TCREUR_Public/100630.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, June 30, 2010, Vol. 11, No. 127



GLASKEK: Swedbank Files Bankruptcy Petition


LE MONDE: Accepts Offer From French Investor Trio
THEOLIA SA: Wants to Keep Certain Assets, Chief Executive Says


AAREAL BANK: To Start Repaying Government Aid
ARCANDOR AG: Administrator to Dispose of 5.7 Million Shares
BOEWE SYSTEC: Gets Expressions of Interest From Potential Buyers
NORDENIA HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating
NORDENIA INTERNATIONAL: Moody's Assigns 'B1' Corp. Family Rating

ROHWEDDER AG: Canada's ATS to Take Over Four German Sites

* GERMANY: Unveils Draft for Bank Restructuring Fund Levy


* GREECE: Faces Insolvency Crisis; Needs Orderly Restructuring


MAV ZRT: Moody's Downgrades Corporate Family Rating to 'Ba2'


ALLIED IRISH: Polish Gov't. Aid May Help PKO's Bid for Zachodni
ALLIED IRISH: May Place 22.5% M&T Stake With Investors
DUBLIN LAND: Reliance on Bank Support Casts Doubt on Future


ABN AMRO: Moody's Affirms Ba2 Ratings on Hybrid Securities
ASSET REPACKAGING: S&P Downgrades Rating on EUR5 Mil. Notes to 'D'
DSB BANK: DNB Has Role in 2009 Collapse, Scheltema Review Finds


LUSITANO SME: S&P Puts 'BB'-Rated Class C Notes on Watch Neg.


CENTRAL TELECOMS: S&P Puts BB- Credit Rating on Developing Watch
LUKOIL OAO: Subsidiary Defaults on Ethanol Contract
RAIFFEISENBANK ZAO: Moody's Gives Stable Outlook on 'D+' Rating
ROSEVROBANK OAO: Moody's Affirms 'E+' Bank Strength Rating


FTA SANTANDER: Moody's Assigns (P)'Ca' Rating on Class D Notes
GRUPO SACRESA: Files for Protection From Creditors


SAAB CARS: Launches First North American Ad Campaign

U N I T E D   K I N G D O M

BRITISH AIRWAYS: Cabin Crew Union Postpones Strike Ballot
EUROPEAN CAPITAL: Completes Restructuring Transaction
O'BRIEN'S IRISH: Two UK Outlets Set to Be Wound Up
VIRGIN MEDIA: Moody's Gives Positive Outlook; Keeps 'Ba3' Rating



GLASKEK: Swedbank Files Bankruptcy Petition
Toomas Hobemagi at reports that Swedbank, one of
Glaskek's creditors, on June 22 filed the company for bankruptcy.

According to the report, Lars Nilsson, who heads Swedbank's Baltic
unit that manages high business risks, said that the bank and
Glaskek had been jointly analyzing the possibilities to
restructure the company, but after an in-depth study, the bank no
longer sees a possibility to restructure Glaskek into a viable
business by restructuring.

The report notes the bank says that it aims to keep the company's
viable business in operation so that it could be sold to new
owners as an integrated complex.

"Therefore, the bankruptcy would not necessarily mean selling the
company's individual assets, rather than a clearly regulated legal
process in the course of which creditors would be able to reclaim
some of their loans," the report quoted Mr. Nilsson as saying.

Glaskek is a window manufacturer based in Estonia.


LE MONDE: Accepts Offer From French Investor Trio
Elliott Gotkine and Matthew Campbell at Bloomberg News report that
Le Monde accepted an offer from a trio of investors including Yves
Saint Laurent Group partner Pierre Berge.

According to Bloomberg, the group of investors, which also
includes Internet billionaire Xavier Niel and Lazard Ltd. banker
Matthieu Pigasse agreed to pay EUR110 million (US$135 million) to
take control of the 65-year-old Paris afternoon daily, helping it
avert a capital crunch.  By accepting the offer, the newspaper's
staff rejected pressure from President Nicolas Sarkozy, who had
told Le Monde Chief Executive Officer Eric Fottorino he didn't
want the daily taken over by the trio, Bloomberg notes.

Adrien de Tricornot, vice president of journalist group Societe
des Redacteurs du Monde, said in an interview with Bloomberg
Television that the investment by Messrs. Berge, Pigasse and Niel,
founder of Iliad SA, includes EUR60 million for debt payments and
EUR50 million for reinvestment.

Bloomberg relates Le Monde's board said in an e-mailed statement
that the trio will now enter into three months of exclusive
negotiations in exchange for a EUR10-million fee.

On June 7, 2010, the Troubled Company Reporter-Europe, citing the
Financial Times, reported that Le Monde is in a race against time
to find new investors and faces insolvency by the end of July if
it fails to recapitalize.

Le Monde is a French newspaper.

