TCREUR_Public/100317.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

           Wednesday, March 17, 2010, Vol. 11, No. 053

                            Headlines



C Z E C H   R E P U B L I C

SAZKA AS: S&P Junks Long-Term Corporate Credit Rating From 'B-'


F R A N C E

RENAULT SA: Valuation Differences Hamper Daimler Share Swap Talks
RENAULT TRUCKS: Wants to Extend State-Subsidized Shutdown
WINDERMERE XII: Fitch Affirms 'CC' Ratings on 5 Classes of Notes


G E R M A N Y

ARCANDOR AG: Eyes Karstadt Sale by End of April
BRENNTAG HOLDING: Aims to Raise EUR837 Million in IPO
JOBO AG: Files for Insolvency in Cologne


I R E L A N D

FREE SPIRIT: High Court Orders Liquidation of Five Salons
GS EUROPEAN: Fitch Withdraws CCC Ratings on Two Classes of Notes
IPOS GROUP: Uniphar Appoints Goodbody to Sell Pharmacy Stakes
SYSTEMHOUSE TECHNOLOGIES: In Liquidation; Owes EUR2 Million


L U X E M B O U R G

BREEZE FINANCE: S&P Downgrades Rating on Class A Bonds to 'BB-'
PROLOGIS EUROPEAN: Moody's Gives Stable Outlook on Corp. Rating


R U S S I A

AEROFLOT OJSC: Fitch Assigns 'BB+' Issuer Default Rating


U K R A I N E

RODOVID BANK: Provisional Administration Extended Until May 15


U N I T E D   K I N G D O M

BRITISH AIRWAYS: Union Wants Settlement Proposal Reinstated
CAM EUROPEAN: Goes Into Liquidation
FUTURE ENVIRONMENTAL: Bought Out of Administration by EEG
GRAPHITE MORTGAGES: S&P Junks Rating on Class E Notes From 'BB'
KEYDATA INVESTMENT: Meteor Walks Away From Sale Negotiations

LLOYDS BANKING: S&P Downgrades Preference Share Rating to 'C'
MISSOURI TOPCO: Moody's Assigns 'Ba2' Corp. Family Rating
PUNCH TAVERNS: Fitch Downgrades Ratings on All Classes of Notes


X X X X X X X X

* S&P Corrects Ratings on Seven European Synthetic CDO Tranches




                         *********



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C Z E C H   R E P U B L I C
===========================


SAZKA AS: S&P Junks Long-Term Corporate Credit Rating From 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term corporate credit rating on Czech Republic-based gaming
company SAZKA a.s. to 'CCC+' from 'B-'.  The senior secured debt
rating on the company's EUR215 million amortizing bonds maturing
in 2021 was also lowered to 'CCC+' from 'B-'.  At the same time,
the CreditWatch listing on all the ratings was revised to
developing from negative, where they were placed on Nov. 25, 2009.

The downgrade reflects S&P's view of the lack of progress in
SAZKA's negotiations with some existing lenders to replace its
outstanding, separate, short-term bilateral facilities with a
medium-term secured credit line.

Prolonged negotiations highlight a significant execution risk, in
S&P's view.  S&P believes that the extended support of bank
lenders is critical for SAZKA to maintain liquidity, and therefore
constitutes a primary rating risk.  This is especially true in
light of the payment of approximately Czech koruna
(CZK) 350 million, including both interest and principal, on the
senior secured bonds due in July 2010.  As of Sept. 30, 2009, S&P
understands that SAZKA's credit facilities were drawn by
CZK1.75 million.

S&P aims to resolve the CreditWatch placement once there is
clarity on the refinancing of SAZKA's short-term debt or, in any
event, within the next three months.  S&P could lower the rating
if the refinancing were not to materialize, creating potential for
further tightening of SAZKA's liquidity position.  On the other
hand, a positive rating action could result if SAZKA were to
secure the necessary funding to improve its liquidity position.


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F R A N C E
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RENAULT SA: Valuation Differences Hamper Daimler Share Swap Talks
-----------------------------------------------------------------
Renault SA and Daimler AG have been unable to resolve differences
over valuations as the carmakers explore a share swap that would
bring Daimler into the Renault- Nissan alliance, Jacqueline
Simmons, Chris Reiter and Laurence Frost at Bloomberg News report,
citing two people familiar with the matter.

According to Bloomberg, the people said Daimler and Renault, which
said in December they were in talks about jointly developing small
cars, have also been discussing an exchange of shares.

Daimler is seeking a partner to improve profitability of its
Mercedes A-Class and Smart cars by sharing development of vehicles
and engines, Bloomberg notes.

Bloomberg relates Sanford C. Bernstein analyst Max Warburton wrote
in a report Tuesday an equity tie-up would bring "financial and
strategic security" to Renault.

Bloomberg notes Philippe Houchois, an analyst at UBS AG in London
who has "buy" ratings on Renault and Daimler shares, said a
partnership between the French and German carmakers on compact
models makes "a lot of sense" by allowing them to share costs and
technology, while a cross-shareholding could tie up resources.

Renault SA -- http://www.renault.com/-- is a France-based company
primarily engaged in the manufacture of automobiles and related
services.  The Company has two main areas of business activity:
the Automobile division, which handles the design, manufacture and
marketing of passenger cars and commercial vehicles, under
Renault, Renault Samsung Motors and Dacia brands, and the Sales
Financing division, which provides financial and commercial
services related to the Company's sales activities, and is
comprised of RCI Banque and its subsidiaries.  The Company
operates worldwide via a group of subsidiaries and dependant
companies, including wholly owned Renault SAS, 99.43%-owned Dacia,
44.3%-owned Nissan Motor and 20.7%-owned AB Volvo, among others.

                           *     *     *

Renault SA continues to carry long- and short-term corporate
credit and debt ratings of 'BB/B' from Standards & Poor's Ratigns
Services with stable outlook.  The ratings were lowered to their
current level from 'BBB-/ A-3' in June 2009.

As reported by the Troubled Company Reporter-Europe on June 23,
2009, S&P said Renault's financial profile was already hit by the
large increase in debt in 2008, and credit measures were weak
compared with what S&P generally considers to be commensurate with
a 'BBB-' rating.  Now, however, in light of S&P's views on the
future path of European auto demand, S&P believes that the
company's financial metrics are likely to deteriorate further and
will probably not return in the medium term to levels S&P
considers consistent with the previous rating.

"Our downgrade of Renault reflects our view that auto demand is
likely to remain very low in Europe in 2010, due to the weak
economic environment and the payback effect of the incentive
schemes that several European countries have adopted to date in
2009," said Standard & Poor's credit analyst Barbara Castellano.
"We believe these factors will continue to penalize Renault's
profitability."


