial disruption of the servicer, capping the achievable ratings of the Class C to Class G Notes. Additionally, there is an interest rate risk mismatch between the 98.2% of loans in the pool that are fixed rate, of which 95.0% revert to the SVR plus a contractual margin, and the Notes which are floating rate securities with reference to compounded daily SONIA. To mitigate this mismatch there will be a scheduled notional fixed-floating interest rate swap provided by Banco Santander, S.A. (Spain) (A2(cr)/P-1(cr)). Moody's determined the portfolio lifetime expected loss of 3.5% and MILAN Stressed Loss of 20.0% related to borrower receivables. The expected loss captures Moody's expectations of performance considering the current economic outlook, while the MILAN Stressed Loss captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. Expected loss and MILAN Stressed Loss are parameters used to calibrate Moody's lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model to rate RMBS. Portfolio expected loss of 3.5%: This is higher than the UK non-conforming RMBS sector average and is based on Moody's assessments of the lifetime loss expectation for the pool taking into account: (i) all of the loans in the pool having a second charge over the properties with a higher than average proportion of loans having CLTV greater than 85%; (ii) the current macroeconomic environment in the United Kingdom; and (iii) benchmarking with similar transactions in the UK non-conforming sector. MILAN stressed loss for this pool is 20.0%, which is higher than the UK non-conforming RMBS sector average and follows Moody's assessments of the loan-by-loan information, taking into account: (i) WA CLTV of 71.5%, which is higher than the UK owner-occupied average; (ii) all of the loans in the pool having a second charge over the properties with a higher than average proportion of loans having CLTV greater than 85%; (iii) the originator and servicer assessment; and (iv) the percentage of self-employed borrowers in the pool of 16.6%. The principal methodology used in these ratings was "Residential Mortgage-Backed Securitizations" published in October 2024. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Factors that would lead to an upgrade or downgrade of the ratings: Factors that may cause an upgrade of the ratings of the Notes include significantly better than expected performance of the pool together with an increase in credit enhancement of Notes. Factors that would lead to a downgrade of the ratings include: (i) increased counterparty risk leading to potential operational risk of (a) servicing or cash management interruptions and (b) the risk of increased swap linkage due to a downgrade of a swap counterparty ratings; and (ii) economic conditions being worse than forecast resulting in higher arrears and losses. BIGAS MARKETING: CG&Co Appointed as Joint Administrators -------------------------------------------------------- Bigas Marketing Ltd was placed into administration in the High Court of Justice, Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number CR-2026-MAN-001119. Edward M Avery-Gee and Daniel Richardson of CG&Co were appointed as Joint Administrators on July 27, 2026. The company specialized in advertising agencies and specialist design activities. Ita registered office is at One Oaks Court, Warwick Road, Borehamwood, WD6 1GS. Following appointment, the registered office is c/o CG&Co, 27 Byrom Street, Manchester, M3 4PF. The principal trading address is Unit C, St Georges Business Centre, Weybridge, KT13 0TS. The Joint Administrators can be contacted at: Edward M Avery-Gee Daniel Richardson CG&Co 27 Byrom Street Manchester M3 4PF Further details contact: Stephanie Adams Tel: 0161 358 0210 Email: info@cg-recovery.com EVENT TRAFFIC: Cromwell Insolvency Appointed as Administrator ------------------------------------------------------------- Event Traffic Control Ltd was placed into administration in the High Court of Justice, Business and Property Courts, Insolvency & Companies List (ChD), Court Number CR-2026-005507. Kieran Bourne of Cromwell Insolvency Limited was appointed as Administrator on July 27, 2026. The company specialized in transportation support activities. Its registered office is at c/o Cromwell Insolvency Limited, 13 Ensign Business Centre, Westwood Way, Coventry, CV4 8JA. Its principal trading address is Baldersby Gardens, Ripon Road, Baldersby, Thirsk, YO7 4PS. The Administrator can be contacted at: Kieran Bourne Cromwell Insolvency Limited 13 Ensign Business Centre Westwood Way Coventry CV4 8JA Further details contact: Jennifer Verdon Tel: 0800 061 4002 Email: info@cromwellinsolvency.co.uk GR8CONNECT LTD: Parker Getty Appointed as Administrator ------------------------------------------------------- GR8Connect Ltd 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-2026-005603. Farheen Qureshi of Parker Getty Limited was appointed as Administrator on July 24, 2026. The company specialized in temporary employment agency activities. Its registered office and principal trading address is 2 The Future Works, Brunel Way, Slough, England, SL1 1FQ. The Administrator can be contacted at: Farheen Qureshi Parker Getty Limited Devonshire House 582 Honeypot Lane Stanmore Middx HA7 1JS Tel: 020 3475 3900 Email: PG-team@parkergetty.co.uk Alternative contact: E Popat HORGAN HOMES: KR8 Advisory Tapped as Joint Administrators --------------------------------------------------------- Horgan Homes (Mareham Le Fen) Ltd 