THEOLIA SA: Wants to Keep Certain Assets, Chief Executive Says
Tara Patel at Bloomberg News reports that Theolia SA Chief
Executive Officer Fady Khallouf said the company plans to keep
some assets.

"I want to keep certain assets on the balance sheet,"
Bloomberg quoted Mr. Khallouf, who was appointed CEO on May 24, as
saying in a telephone interview Monday.  "We are prepared to take
the risk of having a stake in our own projects."

Bloomberg relates Mr. Khallouf said the strategy to retain
ownership of an as-yet-undetermined proportion of wind-power
assets will be a "balance" between previous management's plan to
sell completed projects to raise money for the company and that
announced by former CEO Jean-Marie Santander in September 2008.

Keeping more assets would make earnings more "predictable" and
"could be more appealing to investors looking for a regulated
profit base," Mr. Khallouf said, according to Bloomberg.  "We
aren't in a hurry to sell assets.  We will focus on when this is
necessary for value creation or investment in other projects."

                            Share Sale

On June 28, 2010, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that Theolia said Thursday it will seek
to raise EUR60 million (US$74.3 million) in a rights offering
through July 7, short of an original EUR100-million target.  "The
amount is disappointing," Bloomberg quoted Jerome Chosson, analyst
at IDMidcaps, as saying.  "This will buy them some time but won't
go very far."  Bloomberg disclosed hurt by a lack of financing
during the global credit slump, Theolia has sought to sell assets,
cut costs and halt some operations.  Bloomberg recalled previous
management announced the plan to restructure EUR253 million of
convertible bonds and raise as much as EUR100 million in a share
sale to help avoid creditor protection.

Theolia SA (EPA:TEO) -- is a
France-based energy company that develops and manages renewable
energy sources.  It specializes in the production of electricity
using wind power, as well as in the construction of wind power
plants and turbines, based notably in France and Germany.
Additionally, the Company is engaged in non-wind turbine
activities, such as the utilization of biomass, cogeneration and
biogas techniques for the production of electricity, through its
subsidiary, THENERGO.  Theolia SA operates several subsidiaries,
including Ventura, Natenco SAS, Meastrale Green Energy and Theolia
Iberica.  The Company is operational in such countries as Germany,
Spain, Brazil, Greece, Italy, India and Morocco.


AAREAL BANK: To Start Repaying Government Aid
William Launder at Dow Jones Newswires reports that Aareal Bank AG
said Monday it would begin repaying the government aid it took as
a precautionary measure at the height of the crisis in early 2009.

According to Dow Jones, Aareal Bank's plan to pay back a EUR150
million (US$185.8 million) tranche of aid to Germany's financial
markets stabilization fund, or SoFFin, underpins German banks'
growing confidence as they return to profitability and see the
worst of the crisis as behind them.

Aareal Bank, as cited by Dow Jones, said SoFFin has agreed to
accept the first aid repayment.  It now plans to repay the
remainder of its EUR525 million in silent participations in "due
course," Dow Jones discloses.

Dow Jones notes Aareal added, however, that it would use the EUR2
billion in state guarantees "as a purely precautionary measure"
for the next several years.  Dow Jones relates Aareal said the
guarantees will safeguard the bank's refinancing against further
possible market distortions going forward.

Aareal Bank AG -- is a Germany-
based real estate bank.  It provides finance, as well as advisory
and other services to commercial property and institutional
housing sectors, supporting national and international clients.
The Company's activities are divided into two core business
divisions: Structured Property Financing and Consulting/Services.
The Structured Property Financing combines property finance with
refinancing, services domestic and international clients on their
property and creates financing packages for logistics properties,
shopping centers, as well as hotels.  The Consulting/Services
offers the institutional housing sector services and products for
managing residential property portfolios and processing payment
flows, providing Information Technology (IT) systems consultancy,
software products, as well as advisory and training services.
Aareal Bank AG is active in more than 25 countries in Europe, Asia
and Pacific region, as well as North America.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on March 11,
2010, Fitch Ratings affirmed Germany-based Aareal Bank AG's
Individual Rating at 'C/D'.  The ratings of Aareal's two hybrid
capital issues -- issued through its Delaware LLC and Capital
Funding GmbH vehicles -- were downgraded to 'BB-' and 'B+' from
'BB' and 'BB-', respectively, and removed from Rating Watch

ARCANDOR AG: Administrator to Dispose of 5.7 Million Shares
Julie Cruz at Bloomberg News reports that Arcandor AG said in an
e-mailed statement that the retailer's insolvency administrator
will dispose of about 5.7 million of shares that will be sold on
the exchange.  According to Bloomberg, Arcandor said shareholders
won't receive proceeds or dividends from the sale.

                        About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) --
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, 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.