RENAULT TRUCKS: Wants to Extend State-Subsidized Shutdown
---------------------------------------------------------
Laurence Frost at Bloomberg News reports that Volvo AB may need
more government support in France, where its Renault Trucks unit
is lagging behind a global recovery and aid conditions rule out
job cuts until late 2012.

According to Bloomberg, Volvo spokesman Bernard Lancelot said
Friday in an interview Renault Trucks wants to extend a state-
subsidized partial shutdown for several months and may seek
further help after the program reaches a 12-month legal limit in
September.

Volvo's French unit is already in a third government-funded
slowdown, with its 10,500 employees working a three-day week for
95% of their salary, Bloomberg notes.

"Renault Trucks is more exposed to France, Italy and Spain, so
it's in a very tough situation and recovery may take some time,"
Bloomberg quoted Michael Andersson, an analyst at Stockholm- based
Evli Bank, which has a "reduce" recommendation on Volvo shares, as
saying.

Bloomberg notes French aid conditions have restricted Volvo's room
for maneuvering at Renault Trucks by barring job eliminations.
Workers returning to full-time status from a subsidized slowdown
"can't be fired for twice the same period again," Mr. Lancelot, as
cited by Bloomberg, said.  That makes compulsory job cuts
impossible before October 2012 once the current program has
reached its limit, Bloomberg states.

                       About Renault Trucks

Renault Trucks is a unit of Gothenburg, Sweden-based Volvo AB
(OTC:VOLVY) -- http://www.volvo.com/-- is a supplier of
commercial transport solutions providing products, such as trucks,
buses, construction equipment, drive systems for marine and
industrial applications, as well as aircraft engine components.
The Company is also engaged in providing financial services.


WINDERMERE XII: Fitch Affirms 'CC' Ratings on 5 Classes of Notes
----------------------------------------------------------------
Fitch Ratings has affirmed Windermere XII FCC's notes, removed
them from Rating Watch Negative and assigned Negative Outlooks to
note classes A and B, as detailed below.

  -- EUR776m class A due July 2017: affirmed at 'BBB-'; removed
     from RWN; Outlook Negative

  -- EUR3,000 class X due July 2017: affirmed at 'AAA'; Outlook
     Stable

  -- EUR317.4m class B due July 2017: affirmed at 'B'; removed
     from RWN; Outlook Negative

  -- EUR126.6m class C due July 2017: affirmed at 'CCC'; Recovery
     Rating of 'RR5'

  -- EUR39.2m class D due July 2017: affirmed at 'CC'; Recovery
     Rating of 'RR6'

  -- EUR80.8m class E due July 2017: affirmed at 'CC'; Recovery
     Rating of 'RR6'

  -- EUR81.3m class F due July 2017: affirmed at 'CC'; Recovery
     Rating of 'RR6'

  -- EUR38.7m class G due July 2017: affirmed at 'CC'; Recovery
     Rating of 'RR6'

  -- EUR59m class H due July 2017: affirmed at 'CC'; Recovery
     Rating of 'RR6'

The affirmations reflect the broadly unchanged income profile at
Coeur Defense, the transaction's single collateral asset, since
the last review in August 2009.  The class A and class B notes had
been placed on RWN pending the outcome of the High Court decision
on the 'procedure de sauvegarde' and the 'Cession Dailly'.  As
both legal cases have recently been resolved in favor of note
holders, the notes have been removed from RWN.  Fitch understands
that the borrower has a right to appeal the overturning of its
safeguard status as well as the Dailly decision within two months
of the final ruling and will continue to monitor this situation.
Given the unfavorable prospects of and uncertainty relating to
Coeur Defense's occupancy rate and income profile, the class A and
B notes have been assigned Negative Outlooks.

The reported securitized loan to value ratio, based on a March
2009 valuation, is 132.4%, which is significantly in breach of the
80% LTV covenant.  The breach first took place in October 2008,
and the borrower has been in default since that time.  Fitch
currently estimates a securitized LTV of 142%.  The severity of
the decline in the value of Coeur Defense over a relatively short
time frame highlights the level of income deterioration the asset
has experienced since closing.  At the time of Fitch's August 2009
review, income had already fallen 29% since closing in August
2007, with a further six tenants expected to vacate in June 2010.
Once these tenants vacate, gross rental income will fall a further
38% to EUR54.6 million if no new lettings are agreed in the
interim.  This would leave the asset's occupancy rate at 55% with
a WA unexpired lease term of 1.5 years by the third quarter of
this year.

Approximately EUR70 million of funds previously trapped in an
escrow account have been released to the issuer.  Fitch
understands that discussions are currently ongoing with regards to
the appropriate distribution of these funds, with possibilities
including key property maintenance, repayment of amounts drawn
under the liquidity facility and the purchase of an interest rate
cap.

Fitch employed its criteria for European CMBS surveillance to
analyze the quality of the transaction's underlying commercial
real estate loan.


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G E R M A N Y
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ARCANDOR AG: Eyes Karstadt Sale by End of April
-----------------------------------------------
Holger Elfes at Bloomberg News reports that Arcandor AG aims to
sell its Karstadt department-store chain by the end of April.

Bloomberg relates administrator Klaus Hubert Goerg said in an e-
mailed statement Monday he registered a four-stage insolvency plan
at the local court in Essen, under which Karstadt would continue
to operate with new owners, securing about 26,000 jobs.

According to Bloomberg, Mr. Goerg said in the statement creditors
and workers have contributed a "triple-digit million-euro amount"
to the insolvency plan.

Bloomberg notes the statement shows the creditors, mainly
suppliers, landlords and service providers, will receive 3% of
what they claim they are owed, as soon as court approval is given
for the insolvency plan, the statement shows.

The administrator, as cited by Bloomberg, said he expects Karstadt
to be sold by the end of September.

Arcandor, Bloomberg says, has asked Merrill Lynch & Co. to find a
buyer for Karstadt.  Six investment firms are considering bids for
the approximate 100 stores, Bloomberg discloses.

                        About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


BRENNTAG HOLDING: Aims to Raise EUR837 Million in IPO
-----------------------------------------------------
Brenntag Holding GmbH aims to raise as much as EUR837 million
(US$1.15 billion) in an initial public offering, Elisa Martinuzzi
and Aaron Kirchfeld at Bloomberg News report, citing
two people familiar with the discussions.

According to Bloomberg, the people said the company plans to sell
shares for 46 euros to 56 euros each.  Bloomberg relates the
people said Brenntag plans to offer 10.5 million new shares and
2.5 million existing shares.  A further 1.95 million shares may be
sold if the over-allotment option is exercised in full, Bloomberg
notes.

Bloomberg says Brenntag plans to use the money raised in the IPO
to expand in emerging markets and finance acquisitions.