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-2026-005161. Lauren Wentworth and James Saunders of KR8 Advisory Limited were appointed as Joint Administrators on July 23, 2026. The company specialized in the development of building projects. Its registered office is at c/o KR8 Advisory Limited, The Lexicon, 10–12 Mount Street, Manchester, M2 5NT. Its principal trading address is Suite 2 Ash House, Halesowen Road, Lydiate Ash, Bromsgrove, B61 0QL. The Joint Administrators can be contacted at: Lauren Wentworth KR8 Advisory Limited 7th Floor 20 St Andrew Street London EC4A 3AG -- and -- James Saunders KR8 Advisory Limited The Lexicon 10–12 Mount Street Manchester M2 5NT Further details contact: The Joint Administrators Email: caseenquiries@kr8.co.uk Alternative contact: Arvin Ashtab NEEDAN LIMITED: Mackay Goodwin Appointed as Joint Administrators ---------------------------------------------------------------- Needan Limited (formerly Needanwood Limited) was placed into administration in the High Court of Justice, Business and Property Courts in Leeds, Company and Insolvency List, Court Number CR-2026-LDS-000776. Stuart Kelly and Claire Harsley of Mackay Goodwin Limited were appointed as Joint Administrators on July 24, 2026. The company specialized in the letting and operating of own or leased real estate. Its registered office and principal trading address is Fatboys Catering, Building Station Road, Long Marston, Stratford-upon-Avon, CV37 8RP. The Joint Administrators can be contacted at: Stuart Kelly Claire Harsley Mackay Goodwin Limited 7 Smithford Walk Prescot Liverpool L35 1SF Further details contact: Adam Farnworth Tel: 0151 739 2398 Email: advice@mackaygoodwin.co.uk TRIOTEC LIMITED: JT Maxwell Appointed as Administrator ------------------------------------------------------ Triotec Limited was placed into administration in the High Court of Justice, Business & Property Court, Court Number 000724 of 2026. Andrew Ryder of JT Maxwell Limited was appointed as Administrator on July 21, 2026. The company specialized in machining. Its registered office and principal trading address is 27 Stirling Close, Pattinson South Industrial Estate, Washington, NE38 8QD. The Administrator can be contacted at: Andrew Ryder JT Maxwell Limited Unit 1 Lagan House 1 Sackville Street Lisburn Co Antrim BT27 4AB Further details contact: JT Maxwell Limited Tel: 02892 448 110 Email: corporate@jtmaxwell.co.uk VMED O2 UK: S&P Alters Outlook to Negative, Affirms 'B+' ICR ------------------------------------------------------------ S&P Global Ratings revised its outlook on VMED O2 UK Ltd. to negative from stable and affirmed the 'B+' issuer credit rating. S&P also affirmed issue ratings on the group's senior secured and senior unsecured debt. The negative outlook reflects increasing uncertainty around S&P's base case assumption of stable earnings in 2027 as the U.K. telecom market continues to remain intensely competitive and is driving pressure on average revenue per user (ARPU) and net subscriber additions. VMO2 O2 UK Ltd.'s second-quarter results reflect persistent pricing pressure and elevated churn in fixed and mobile consumer segments, which continue to weigh on earnings and lead to growing uncertainty regarding the company's ability to stabilize EBITDA by 2027. Continued decline in EBITDA beyond this year would push S&P Global Ratings-adjusted leverage above 6x and weaken cash flow generation, which is outside the range for the current 'B+' rating. S&P said, "Our current base case continues to factor in the expectation that, in spite of these pressures, VMO2 will maintain stable earnings in 2027 backed by successful expansion into the business-to-business (B2B) small and midsize enterprises (SME) segment via the Daisy Group integration, continued growth in wholesale, and cost-cutting critical to offsetting moderating consumer segment declines. "We revised our outlook to negative to reflect the increasing risk of credit metrics breaching downside thresholds if earnings do not stabilize in 2027. Our base case factors in expectations that EBITDA will stabilize in 2027, but there is increasing uncertainty around this assumption." While first-half-2026 operating performance aligned with management's cautious guidance, the trajectory toward EBITDA stabilization in 2027 is becoming increasingly uncertain. Operating key performance indicators (KPIs) like consumer net subscriber additions showed higher decline in the second quarter of 2026 compared with the first quarter. Current operating KPIs, specifically negative net subscriber additions in consumer mobile (-54,300) and fixed (-28,200) segments in the second quarter, underscore the severity of the competitive landscape in U.K. The company reported a 3.2% organic EBITDA decline in the first half of 2026, driven by aggressive pricing competition and elevated churn across mobile and fixed consumer segments. Although the reported decline was a shallower 1.1% year on year due to the Daisy Group acquisition, the underlying organic erosion highlights significant headwinds in the U.K. market. S&P said, "Prospective S&P Global Ratings-adjusted leverage will approach our downside rating threshold (6x) in FY 2026 with a possibility of breaching the threshold if EBITDA does not stabilize in 2027. At the same time, we would expect free operating cash flow (FOCF) after leases to be muted due to elevated capital expenditure (capex). If EBITDA fails to stabilize in 2027 and continues to decline, a downgrade could be follow. "Our current base