BOEWE SYSTEC: Gets Expressions of Interest From Potential Buyers
Tom Lavell at Bloomberg News reports that Werner Schneidere, Boewe
Systec AG's preliminary insolvency administrator, said Monday in a
statement that Boewe Systec has received expressions of interest
from almost a half-dozen investors about acquiring the company.

On May 24, 2010, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that Boewe Systec said it filed for the
opening of an insolvency proceeding with the local Augsburg court
because of "impending illiquidity and over-indebtedness."

Boewe Systec AG develops, manufactures, markets, installs and
maintains paper management systems.  It has operations in Europe,
North America and Asia.

NORDENIA HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Germany-based flexible film and
packaging producer Nordenia Holdings GmbH.  The rating outlook is

In addition, S&P has assigned its 'B' long-term issue rating to
the company's proposed EUR280 million senior subordinated notes
due 2017.  The recovery rating on the notes is '5', indicating
S&P's expectation of modest (10%-30%) recovery in the event of a
payment default.  The issue rating on this debt is one notch below
the corporate credit rating, in accordance with S&P's notching
criteria for a '5' recovery rating.

"The 'B+' rating reflects Nordenia's aggressive financial risk
profile, significant customer and production capacity
concentration, and exposure to volatile raw material prices," said
Standard & Poor's credit analyst Jacob Zachrison.  "These risk
factors are balanced by the group's leading positions in niche
markets, good record of passing through input cost increases, and
fair prospects for positive free operating cash flow generation."

On June 28, 2010, Nordenia launched a proposed refinancing,
including the issuance of a EUR280 million bond and a new
EUR100 million revolving credit facility.  The proceeds will be
used, under the proposed refinancing, to repay existing debt and
pay a EUR195 million shareholder dividend.  S&P views the latter
as aggressive in the context of the company's financial policies
as it will have a substantially negative effect on Nordenia's
leverage and credit measures.  From a liquidity perspective, the
proposed transaction is positive as will extend the company's debt
maturity profile and reduces its reliance on extending the terms
of its bilateral loans.

Nordenia's operating performance has improved gradually since the
end of 2008 on the back of low input costs and gradually
recovering demand from recessionary levels at the beginning of
2009.  Volumes in the first quarter of 2010 were at record highs
as increased consumer spending continued to impact demand
positively.  Compared with the corresponding quarter in 2009,
selling prices were lower due to lower resin cost pass through.
Unadjusted last-12-month EBITDA as of April 2010 stood at just
over EUR100 million, which lends support to S&P's forecast base
case for 2010 and incorporates both revenue and margin

Downside risk to the expected improvement, in S&P's opinion, would
primarily relate to renewed macroeconomic pressure or higher input
costs, or the loss of a major customer.  Furthermore, Nordenia is
exposed to exchange rate volatility which may have adverse effects
on earnings.  This exposure is hedged on a short-term basis, which
is a mitigating factor.

In S&P's financial base case, S&P believes that Nordenia will
achieve adjusted funds from operations to debt of about 15% (about
16% in fiscal 2009 on a pro forma basis) and adjusted debt to
EBITDA of 4.5x-5x (about 5x in fiscal 2009 on a pro forma basis).
This is based on improved operating cash flow generation, partly
offset by higher financing costs and capital expenditures.  S&P
expects free operating cash flow to be positive in S&P's forecast
period.  This is a supporting factor at the current rating level.

NORDENIA INTERNATIONAL: Moody's Assigns 'B1' Corp. Family Rating
Moody's Investors Service has assigned a B1 Corporate Family
Rating and a B1 Probability of Default Rating to Nordenia
International AG.  At the same time, Moody's has assigned a
provisional (P)B2 rating to the proposed EUR280 million Senior
Second Priority Notes of Nordenia Holdings GmbH.  The rating
outlook is stable.  The (P)B2 assumes that (i) an intended merger
between Nordenia Holdings GmbH and Nordenia will be implemented in
short order and in no case later than 6 months from issuance and
that (ii) the structure and bondholders protection described below
post merger will be acted upon in due course.  Failure to complete
any of these two steps promptly would put strong downward pressure
on the rating of the notes as they would remain very junior in the
capital structure.  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.  This is the first
time that Moody's rates Nordenia.

The B1 Corporate Family Rating reflects Nordenia's solid business
profile with (i) a high portion of value added and customized
products with leading market shares in certain niche segments,
(ii) the majority of sales under longer term contractual
agreements and supported by (iii) strong customer ties and
longstanding relationships including a collaboration of R&D
activities, and (iv) an improved cost base on the back of
successful rationalization and cost reduction initiatives in
recent years.  The rating also considers the earnings recovery
over 2009 which continued in the first quarter of 2010 and Moody's
assumption that these improvements can be at least preserved on
the back of higher volumes and an improved product mix.  In
addition, the B1 rating also reflects Moody's assumption of a
solid liquidity cushion going forward including sufficient
headroom under financial covenants.