Brenntag Holding GmbH & Co. KG -- http://www.brenntag.com/-- is
Europe's largest chemical distributor (ahead of Univar) and among
the top three in the US (along with the likes of Ashland); it also
ranks as the top distributor in Latin America.  From its 400
locations in 60 countries, Brenntag offers lab services (blending,
compounding, preparation), storage, and logistics activities.
Among the companies whose products Brenntag supplies are global
giants like Arkema, BASF, and Yara.  Its industrial and specialty
chemicals serve the oil and gas, cosmetics, coatings, plastics,
mining, and pulp and paper industries.  European private equity
group BC Partners owns Brenntag.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 3,
2010, Standard & Poor's Ratings Services said that it had placed
all of its ratings, including its 'B+' long-term corporate credit
rating, on Germany-based chemical distributor Brenntag Holding
GmbH on CreditWatch with positive implications following a group
announcement that it plans to launch an IPO in the near term and
use the proceeds towards debt reduction.

S&P's '2' recovery ratings on Brenntag's senior secured debt and
'6' recovery ratings on its second-lien notes remain unchanged,
indicating S&P's expectation for substantial recovery (70%-90%)
and neglible recovery (0-10%), respectively, for lenders in an
event of payment default.

"The CreditWatch placement reflects the near-term possibility of
an improved credit profile if the group is successful with its IPO
plans," said Standard & Poor's credit analyst Per Karlsson.

A successful IPO, together with conversion of a shareholder loan
to equity, would suggest that the group's debt levels will be
reduced materially from an adjusted EUR2.7 billion in September
2009 to a pro-forma figure of about EUR1.5 billion.  If the IPO
and loan conversion take place, the group's prospective credit
measures point to a credit profile several notches above the
current 'B+' rating.

The current rating is constrained by Brenntag's highly leveraged
debt structure, which is a result of its private equity ownership
and strong growth focus in recent years.  This is partly is offset
by what S&P consider to be a 'satisfactory' business risk profile,
as evidenced by the group's recent resilient operating
performance.


JOBO AG: Files for Insolvency in Cologne
----------------------------------------
Michael R. Tomkins at The Imaging Resource, citing
InsolvenzRatgeber and Computer Bild, reports that Gummersbach,
Germany-based JOBO AG and its sister company Jobo Labortechnik
GmbH & Co. KG have filed a petition for insolvency in the Cologne
District Court.

The report relates the court has appointed Cologne attorney Hans-
Gerd Jauch as interim administrator, responsible for determining
whether formal insolvency proceedings will now begin.

The report notes an article from The Computer Bild suggests that
further adjustment of the company's product range is likely,
should it relaunch after the insolvency process is completed.

Founded in 1923 by Johannes Bockemuehl, JOBO became well-known for
its darkroom gear including a wide range of processors, enlargers,
dryers, tanks, drums and accessories, according to The Imaging
Resource.


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I R E L A N D
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FREE SPIRIT: High Court Orders Liquidation of Five Salons
---------------------------------------------------------
Tim Healy at Irish Independent reports that the High Court has
ordered the winding up of five hair and beauty salons in the 'Free
Spirit' group.

Four of the salons are in Dublin, while the fifth is in Co Louth,
the report notes.

According to the report, the court heard the Revenue Commissioners
were owed more than EUR630,000 for unpaid VAT and PAYE/PRSI, the
court heard.

The report relates Ms. Justice Mary Laffoy on Monday said she was
satisfied to appoint Padraic Bermingham as liquidator to the five
companies in the group as they were clearly insolvent and unable
to pay their debts to Revenue.

The five companies in question are Free Spirit Hair and Beauty
Salon Ltd. at the IFSC, Free Spirit City West Ltd., Free Spirit
Drogheda Ltd., Free Spirit Dundrum Ltd. and Free Spirit Sandyford
Ltd., the report discloses.

Free Spirit Hair and Beauty Salon Ltd. at Dublin's IFSC was
established in 2004, and claimed it was the only business in
Ireland that offered a completely holistic approach to hair,
beauty, nails and health, according to Irish Independent.


GS EUROPEAN: Fitch Withdraws CCC Ratings on Two Classes of Notes
----------------------------------------------------------------
Fitch Ratings has withdrawn the ratings for GS European
Performance Fund's class D, E and F notes following an investor-
initiated liquidation of the portfolio assets that started in
March 2010.  The agency has not taken any rating action on class
A, B and C notes.

Goldman Sachs International, the transaction manager, expects the
total proceeds from the sale of the portfolio assets, cash from
the accounts balances and Goldman Sach's unfunded guarantee to be
sufficient to fully repay classes A, B and C.  However, the full
repayment of class D will be dependent on the ultimate
realizations from the sale of the portfolio assets.  Classes E and
F are expected to be impaired.  GSI intends to settle all the
trades and distribute all proceeds to the noteholders by June
2010.

Fitch has withdrawn the ratings of the class D, E and F notes as
the ratings do not address investor actions.  In this instance,
the investor action is expected to lead to the impairment of the
class E and F notes and possibly the class D notes, while class A,
B and C are expected to be fully repaid.

The ratings of the respective classes are:

  -- Class A: 'AAA'; Outlook Stable
  -- Class B: 'AA'; Outlook Stable
  -- Class C: 'BBB'; Outlook Stable
  -- Class D: Withdrawn at 'B'
  -- Class E: Withdrawn at 'CCC'
  -- Class F: Withdrawn at 'CCC'


IPOS GROUP: Uniphar Appoints Goodbody to Sell Pharmacy Stakes
-------------------------------------------------------------
Ian Kehoe at The Sunday Business Post reports that drug firm
Uniphar has appointed Goodbody Corporate Finance to sell its
shares in almost 150 pharmacies affiliated to independent pharmacy
ownership scheme.

Uniphar has minority stakes in each of the outlets in the troubled
scheme, with the remaining equity held by the individual
pharmacists, the report discloses.

According to the report, Uniphar, which has already taken a EUR98
million writedown on the value of its investment in Ipos, has told
Goodbody to offer each pharmacist the opportunity to buy out its
stake in the first instance.

Individual sales are expected to be completed over the coming
months, the report says.

In cases where a sale cannot be agreed, it is expected that
Uniphar will retain its equity holding in the medium term, the
report notes.

Citing the Sunday Business Post Online, the Troubled Company
Reporter-Europe reported on Feb. 24, 2010, that Bank of Scotland
(Ireland)  seized up to 40 properties to reduce its exposure to
Ipos.  The Post.ie said the bank installed Paul McCann, a
partner at Grant Thornton accountants, as receiver to a number of
companies in the Ipos scheme, including Nish Property, Ipos
Property Holding and Ipos 19 Property.  The Post.ie recalled KPMG
accountant Kieran Wallace was appointed liquidator to the three
main holding companies in the scheme.  During a series of
creditors' meetings, it emerged that the businesses could leave a
shortfall of as much as EUR240 million when they were wound up,
the Post.ie noted.  The Post.ie said the bank advanced more than
EUR35 million to funds in the Ipos scheme, which were used to help
pharmacists buy their own outlets.  The scheme has struggled in
light of the economic downturn, with man pharmacists unable to pay
dividends or meet interest repayments, the Post.ie recounted.