case expects stabilizing EBITDA in 2027 and growth thereafter, which will foster modest deleveraging in the future years. Beyond 2026, we expect earnings to stabilize, supported by growth in B2B and wholesale, moderation of the decline in the consumer segment, and cost-cutting. We expect broadly flat revenue and EBITDA in 2027, and 1%-3% growth in 2028. This reflects our expectations of marginal decline in the consumer segment being offset by growth in B2B and wholesale. We expect the competitive landscape to remain intense, but would not expect further deterioration in the competitive intensity. As such, we expect the decline in the consumer segment to moderate in 2027 to around 0% to -2%. We project 5%-7% growth in the B2B segment from 2027, driven by the streamlining of the B2B product portfolio this year. This includes building partner networks to target the SME segment, and the expanded product suite from the Daisy Group, which is particularly strong in the SME segment. Both of these developments should stimulate growth within this fragmented market. Beyond 2027, the expiration of the three-year price cap related to the Vodafone-Three merger in 2028 would lead to a rationalization of promotional intensity in the mobile market, which would enable VMED O2's mobile service revenue to return to growth in 2028. "The announced transaction between nexfibre and Substantial is structurally complex but we expect it to be broadly leverage neutral. As part of the transaction, VMED O2 will receive about £1 billion from nexfibre for transferring 4.6 million lines to nexfibre. VMED O2 intends to use the proceeds to reduce gross debt. That said, the positive impact on leverage will likely be offset by the higher wholesale access fees VMED O2 would pay to nexfibre. Over the longer run, this could entail operating expenditure and capex savings and facilitate market repair by kick-starting consolidation in a highly fragmented fiber market in the U.K. However, given the limited disclosure around the details of this transaction and execution risks associated with this structurally complex deal, we have excluded from our forecasts the potential long-term benefits indicated by management. "We expect our adjusted FOCF (after leases) to remain muted in the near term, due to high capex investments in the mobile and fixed networks. We expect annual FOCF (after leases) of around £200 million to £350 million over the next few years, which is materially lower than the historical FOCF after leases generation of £722 million in 2023. We attribute the decline in FOCF to higher capex investment and declining EBITDA. Capex intensity is high as the company continues to upgrade its hybrid fiber-coaxial network to fiber and continues to increase the density of the 5G network." VMED O2 has managed to upgrade 9 million of the 18.8 million clients' homes to fiber. The current plan is to upgrade the entire network to fiber, which will lead to elevated capex of 20%-22% of sales for the next few years. VMED O2 has inorganic levers to deleverage the business, but the execution remains unclear. Both shareholders have made public comments around reviewing operating-cost reduction measures, capex efficiencies, and broader organic/inorganic tools to increase free cash flow and reduce leverage. The precise nature and timing of these initiatives is unclear. As such, S&P does not account for these in its base case. If these are executed and it leads to improvement in credit metrics, it could alleviate the potential for downside in our base case. S&P said, "We continue to view VMED O2 a highly strategic asset for Liberty Global. VMED O2 generates the majority of the group's revenue and EBITDA and should continue to affect its share performance. VMED O2 is jointly controlled by Liberty Global and Telefonica S.A., and any support will need to be applied by both companies. Given the concentration of earnings and cash flows at VMED O2, we believe VMED O2 is an almost integral asset for the Liberty Global group, and we believe the group would support it under almost all foreseeable scenarios as long as it is able to provide such support. However, the joint venture ownership structure and lack of full control limits us from equalizing our rating on VMED O2 with that on Liberty Global." The negative outlook reflects increasing uncertainty around company's ability to stabilize earnings in 2027 as the U.K. telecom market continues to remain intensely competitive, driving pressure on ARPU and net subscriber additions for VMED O2. S&P could downgrade VMED O2 if EBITDA continues to decline in 2027 without offsetting debt-reduction measures. This could happen if: -- There is pressure from lower ARPU due to increased pricing competition; -- There is a fall in subscribers driven by increased churn to competitors, and not offset by cost-cutting measures; or -- VMED O2 undertakes significantly higher debt-funded capex. Specifically, S&P could lower the rating if VMED O2 displays: -- S&P Global Ratings-adjusted debt to EBITDA exceeding 6x; or Negative FOCF after leases and vendor financing on a sustained basis. -- S&P could revise the outlook to stable if adjusted debt to EBITDA starts to fall below 6x on a sustained basis. This should be supported by improving operating performance, including growing earnings and cash flows, such that FOCF to debt (after leases) approaches 2%. ********* 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. 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