The rating is, however, constrained by the high customer
concentration with the largest customer representing sales in
excess of one third of 2009 group sales, which however is to some
extent mitigated by the longstanding relationship with constantly
rising sales volumes as well as a strong integration into product
development.  Moreover, Moody's caution that Nordenia is exposed
to raw material price fluctuations (e.g. resin and other chemical
products such as adhesives, additives and inks) and it might be
challenging to recover increasing input costs from customers in a
timely fashion.  In addition, a limited diversification in terms
of geography (about 75% of 2009 revenues were generated in Europe)
and substrate diversification given the full reliance on resins
weighs on the rating.  Lastly, the re-leverage of the group to
fund a one-time shareholder distribution underlines a certain
aggressiveness in the shareholder's financial policy as does the
financing structure and results in clearly weakened credit

The stable outlook incorporates Moody's expectation that the group
will continue its path of profitability improvements on the back
of growing volumes and an improved product mix and through
capitalizing on past investment activity underlined by improved Q1
2010 performance compared to Q1 last year.  These expected
improvements together with continued positive free cash flow
generation should enable the company to de-leverage to below 5
times Moody's adjusted Debt/EBITDA over 2010, by thus achieving
some headroom in the B1 rating category.  This headroom may be
used for a further regional expansion of the business through
potential bolt-on acquisitions or greenfield projects to increase
the ability of serving its globally active customer base.
Following the re-leverage of the group to fund a shareholder
distribution, the stable outlook also assumes a more balanced
financial policy going forward while Moody's also expect solid
liquidity cushion including sufficient covenant headroom to be

The ratings could be upgraded should Nordenia manage to improve
and sustain leverage in terms of Moody's adjusted Debt/EBITDA to
below 4.5 times on the back of further profitability improvements
such as EBIT-margins increasing to the low-to mid double digit
percentages and through continued positive free cash flow
generation (excl. the planned one-time shareholder distribution)
to be applied to net debt reductions.

The rating could come under negative pressure should leverage in
terms of Moody's adjusted Debt/EBITDA move to clearly above 5
times, Free Cash Flow (excl. the planned one-time shareholder
distribution) turning negative or should profitability in terms of
EBIT-margins not move towards the low double digits.

The proposed EUR280 million Senior Second Priority Notes will be
issued by Nordenia Holdings GmbH, a special finance vehicle and
ultimate holding company of the group, which will, following the
shareholder distribution, be merged with Nordenia International
AG.  Prior to the planned merger, the notes will not benefit from
any upstream guarantees.  Until the merger, investor protection is
solely linked to a claim under a EUR70 million intercompany loan
and a pledge over the shares of Nordenia International AG.  Upon
the completion of the intended merger of Nordenia Holdings GmbH
and Nordenia International AG, the proposed notes will benefit
from upstream guarantees of operating subsidiaries that account
for about 80% of consolidated 2009 revenues, EBITDA and assets.
Moody's understand that the merger will be contemplated within a
short time frame of a few months following the bond issuance, but
rely in this respect on managements assurance that minority
shareholders will not participate in any award proceedings
resulting in delays of the process.  However, should there be
delays in implementing this merger, the rating of the proposed
Senior Second Priority Notes might be subject to revision given
the considerably weaker investor protection in the pre-merger

Apart from the proposed Senior Second Priority Notes there will be
priority bank debt relating to a EUR100 million revolving credit
facility ranking ahead of the proposed notes.  In addition, the
capital structure includes EUR10 million of other third party debt
and some smaller amount of finance leases ranking pari passu with
the proposed Senior Second Priority Notes in Nordenia's debt
structure.  Given these assumptions, Moody's Loss-Given-Default
Methodology results in a (P)B2 (LGD 4, 67%) instrument rating for
the EUR280 million Senior Second Priority Notes.  The proceeds of
EUR280 million together with about EUR45 million of cash are
planned to be used (i) for a distribution of EUR195 million to
shareholders by way of a one-time dividend, whereby Moody's
understands that this amount exceeds Oaktree Capital's initial
investment, (ii) to repay EUR115 million of bank debt, and (iii)
to cover transaction expenses.


Issuer: Nordenia Holdings GmbH

  -- Senior Unsecured Regular Bond/Debenture, Assigned a range of
     67 - LGD4 to (P)B2

Issuer: Nordenia International AG

  -- Probability of Default Rating, Assigned B1
  -- Corporate Family Rating, Assigned B1

Nordenia, based in Greven, Germany, is an integrated developer and
manufacturer of customized plastic hygiene components and flexible
plastic packaging products, largely focused on the consumer goods
industry.  With about 3,000 staff and 15 production facilities in
8 countries, the company generated revenues of EUR664 million in
2009.  Majority owner with an about 86% stake is private equity
investor Oaktree.