SYSTEMHOUSE TECHNOLOGIES: In Liquidation; Owes EUR2 Million
-----------------------------------------------------------
Dick O'Brien and Ian Kehoe at The Sunday Business Post report that
Systemhouse Technologies has gone into liquidation.

According to the report, the company, which racked up debts of
almost EUR2 million, has stopped trading with the loss of 15 jobs,
following a High Court petition by Dublin-based technology
distribution firm Commtech Distribution, one of the company's
creditors.

The liquidator, David van Dessel of Kavanagh Fennell, is
attempting to find a trade buyer for the business, the report
says.

Systemhouse is an Irish technology security company.  It is part
of the Top Security Group, which is owned by former Leinster rugby
player Emmet O'Rafferty, according to The Sunday Business Post.


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L U X E M B O U R G
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BREEZE FINANCE: S&P Downgrades Rating on Class A Bonds to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered to
'BB-' from 'BB' its long-term underlying debt rating on the
EUR287 million class A secured bonds, due in 2027, issued by
Luxembourg-based special-purpose vehicle Breeze Finance S.A., and
placed the rating on CreditWatch with negative implications.  At
the same time, the 'CC' long-term debt rating on the EUR87 million
class B subordinated bonds, due 2027, were put on CreditWatch with
negative implications.

The 'BB+' long-term rating on the class A secured bonds remains
unaffected, reflecting what S&P sees as an unconditional and
irrevocable guarantee of payment of scheduled interest and
principal provided by MBIA U.K.  Insurance Ltd. (BB+/Negative/--).

The recovery rating on the class A secured bonds remains unchanged
at '2', indicating S&P's expectation of substantial (70%-90%)
recovery of principal (in the absence of an insurance guarantee)
in the event of a payment default.

"The downgrade of the class A secured bonds reflects S&P's view on
the deterioration of Breeze's cash flow generation during the
2009-2010 winter months, due to continued poor wind conditions,"
said Standard & Poor's credit analyst Vincent Allilaire.

Breeze Three is a special-purpose entity that raised funds for a
wind-power partnership comprising 43 wind farms in Germany and
France with a total installed capacity of 347.4 megawatts.  The
majority of the wind farms (91% of the installed capacity) are
located in Germany.

"S&P expects to resolve the CreditWatch status within the next
three months, during which time S&P will closely monitor the
evolution of the project's operating performance and liquidity
situation," said Mr. Allilaire.

If cash flow generation does not improve substantially during this
period, further downgrades could occur: On the one hand, S&P could
lower the class A debt rating to the 'B' category if S&P sees
increasing chances that the DSRA is going to be used.  On the
other hand, if and when the class B notes are deferred, S&P will
downgrade this debt class rating to 'C' in application of its
criteria.


PROLOGIS EUROPEAN: Moody's Gives Stable Outlook on Corp. Rating
---------------------------------------------------------------
Moody's Investors Service has changed the outlook to stable from
negative for the corporate family rating of ProLogis European
Properties and the backed senior unsecured rating of debt issued
by its subsidiary ProLogis International Funding SA.  The Loss
Given Default assessment on the debt remains LGD4.

The rating outlook has been stabilized as PEPR's liquidity profile
is now adequate following closing of the refinancing of 2009 and
2010 debt maturities.  There continues to be limited headroom
under its 60% loan-to-value capital structure requirement, which
could tighten further when the portfolio is revalued at H1 2010,
with property values (as at FYE09) needing to fall by circa 8% to
reach the limit.  However, Moody's believes PEPR's management has
the means and the will to continue in its compliance with this
requirement.  The stable outlook also reflects Moody's expectation
that fixed charge cover will remain above 2.0x and total adjusted
debt and preferred equity to total assets will fall below 55% on a
sustainable basis.

The Ba1 CFR is supported by PEPR's prime logistics property
portfolio which is geographically diverse, well-located and
modern.  Despite the downturn in global trade, occupancy rates
have proven resilient and remain high, at around 96%.  The rating
also incorporates the fact that these occupancy levels have been
achieved through some rent reductions, which will have an impact
on the company's profitability in 2010.  Moody's therefore expect
a slight weakening of the company's fixed charge coverage over
2010 with a recovery the following year.  Mitigating this, a lack
of over-supply of competing products during the downturn is likely
to support occupancy, which Moody's expect to remain relatively
stable going forward.  Management's plan to continue reducing debt
levels by around EUR200 million over 2010 and 2011 means that
Moody's leverage ratio of total adjusted debt plus preferred
equity to gross assets is expected to continue its improving
trend.

Upward pressure on the rating could arise when (i) the headroom
for the 60% loan-to-value capital structure requirement returns to
more generous levels thereby further improving PEPR's liquidity
profile; (ii) leverage, assessed by Moody's as total adjusted debt
and preferred equity to total assets, reduces to 50% or less on a
sustainable basis; and (iii) fixed charge coverage is maintained
at 2.2x or better on a sustainable basis.

Negative rating pressure would occur from further earnings
deterioration, such that fixed charge coverage trends below 2.0x,
or values continue to fall such that Moody's leverage ratio moves
to 60%, or there are any liquidity challenges or covenant
breaches.  The latter could result in a multiple-notch downgrade.

Moody's last rating action was implemented on June 18, 2009, when
Moody's downgraded PEPR's issuer rating to Ba1 from Baa3 with
negative outlook.

Established in Luxembourg, PEPR is a Luxembourg-registered real
estate Fonds Commun de Placement.  It owns and manages industrial
properties across Europe.  At December 31, 2009, PEPR directly
held a portfolio of modern distribution facilities with a net
value of EUR2.8 billion.  The US-based REIT ProLogis has a stake
of at least 30.2% in PEPR's capital.


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R U S S I A
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AEROFLOT OJSC: Fitch Assigns 'BB+' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has assigned OJSC Aeroflot - Russian Airlines Long-
term foreign and local currency Issuer Default Ratings of 'BB+'
respectively.  Both ratings have Stable Outlooks.  Fitch also
assigned Aeroflot Short-term foreign and local currency IDRs of
'B', and senior unsecured foreign and local currency ratings of
'BB+'.  Aeroflot has additionally been assigned a National Long-
term rating of 'AA(rus)' with a Stable Outlook, and a National
Short-term rating of 'F1+(rus)'.

Aeroflot, the Russian flag carrier, is 51% directly owned by the
Russian Federation ('BBB'/Stable/'F3').  According to Fitch's
Parent and Subsidiary Rating Linkage Methodology, Aeroflot's
standalone rating benefits from a one-notch uplift provided by
parental support as strategic and operational ties between the
group and its parent, the state, are considered by Fitch to be
relatively strong.

The ratings reflect Aeroflot's strong position in scheduled air
passenger travel in Russia and its growing presence in
international markets, which together represented around 76% of
the group's total FY08 revenue.  Given Aeroflot's size and
operational scope compared with its domestic peers, Fitch expects
it to benefit in a commercially astute and profitable manner from
the government's plan to develop the airline sector to facilitate
domestic economic growth.

Aeroflot's credit profile deteriorated in 2008 under adverse
macro-economic conditions with total lease-adjusted leverage
increasing to 4.2x in 2008 from 2.8x in 2007 on the back of lower
EBITDA, mainly driven by significantly reduced traffic as a result
of the economic crisis, combined with high fuel prices in H108.
However, compared to European airline peers, Aeroflot's operating
performance has demonstrated a good degree of resilience to the
current downturn with an EBITDA margin sustained at a double digit
of 10.8% in 2008, which improved to 16.4% in the first three
quarters of 2009.  Aeroflot is among the few airlines in Europe
that was able to retain positive net income throughout the
downturn, partly due to the government enhanced fuel price policy
and a switch to a bidding system for fuel suppliers.  Fitch
expects the EBITDA margin to improve over the next three years as
a result of significant changes in its cost base, which involve
considerable staff and maintenance cost reductions, together with
a cost-efficiency improvement from adding more modern fuel-
efficient aircraft to its fleet.  These factors should more than
offset the expected increases in operating lease costs as a result
of this being the preferred means for new fleet financing.

The current ratings incorporate Aeroflot's flexible cost
structure, mainly due to a high proportion (84%) of its fleet
being under lease agreements (20% on finance leases and 64% on
operating leases).

The ratings also take into account that Aeroflot's
creditworthiness is constrained by its plans to pursue an
aggressive expansion strategy (fleet renewal, a new terminal, and
the potential Rosavia transaction), and its limited track record
of successful implementation of large scale projects without
jeopardizing credit metrics.  Fitch believes the company's
strategy is prone to significant execution risks, especially amid
current macro-economic conditions.

The Stable Outlook reflects Fitch's forecasts for Aeroflot which
show a progressive reduction in total adjusted leverage (excluding
Terminal debt) over the next 3 years to a sustainable level of 4x
by end of 2013, from a peak of above 5x at FYE10.  Sustained
leverage at this level is commensurate with a stable 'BB'
standalone rating for an entity with Aeroflot's business profile.
Free cash flow throughout Fitch's forecast period (2010-2013) is
also expected to stay positive as the company plans to spend
minimum sums on expansionary capex and dividend payouts.  Fitch
also expects the new management strategy to be carried out under
good financial discipline.  These medium-term forecasts assume an
economic recovery in Russia and prospective increases in global
air traffic demand driven by a revival of business class travel.
Any deviation from the forecast profile could have implications
for the future rating level.

Although Fitch acknowledges the positive aspects of Aeroflot's
relatively strong ties with the state, there is also a risk that
the state's influence on the company's development may result in
more aggressive consolidation plans and/or acquisition of non-core
or financially weaker assets at the expense of its credit profile.
Fitch treats such plans as event risk.

Aeroflot is the largest airline in Russia and the CIS region.
Three quarters of its US$4.6 billion total revenue in FY08 came
from the scheduled air passenger segment, of which one-third was
generated by domestic traffic and two-thirds by international
traffic.


=============
U K R A I N E
=============


RODOVID BANK: Provisional Administration Extended Until May 15
--------------------------------------------------------------
The National Bank of Ukraine has prolonged the provisional
administration at Rodovid Bank, until May 15, Ukrainian News
Agency reports, citing Serhii Scherbyna, the bank's provisional
administrator.

According to the report, the decision was taken to form managerial
bodies of the bank.

The report recalls central bank introduced provisional
administration into the bank in March 2009.

The regulator also introduced the moratorium for satisfaction of
demands of bank's creditors until September 15, the report notes.

Rodovid Bank is based in Kyiv.  The net assets of the bank were
estimated at UAH16,952.2 million as of January 1, 2010, the
credits and debts of clients were valued at UAH5,355.5 million,
and the equity of shareholders was estimated at UAH4,336.4
million, according to Ukrainian News Agency.


===========================
U N I T E D   K I N G D O M
===========================


BRITISH AIRWAYS: Union Wants Settlement Proposal Reinstated
-----------------------------------------------------------
Jim Pickard and Pilita Clark at The Financial Times report that
Unite, Britain's biggest trade union, offered on Monday night to
suspend a British Airways strike that would hit 30,000 passengers
a day from Saturday, March 20.

According to the FT, the union said it would look at calling off
the walkout if the airline reinstated a settlement proposal
withdrawn last week.

The FT relates Tony Woodley, Unite's joint general secretary, said
he was ready to suspend industrial action if Mr. Walsh put back
the offer he removed last Friday after Unite announced the strike
dates.

"Put the offer back on the table and we will look sensibly at
suspending the strike and we can hopefully find a long-term
solution to a very difficult subject," the FT quoted Mr. Woodley
as saying.

The FT recalls BA offered last week to restore 184 of the cabin
crew positions it planned to cut, a number that fell far short of
the 700 demanded by the union.  It withdrew the offer after the
union announced strike dates, the FT recounts.

According to the FT, BA said on Monday it would be able to operate
only 43% of flights during the first cabin crew strike period of
March 20-22, including all those between London and Newark airport
in the US, and 50% between London and JFK airport in New York.

This meant around 60% of passengers booked for those days would
still fly, or 45,000 each day, the FT states.  But Mr. Walsh said
he was unable to say how many flights would operate in a second
four-day stoppage due from March 27 until it was clear how many
cabin crew would work normally, the FT notes.

                      About British Airways

Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- http://www.ba.com/-- is
engaged in the operation of international and domestic scheduled
air services for the carriage of passengers, freight and mail and
the provision of ancillary services.  The Company's principal
place of business is Heathrow.  It also operates a worldwide air
cargo business, in conjunction with its scheduled passenger
services.  The Company operates international scheduled airline
route networks together with its codeshare and franchise partners,
and flies to more than 300 destinations worldwide.  During the
fiscal year ended March 31, 2009 (fiscal 2009), the Company
carried more than 33 million passengers.  It carried 777,000 tons
of cargo to destinations in Europe, the Americas and throughout
the world.  In July 2008, the Company's subsidiary, BA European
Limited (trading as OpenSkies), acquired the French airline,
L'Avion.