ROHWEDDER AG: Canada's ATS to Take Over Four German Sites
Angela Cullen at Bloomberg News reports that Financial Times
Deutschland, citing Rohwedder AG labor representative Renate
Schittek, said ATS Automation Tooling Systems Inc. of Canada will
acquire the insolvent German machinery company after
administrators accepted its offer last week.

According to Bloomberg, the FTD said ATS agreed to take over
Rohwedder's four German sites as well as a Finnish unit.

As reported by the Troubled Company Reporter-Europe on June 4,
2010, evertiq said that the Konstanz District Court opened
insolvency proceedings in respect of the assets of Rohwedder.
evertiq disclosed Volker Grub was appointed as the insolvency

Rohwedder AG -- is a Germany-based
company that supplies automation system solutions for the
assembly, production and testing technology within two segments.
Within the Mechatronics Production Solutions segment the Company
concentrates on Assembly Technologies in Europe and North America,
offering automation solutions for the automotive industry; and
Micro Technologies, which specializes in assembly solutions for
the production of micro products.  The Electronics Production
Solutions segment includes MIMOT Surface Mount Technologies, which
provides surface mount device placement technology products;
Mobile Device Solutions, focusing on automation solutions for the
mobile communication industry; Standard Products, which offers
products through the brand JOT Automation; and Customer Specific
Solutions, providing fully automatic and semiautomatic as well as
manual solutions.  The Company operates through numerous direct
and indirect subsidiaries as well as affiliated companies.

* GERMANY: Unveils Draft for Bank Restructuring Fund Levy
Karin Matussek and Rainer Buergin at Bloomberg News report that
German Chancellor Angela Merkel's government circulated a draft
version of procedures to prevent the breakdown of "crucial" banks
which includes a levy on all lenders to finance a national bank
restructuring fund.

According to Bloomberg, a Finance Ministry paper distributed to
lawmakers and ministries Monday showed that the draft envisages a
two-step restructuring process open to all banks and a separate
administrative process granting Germany's Soffin fund powers to
rescue lenders it deems crucial for the financial system.  Lenders
would be required to pay an annual tax to finance a restructuring
fund under the plan, Bloomberg notes.

Germany is pressing on with plans for a national bank levy after
failing to convince fellow Group of 20 countries at a June 26-27
summit in Toronto to back a global tax, Bloomberg relates.


* GREECE: Faces Insolvency Crisis; Needs Orderly Restructuring
Ben Livesey at Bloomberg News reports that New York University
professor Nouriel Roubini wrote in the Financial Times that Greece
is facing an insolvency crisis and an orderly restructuring of its
public debt is required in order to avoid an "inevitable default".

According to Bloomberg, Mr. Roubini wrote that austerity measures
agreed as a condition of the country's bailout by the European
Union and International Monetary Fund will prolong Greece's
recession and still leave it with a debt-to-gross-domestic-product
ratio of 148% by 2016.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on June 16,
2010, Moody's Investors Service downgraded Greece's government
bond ratings by four notches to Ba1 from A3, reflecting its view
of the country's medium-term credit fundamentals.  The rating
action concludes the review for possible downgrade, which Moody's
initiated on April 22, 2010.  Moody's also downgraded Greece's
short-term issuer rating to Not-Prime from Prime-1.  Greece's
country ceilings for bonds and bank deposits are unaffected by the
review and remain at Aaa (in line with the Eurozone's rating).
The outlook on all ratings is stable.

"The Ba1 rating reflects Moody's analysis of the balance of the
strengths and risks associated with the Eurozone/IMF support
package.  The package effectively eliminates any near-term risk of
a liquidity-driven default and encourages the implementation of a
credible, feasible, and incentive-compatible set of structural
reforms, which have a high likelihood of stabilizing debt service
requirements at manageable levels," said Sarah Carlson, Vice
President-Senior Analyst in Moody's Sovereign Risk Group and lead
analyst for Greece.  "Nevertheless, the macroeconomic and
implementation risks associated with the program are substantial
and more consistent with a Ba1 rating."

Moody's believes that the Eurozone/IMF support package has
sheltered the Greek government from the markets while it enacts
the very ambitious fiscal austerity measures and structural
economic reforms stipulated by the package.  These have the
potential to restore market confidence, depending on the
effectiveness of the government's execution, and place the country
on a more stable debt trajectory.  The rating agency's base-case
scenario envisions Greece implementing the policy changes it needs
to stabilize its debt-to-GDP ratio at around 150% by 2013, and
reduce its debt burden, defined as the interest payment/revenues
ratio, gradually thereafter (expected at 20% in 2014).  Should the
economy respond positively to the competitiveness-enhancing
structural reforms, debt stabilization could be achieved earlier.

"There is considerable uncertainty surrounding the timing and
impact of these measures on the country's economic growth,
particularly in a less supportive global economic environment,"
said Ms. Carlson.  "This uncertainty represents a risk that leads
Moody's to believe that Greece's creditworthiness is now
consistent with a Ba1 rating, a rating which incorporates a
greater, albeit, low risk of default."

Moody's outlook on Greece's ratings is stable, reflecting the
substantial probability that the rating will not change over the
next 12 to 18 months.  The key factors that will influence the
rating agency's view will be the performance of the Greek economy,
especially that of GDP and tax revenues.  Information on these
developments will take some time to accumulate and may prove to be
either credit positive or negative.

Moody's previous rating action on Greece was implemented on
April 22, 2010, when the rating agency downgraded Greece's rating
to A3 and placed it under review for further downgrade.


MAV ZRT: Moody's Downgrades Corporate Family Rating to 'Ba2'
Moody's Investors Service has downgraded to Ba2 from Ba1 the
Corporate Family Rating of MAV Zrt Hungarian State Railways.  At
the same time, the rating agency assigned to MAV a Probability-of-
Default rating of Ba2.  The outlook for the ratings is stable.

The rating action was prompted by Moody's expectation of a
deterioration in MAV's liquidity in 2011.  This likely
deterioration led Moody's to lower MAV's Baseline Credit
Assessment to 17 from 16, in line with Moody's methodology for
government-related issuers.

The Ba2 rating of MAV now reflects the combination of these

  -- BCA of 17 (on a scale of 1 to 21, where 1 represents the
     lowest credit risk and 17 equates to Caa1)

  -- Hungary's sovereign rating of Baa1, negative outlook

  -- High dependence

  -- High support

"Although MAV's liquidity position remains acceptable for 2010,
Moody's expects it to deteriorate significantly in 2011 because of
the sizeable debt repayment commitments due during the year," said
Marco Vetulli, a Moody's Vice President and lead analyst for MAV.

"The rating currently assigned to MAV, therefore, reflects a high
level of support from its government, but is also constrained by
an increasing weakness of its stand alone credit profile due to
its liquidity position," added Mr Vetulli.

MAV, as it is evidenced by its last approved budget, is studying a
series of measures that could structurally improve its liquidity,
and as result of that its stand alone credit profile.  However, it
is uncertain the time frame required by these measures to be

"When these measures are executed, Moody's will re assess MAV's
BCA, but before they are effectively implemented it is difficult
to figure out their impact on the capital structure of the
Hungarian group," concluded Mr. Vetulli.

The stable outlook on the rating reflects the expectation that MAV
will be able to refinance its upcoming debt in a timely manner.

Moody's assessment of MAV's high dependence recognises that a
significant amount of the company's cash flow comes from the
Hungarian government, either directly to cover investment spending
or indirectly through compensation for the provision of public
services.  MAV's non-government cash flow is derived almost
exclusively from the Hungarian domestic market through passenger
traffic, train-operating companies and EU funds.

Moody's assessment of high support reflects: (i) MAV's critical
role in the Hungarian economy; (ii) its 100% state ownership; and
(iii) its tight control by the Hungarian state, with government-
nominated representatives dominating its Board of Directors and
Supervisory Board.  Although it does not explicitly guarantee all
of MAV's obligations, the government provides significant support
to MAV in the form of equity contributions, loan guarantees, cost
reimbursement and subsidies.  Therefore, Moody's believes it is
likely that Hungary would bail out MAV if the group were to
default in the near future.

The last rating action on MAV was implemented on 1 July 2009, when
Moody's downgraded the group's CFR to Ba1 with a negative outlook
from Baa2.

Headquartered in Budapest, Hungary, MAV is 100% government-owned
and the country's vertically integrated incumbent national railway
operator.  In FY2009, MAV reported revenues of HUF121.5 billion
(around EUR433 million) and received HUF164 billion in
reimbursements from the government.


ALLIED IRISH: Polish Gov't. Aid May Help PKO's Bid for Zachodni
Marta Waldoch at Bloomberg News reports that support from the
Polish government and financial market regulator may help PKO Bank
Polski SA, Poland's largest bank, to take over Bank Zachodni WBK
SA, Allied Irish Banks Plc's local unit, if it offers a price
similar to other bidders.

"It's hard to believe that AIB would pick PKO if its offer is
lower," while official backing "may help PKO if the price offers
are comparable," Bloomberg quoted Marcin Jablczynski, an analyst
at Deutsche Bank AG in Warsaw, as saying.

Bloomberg recalls three people with knowledge of the matter said
on June 15 that BNP Paribas SA, Societe Generale SA and OAO
Sberbank of Russia are also among banks considering a bid for
Allied Irish's stake in Bank Zachodni.  According to Bloomberg,
Polish newspaper Rzeczpospolita said the deadline for non-binding
initial bids was 9 a.m. June 28 and AIB plans to shortlist
investors by mid-July.