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Nov. 12,
2009, Moody's Investors Service placed the Ba3 Corporate Family
and Probability of Default Ratings of British Airways plc and the
senior unsecured and subordinate ratings of B1 and B2 under review
for possible downgrade.  Moody's said the rating action reflects
the continued weakening in profitability in the first half of
FY2010 (to September 2009), with an operating loss of GBP111
million reported versus a profit of GBP140 million a year earlier
(post restructuring charges), and Moody's view that losses in
FY2010 will likely be higher than in FY2009.  This comes in spite
of lower operating costs, notably for fuel, as demand in the
industry remains very depressed, while the company has
successfully reduced its employee and selling costs.  Reported net
debt remained constant during the period, partly benefiting from a
positive exchange rate impact, although Moody's debt metrics also
incorporate the full value of the convertible notes issued in
August 2009.


CAM EUROPEAN: Goes Into Liquidation
-----------------------------------
Chris Tindall at Roadtransport.com reports that CAM European
Logistics has gone into liquidation.

The report relates liquidator Fisher Partners says the company was
placed into liquidation following a meeting of creditors last
month.

"The company leased all of its kit; there are no assets and it is
unlikely creditors will be paid," the report quoted Andrew Lau, a
spokesman for Fisher Partners, as saying.

The report notes Suzanne Synowiec, wife of director Christopher
Synowiec, says the latest liquidation was caused by the stationery
producer Shawcross & Dickinson, going into administration: "We
were hit for GBP83,000 by our second biggest customer," Mrs.
Christopher Synowiec said, according to the report.

Royston, Herts-based CAM European Logistics has a license for 10
vehicles and 15 trailers, according to Roadtransport.com.


FUTURE ENVIRONMENTAL: Bought Out of Administration by EEG
---------------------------------------------------------
Jennifer Hill at The Scotsman reports that Euro Environmental
Group has acquired parts of Future Environmental Services for an
undisclosed sum, saving 120 jobs from its 210-strong workforce.

The report recalls Future Environmental was forced to call in
administrators on March 1.

"The straw that broke the camel's back was the bad winter weather
in Scotland, which led to cash flow problems," the report quoted
Paul Dounis, a restructuring partner at Begbies Traynor, the
administrator, as saying.

Based at Inchinnan, near Glasgow, Future Environmental Services
provides drainage and consultancy services to corporate clients,
local authorities and water utilities.


GRAPHITE MORTGAGES: S&P Junks Rating on Class E Notes From 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
notes from Graphite Mortgages PLC series 2005-2, and Graphite
Mortgages PLC series 2006-1.

Specifically, across the two transactions S&P:

* Removed from CreditWatch negative and lowered nine tranches;
* Lowered the ratings on four tranches; and
* Affirmed three tranches.

The actions follow S&P's credit analysis of the most recent loan
level information S&P has received for each transaction.

S&P has seen deterioration in the credit quality of the pools
since closing, and this, together with falling house prices, has
led to an increase in its probability of default and loss given
default assumptions.

Over the last year, S&P has seen an increase in losses leading to
the erosion of the threshold amount, which acts as a first-loss
piece.  For Graphite 2005-2, this has reduced to GBP8.6 million in
November 2009 from GBP14.7 million at closing, and for Graphite
2006-1 has reduced to EUR10.7 million in December 2009, from
EUR28.1 million.

S&P has also seen an increase in long-term delinquencies with 90+
day delinquencies for Graphite 2005-2 reaching 4.51% in November
2009, up from 2.67% in November 2008.  For Graphite 2006-1, long-
term arrears reached 6.43% in December 2009, up from 3.82% a year
earlier.  As a result, replenishment criteria are no longer
satisfied and both transactions are amortizing.  Graphite 2005-2
and Graphite 2006-1 started amortizing in April 2009 and February
2009, respectively.

In December 2009, Northern Rock PLC removed a large proportion of
loans from each deal in advance of the splitting of Northern Rock
into two separate companies: AssetCo and BankCo.  The Graphite
transactions are remaining with AssetCo.  Those loans which were
transferred to BankCo were removed from the deals.

                           Ratings List

      Ratings Removed From Creditwatch Negative and Lowered

                     Graphite Mortgages PLC
    GBP301.3 Million Floating-Rate Credit-Linked Notes Provide
                         Graphite 2005-2

                              Rating
                              ------
           Class       To               From
           -----       --               ----
           C           A-               AA/Watch Neg
           D1          BB+              BBB+/Watch Neg
           D2          B+               BBB/Watch Neg
           E           B-               BB/Watch Neg

                     Graphite Mortgages PLC
    EUR519.7 Million Floating-Rate Credit-Linked Notes Provide
                          Graphite 2006-1

                              Rating
                              ------
           Class       To               From
           -----       --               ----
           C1          BBB-             A/Watch Neg
           C2          BB+              A-/Watch Neg
           D1          B+               BBB/Watch Neg
           D2          B-               BBB-/Watch Neg
           E           CCC              BB/Watch Neg

                          Ratings Lowered

                      Graphite Mortgages PLC
    GBP301.3 Million Floating-Rate Credit-Linked Notes Provide
                         Graphite 2005-2

                              Rating
                              ------
           Class       To               From
           -----       --               ----
           B           AA-              AA+
           A2          AA+              AAA

                     Graphite Mortgages PLC
    EUR519.7 Million Floating-Rate Credit-Linked Notes Provide
                          Graphite 2006-1

                              Rating
                              ------
           Class       To               From
           -----       --               ----
           A           AA+              AAA
           B           A-               AA-

                         Ratings Affirmed

                      Graphite Mortgages PLC
    GBP301.3 Million Floating-Rate Credit-Linked Notes Provide
                          Graphite 2005-2

                        Class       Rating
                        -----       ------
                        A+          AAA
                        A1          AAA

                      Graphite Mortgages PLC
     EUR519.7 Million Floating-Rate Credit-Linked Notes Provide
                          Graphite 2006-1

                        Class       Rating
                        -----       ------
                        A+          AAA


KEYDATA INVESTMENT: Meteor Walks Away From Sale Negotiations
------------------------------------------------------------
Lorraine Cushnie at Professional Adviser reports that Meteor Asset
Management has walked away from negotiations to buy the structured
products books of Keydata Investment Services Ltd.

The report recalls the Meteor had conducted due diligence on the
business and agreed a purchase price with administrator
PricewaterhouseCoopers when it pulled out earlier this month.

According to the report, it is understood Meteor was frustrated by
drawn-out negotiations and a last-minute attempt to increase the
asking price.  It was thought to be the only company still
interested in acquiring the assets, the report notes.

Meteor first expressed an interest in acquiring the Keydata
business when it was forced into administration last year, the
report recounts.

As reported by the Troubled Company Reporter-Europe, Dan
Schwarzmann and Mark Batten of PricewaterhouseCoopers LLP were
appointed joint administrators of Keydata on June 8, 2009.  The
appointment was made based on an application to court by the
Financial Services Authority on insolvency grounds.

Keydata Investment Services Ltd. designs, distributes and
administers structured investment products.  Keydata operates from
three locations, being London, Glasgow and Reading and administers
its own products as well as portfolios for third parties.