"For AIB, price will be the most important, but buyers may take
into account potential problems with getting approval, and that
may be a reason for some of them not to place an offer," said
Andrzej Powierza, a Warsaw-based Citigroup Inc. analyst, according
to Bloomberg.  "In the global economy's current condition you can
always have some reservations about any bank's balance sheet."

Bloomberg notes Stanislaw Kluza, head of Poland's financial
regulator, said his office will analyze "many criteria," including
whether the bidder has taken public aid and whether the
acquisition would "harm the Polish banking industry's safety and
stability."  A takeover by PKO would be "neutral" for the market,
Mr. Kluza, as cited by Bloomberg, said.

AS reported by the Troubled Company Reporter-Europe on June 24,
2010, The Financial Times said the Polish government supported a
potential bid from state-owned PKO for Bank Zachodni WBK, which is
being put up for sale by AIB.  The FT disclosed Poland's treasury
ministry said it may defer a dividend payment to enable PKO, which
is 51% state owned to buy BZ WBK.  The FT said the 70% stake in BZ
WBK owned by AIB is thought to be worth about PLN11 billion
(US$3.4 billion).  AIB is being forced to sell off its Polish
affiliate in order to meet capital targets after receiving aid
from the Irish government, according to the FT.

Allied Irish Banks, p.l.c., together with its subsidiaries -- conducts retail and commercial banking
business in Ireland.  It also provides corporate lending and
capital markets activities from its head office at Bankcentre and
from Dublin's International Financial Services Centre.  The Group
also has overseas branches in the United States, Germany, France
and Australia, among other locations.  The business of AIB Group
is conducted through four operating divisions: AIB Bank Republic
of Ireland division, Capital Markets division, AIB Bank UK
division, and Central & Eastern Europe division.  In February
2008, the Group acquired the AmCredit mortgage business in the
Baltic states of Latvia, Lithuania and Estonia.  In September
2008, the Group also acquired a 49.99% shareholding in BACB.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 10,
2009, Fitch Ratings affirmed Allied Irish Banks plc's individual
Rating at 'D/E'.

ALLIED IRISH: May Place 22.5% M&T Stake With Investors
Brian O'Mahony at Irish Examiner reports that Allied Irish Banks
could place its 22.5% stake in US bank M&T with institutional
investors if it fails to secure a purchaser.

According to Irish Examiner, Irish brokers suggest the placing
would raise over EUR1 billion, close to the amount AIB was hoping
to make from a sale of its US associate.

Spanish banking giant Santander has been the lead contender to buy
the business, Irish Examiner says.  It has been reported that its
US subsidiary, Sovereign Bancorp, would merge with M&T, taking
over AIB's stake, Irish Examiner recounts.

Irish Examiner notes if that deal fails, AIB is said to have
advanced plans to place its M&T shares at a modest discount to
their current share price.  Goodbody Stockbrokers said in a note
Monday this would raise over EUR1 billion for AIB, according to
Irish Examiner.

Allied Irish Banks, p.l.c., together with its subsidiaries -- conducts retail and commercial banking
business in Ireland.  It also provides corporate lending and
capital markets activities from its head office at Bankcentre and
from Dublin's International Financial Services Centre.  The Group
also has overseas branches in the United States, Germany, France
and Australia, among other locations.  The business of AIB Group
is conducted through four operating divisions: AIB Bank Republic
of Ireland division, Capital Markets division, AIB Bank UK
division, and Central & Eastern Europe division.  In February
2008, the Group acquired the AmCredit mortgage business in the
Baltic states of Latvia, Lithuania and Estonia.  In September
2008, the Group also acquired a 49.99% shareholding in BACB.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 10,
2009, Fitch Ratings affirmed Allied Irish Banks plc's individual
Rating at 'D/E'.

DUBLIN LAND: Reliance on Bank Support Casts Doubt on Future
Caroline Madden at The Irish Times reports that the auditors of
Dublin Land Securities said the company's reliance on continued
support from its bankers created a "material uncertainty" which
may "cast significant doubt" over the company's ability to
continue as a going concern.

According to The Irish Times, negotiations between the directors
of Dublin Land Securities and its bankers were ongoing when the
company's latest financial statements were approved last month,
but no agreement had been reached on the renewal of the company's
loan facilities.  The Irish Times relates the company reported a
net deficit of EUR471,482 at July 31, 2009.  The borrowings of
Dublin Land Securities and its subsidiaries exceeded EUR7 million,
The Irish Times discloses.  The company's bankers are AIB, Bank of
Ireland and Bank of Scotland (Ireland), The Irish Times notes.

The Irish Times says the financial statements also show that the
investment property portfolio of the Dublin Land Securities group
lost more than a quarter of its value in 2009, falling from
EUR11.7 million to EUR8.6 million, while the value of the group's
stock, which includes property trading stock, declined from over
EUR6.6 million to about EUR4.7 million.