LLOYDS BANKING: S&P Downgrades Preference Share Rating to 'C'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its rating
on a GBP56.472 million 6.475% preference share issue by Lloyds
Banking Group (A/Stable/A-1) to 'C' from 'CC' following the first
missed coupon payment.  The counterparty credit ratings on Lloyds
are unaffected by this action.  This rating action is the first of
S&P's forthcoming rating actions on over 40 hybrid instruments
issued by Lloyds and related entities with discretionary coupon
payments.  Each security will be lowered to 'C' from 'CC' on the
date of the first coupon payment to be missed.

This announcement follows the opening of the two-year "Affected
Period" commencing Jan. 31, 2010, during which time, at the
request of the European Commission, Lloyds is suspending all
coupon payments on hybrid instruments, which it is not legally
obliged to pay.

This action is consistent with S&P's announcement on Nov. 3, 2009,
at which time the outcome of the EC's state-aid ruling on Lloyds,
which has led to these coupon deferrals, was announced.

                           Ratings List

                       Lloyds Banking Group
                          Ratings Lowered

    GBP56.472 million 6.475% callable non-cumulative pref shares
                       (ISIN: GB00B3KSB568)

                           To        From
                           --        ----
                           C         CC


MISSOURI TOPCO: Moody's Assigns 'Ba2' Corp. Family Rating
---------------------------------------------------------
Moody's Investors Service has assigned a first time corporate
family rating and Probability of Default Rating of Ba2 to Missouri
TopCo Limited.  Moody's has also rated the proposed GBP250 million
senior secured term loan and GBP50 million revolver facility of
Matalan Finance Limited at (P)Ba1 and its proposed GBP225 million
senior unsecured notes at (P)Ba3.  The rating outlook is stable.

The notes will be issued by Matalan Finance Limited, a wholly-
owned subsidiary of Missouri TopCo Limited, which represents the
consolidated position of the group.  Matalan Finance Limited is a
holding company that indirectly owns Matalan Retail Limited.  The
proceeds from the proposed issuance will be used to repay some
existing indebtedness and fund a dividend to shareholders of
approximately GBP250 million.

The CFR of Ba2 is supported by i) Matalan's position as one of the
leading players in the UK value clothing retail market, which has
grown faster than the rest of the industry; ii) its efficient
distribution network; and iii) its resiliency during the economic
downturn.  Since the company was taken private by the current
controlling shareholders, John Hargreaves and family, in 2006,
management has focused on rebuilding the fundamentals of the
business.  This has included growing its offering, which now
includes more products at higher price points, and investing in
the refurbishment of its stores to improve the shopping
experience.  Importantly, over the past three years, Matalan has
significantly increased its profitability, which is structurally
supported by a low rent base as the company primarily operates in
out of town locations.  The company achieved 11% EBIT margin
(before adjustments) in the 52 weeks to 28 November 2009, and is
expected to be even stronger in the current financial year ended
28 February 2010.  Moody's is also encouraged by Matalan's track
record in using its internally generated cash flows to reduce its
balance sheet debt, which peaked after the Take Private
transaction, through mandatory and voluntary debt repayments; this
has helped to support an improvement in credit metrics.

The rating is constrained by Matalan's smaller size relative to
other rated peers operating in the global apparel retail industry,
the high level of competitiveness and fragmented nature of the UK
clothing industry as well as some exposure to fashion risk and to
currency fluctuations, as a large part of the purchases are done
in Near and Far East Asia.  The company is also planning to
reinstate its store openings strategy, which will entail
additional investments, somewhat constraining free cash flow
generation in the future.  While the planned refinancing will
result in a higher leverage to fund the dividends to shareholders,
with adjusted debt-to-EBITDA somewhat below its FYE February 2009
level at closing, Moody's expects this ratio to decrease towards
4x in FYE February 2011.  In the long run, Moody's rating
assessment takes comfort from management commitment to allocate
internal cash flows to reduce leverage.

The company's proposed refinancing is expected to lengthen its
debt maturity profile and give it access to a long-term committed
GBP50 million covenanted revolver which should remain undrawn at
closing.  Moody's expects the company to maintain comfortable
leeway under the financial covenants included in the credit
agreement throughout the life of the facilities.  The short term
liquidity is also good with internally generated cash flows and
tight cash management sufficient to cover expected working capital
outflows, capital expenditure program and debt service
requirements for the next 12 months.

The (P)Ba1 rating assigned to the senior secured term loan and
revolver reflect their position as the senior most liability in
the capital structure due to security interests on the company's
assets.  Both the loan and revolver are guaranteed by certain
subsidiary guarantors including Matalan Retail Limited, the
principal operating subsidiary in the group.  While the proposed
senior unsecured notes benefit from the same senior guarantees,
they will be issued on an unsecured basis: they therefore are
rated one notch below the company's CFR at (P)Ba3.  The notes
indentures include a change of control clause as well as
restrictions on, inter alia, certain payments, additional debt,
liens and sale of assets.

The rating outlook is stable, reflecting Moody's expectations that
Matalan will pursue its margin enhancing initiatives and prudent
investment policy in order to reduce its leverage after the
proposed transaction and maintain a good liquidity profile.
Positive rating pressure could develop from an improvement in the
company's profitability and credit metrics, such that adjusted
debt-to-EBITDA is reduced and maintained below 4x and RCF-to-net
debt is recorded in the mid-to-high teens on a sustainable basis.

Moody's issues provisional ratings in advance of the final sale of
securities and these ratings reflect Moody's preliminary credit
opinion regarding the transaction only.  Upon a conclusive review
of the final documentation, Moody's will endeavor to assign a
definitive rating to the notes.  A definitive rating may differ
from a provisional rating.

Headquartered in Skelmersdale, UK, Missouri TopCo Limited is the
ultimate holding company that owns Matalan Retail Limited -- the
principal operating subsidiary of the group -- a leading out of
town value clothing retailer with revenue exceeding GBP1 billion
in the 52 weeks to November 28, 2009.


PUNCH TAVERNS: Fitch Downgrades Ratings on All Classes of Notes
---------------------------------------------------------------
Fitch Ratings downgraded the ratings on all the notes issued by
Punch Taverns Finance Plc (Punch A) due to underperformance
compared with the agency's assumptions made at the time of the tap
issuance (July 2007).

The rating actions are detailed below:

  -- GBP270m class A1(R) fixed-rate notes due 2022: downgraded to
     'AA', Outlook Stable from 'AAA', Outlook Negative

  -- GBP300m class A2(R) fixed-rate notes due 2020: downgraded to
     'AA', Outlook Stable from 'AAA', Outlook Negative

  -- GBP3.7m class A3(N) floating-rate notes due 2015: downgraded
     to 'AA', Outlook Stable from 'AAA', Outlook Negative

  -- GBP181.2m class M1 fixed-rate notes due 2026: downgraded to
     'A+', Outlook Stable from 'AA', Outlook Negative

  -- GBP400m class M2(N) floating-rate notes due 2029: downgraded
     to 'A+', Outlook Stable from 'AA', Outlook Negative

  -- GBP135.1m class B1 fixed-rate notes due 2026: downgraded to
     'BBB-', Outlook Negative from 'BBB+', Outlook Negative

  -- GBP142.7m class B2 fixed-rate notes due 2029: downgraded to
     'BBB-', Outlook Negative from 'BBB+', Outlook Negative

  -- GBP175m class B3 floating-rate notes due 2031: downgraded to
     'BBB-' Outlook Negative from 'BBB+', Outlook Negative

  -- GBP186m class C(R) fixed-rate notes due 2033: downgraded to
     'BB+', Outlook Negative from 'BBB', Outlook Negative

  -- GBP125m class D1 floating-rate notes 2032: downgraded to
     'BB', Outlook Negative from 'BBB', Rating Watch Negative

Punch A is a whole business securitization of a portfolio of 3,659
tenanted and leased pubs owned by Punch and located across the UK.

The assets and cash-flows backing the repayment of the notes have
been impacted by the challenging trading environment due to wider
economic and industry-related factors.

In Q409 (June-August 2009) the trailing 12 month turnover
(including beer net of discounts, rental income and machine
income) stood at GBP401.3 million, 5% down (after adjusting for
the number of pubs in the estate) compared to a year ago.
Moreover, the adjusted TTM operating costs increased 20% y-o-y and
as a result the adjusted TTM EBITDA fell by 10% to GBP227.6
million in August 2009.  This represents a 14% decline from the
GBP263.8 million run-rate EBITDA assumed by the agency at the time
of the tap.  Even after adjusting for the reduced number of pubs
in the estate (3,659 versus the 4,035 at the time of the tap) the
EBITDA generated by the estate remains 9% lower than anticipated.

After accounting for the debt already repaid and the GBP139.6
million bought-back and cancelled during 2008 and 2009, the Fitch-
computed annuity-based 25 year and legal final free cash flow debt
service coverage ratios for each of the classes of notes were
between 3% and 10% lower in August 2009 than at the time of the
tap.  However, the rating actions are also underpinned by the
expectation of further deterioration based on forecasts made by
the agency.

The actual reported EBITDA DSCR on a rolling two quarter basis was
down at 1.55x in August 2009 from 1.73x at time of the tap.  The
restricted payment condition is set at 1.5x and Fitch expects this
level will be breached during 2010.  Assuming further decline in
the DSCR, the next trigger point will be 1.35x where other
structural features such as mandatory prepayment of notes from
disposal proceeds and the appointment of a financial consultant
will be triggered.  Thereafter, the breach of the financial
covenant is set at an EBITDA DSCR level of 1.25x.  It should be
noted that the debt service is expected to peak at around GBP190
million in 2016-2017 before falling back to a long-term average of
GBP167 million.  Although this was not a primary driver for the
rating actions, this repayment profile will put additional
pressure on the transaction in the run-up to 2016-2017.

While all the classes were downgraded by two notches, the class D1
notes were downgraded by three notches as Fitch viewed them as the
most exposed and considered that there was a sufficient gap in
credit metrics to distinguish their ratings from the C(R) ones.
Fitch's breakeven analysis on Punch A's turnover suggest that the
class B notes should still remain investment-grade.

The Stable Outlooks on the class A and M are warranted by their
seniority in the capital structure and their relatively robust
metrics accounting for Fitch's financial forecasts.  The Negative
Outlooks on the class B, class C and class D notes reflect Fitch's
opinion that the pub industry, especially on the leased and
tenanted side, remains under pressure due to stress factors such
as the recent reversion to the 17.5% VAT rate, uncertainties on
the magnitude or nature of the economic recovery, continuous price
gap with the off-trade, vulnerable consumer confidence in an
election year and looming hikes in alcohol duty.  Fitch also
considers that there remains uncertainty on the levels at which
the Punch A free cash flow will stabilize in the medium term and
that classes B, C and D are most exposed to continued
underperformance of this estate.


===============
X X X X X X X X
===============


* S&P Corrects Ratings on Seven European Synthetic CDO Tranches
---------------------------------------------------------------
Standard & Poor's Ratings Services corrected its credit ratings on
seven European synthetic collateralized debt obligation tranches.

On March 10, 2010 S&P placed these ratings on CreditWatch
positive.  However, due to an error, S&P mistakenly removed the
"swap risk rating -- portfolio" identifiers from these ratings.
The action corrects this error by adding back the "srp" identifier
to the affected ratings.

                           Ratings List

                            Aria CDO I

       A$154.3 Million, CHF74.17 Million, EUR494.6 Million,
        JPY9.3 Billion, US$35 Million Fixed- Floating-Rate
           And Inflation-Indexed Managed Portfolio Notes
                (Issued by Aria CDO I (Ireland) PLC)

                               Rating
                               ------
         Class       To                      From
         -----       --                      ----
         A-1C7       A+srp/Watch Pos         A+/Watch Pos
         A-1E7K      A+srp/Watch Pos         A+/Watch Pos
         C-1U10      B+srp/Watch Pos         B+/Watch Pos

          US$3 Million Composite Security Secured Notes
           (Issued by Aria CDO I (Jersey No. 10) Ltd.)

                               Rating
                               ------
         Class       To                      From
         -----       --                      ----
         M-4U7       B+srp/Watch Pos         B+/Watch Pos

       US$23.69 Million Fixed-Rate Managed Portfolio Notes
             (Issued by Aria CDO I (Jersey No. 8) Ltd.
               and Aria CDO I (Delaware No.8) Corp.)

                               Rating
                               ------
         Class       To                      From
         -----       --                      ----
         C-2U7       B+srp/Watch Pos         B+/Watch Pos

      US$17.64 Million Floating-Rate Managed Portfolio Notes
             (Issued by Aria CDO I (Jersey No. 2) Ltd.
               and Aria CDO I (Delaware No.2) Corp.)

                               Rating
                               ------
         Class       To                      From
         -----       --                      ----
         A-1U7       A+srp/Watch Pos         A+/Watch Pos

                     Quartz CDO (Ireland) PLC
     EUR20 Million Fixed-Rate Secured Substitutable Portfolio
                   Credit-Linked Notes Series 2

                               Rating
                               ------
         Class       To                      From
         -----       --                      ----
         A           BB+srp/Watch Pos        BB+/Watch Pos


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.

                            *********


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., Frederick,
Maryland USA.  Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine
C. Tumanda-Fernandez, Joy A. Agravante and Peter A. Chapman,
Editors.

Copyright 2010.  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$625 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 Christopher Beard at 240/629-3300.


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