Dublin Land Securities is a property investment company.  Peter
White is a majority shareholder and director of the company,
according to The Irish Times.


ABN AMRO: Moody's Affirms Ba2 Ratings on Hybrid Securities
Moody's Investors Service has affirmed the Aa3/Prime-1 long-
term/short-term bank deposit and senior unsecured ratings of ABN
AMRO Bank N.V.  The outlook on the long-term ratings has been
revised to stable from negative.  The bank financial strength
rating was downgraded to C- from C (equivalent to a baseline
credit assessment -- BCA -- of Baa1).  The outlook on the BFSR was
revised to positive from negative.  At the same time, the long-
term bank deposit and senior unsecured ratings of Fortis Bank
(Nederland) N.V. were upgraded to Aa3 from A1, whilst the short-
term senior unsecured rating was affirmed at P-1.  The outlook on
the long-term ratings has been revised to stable from negative.
FBN's BFSR was affirmed at C- (BCA of Baa1) and the outlook was
revised to positive from negative.

These ratings actions coincide with the anticipated legal merger
between the two banks, which is expected to conclude on 1 July
2010.  On completion of the merger, Fortis Bank (Nederland) N.V.
will cease to exist and will be merged into ABN AMRO Bank N.V.
Upon completion of the legal merger, the ratings of FBN will be

The legal merger represents one of the final steps in the
restructuring of ABN AMRO Holding N.V. following the bank's
acquisition in 2007 by a consortium of three banks (Royal Bank of
Scotland Group plc, Banco Santander SA and Fortis SA), through a
special purpose vehicle, RFS Holdings B.V.  In December 2008, the
Dutch government became the direct owner of Fortis's stake in ABN
AMRO Group N.V. following the state bailout of Fortis Bank
(Nederland) N.V. Since 1 April 2010, ABN and FBN have been
reorganized under a common holding company (ABN AMRO Group N.V.),
which is fully owned by the Dutch State.  This structure will
remain in place following the legal merger, with ABN AMRO Bank
N.V. remaining the sole operating bank.

The C- bank financial strength rating of both ABN and FBN (mapping
to a BCA of Baa1) reflects the combined bank's enhanced position
within the Dutch banking sector with a balanced business mix
between retail and commercial banking, its moderate risk profile
and the strong capital position.  These strengths are
counterbalanced by the ongoing challenges and significant costs
associated with the complex merger process as well as the
continued interdependencies (these mainly relate to IT services
and operations that FBN continues to receive from Fortis Bank
SA/NV, which are expected to be closed by end Q3 2010) as well as
certain trade finance transaction processing being received by ABN
AMRO from RBS N.V.), current low profitability and challenged
funding profile of the combined group.  In particular, the group's
funding profile is exposed to a significant amount of short-term
funding that needs to be termed out.  In October 2008 Fortis Bank
(Nederland) N.V. was cut off from intergroup funding lines
following its separation from Fortis group.  Initially, FBN relied
on the provision of a short-term facility from the Dutch state,
which was subsequently refinanced using short-term wholesale
funding.  As such, FBN currently has a sizable amount of
outstanding short-term funding and a further ?10.5 billion in ECB
tenders that need to be refinanced this year.  While good progress
has been made in terming out this debt, the combined group will
continue to remain exposed to volatility in wholesale funding
markets.  The positive outlook on the C- BFSR reflects Moody's
view that the ongoing separation and integration progress and the
substantial cost reduction programs should lead to a positive
improvement in the combined group's underlying financial strength.

The Aa3 bank deposit and senior debt ratings reflect that the
combined bank's systemic importance has further increased, as
evidenced by its market shares in lending (28% market share in
Dutch corporate lending) and in deposits (around 20% market share
in retail deposits) and the ongoing Dutch State investment in the
combined group (100% of the ordinary shares).  Moody's would
expect that the Dutch State's support will remain extremely high
in the medium term until the bank has further developed its stand-
alone strength.

                   Hybrid Debt Ratings Affirmed

The rating agency affirmed the Ba2 ratings on the two hybrid
securities currently assumed by ABN AMRO Bank N.V. --
GBP750 million perpetual subordinated upper tier 2 notes with
cumulative deferral language (XS0244754254) and EUR1,000 million
perpetual capital securities with cumulative deferral and ACSM
settlement language (XS0246487457).  The ratings on both
securities were confirmed at Ba2 in February 2010, reflecting
Moody's assumption that the securities faced a high probability of
coupon deferral.  The outlook on these instruments is stable.

Moody's also affirmed the ratings on the hybrid securities
currently assumed by Fortis Bank (Nederland) and its subsidiary as
well as the rating on the junior subordinated debt programme.

The EUR2 billion 8.75% non-cumulative Mandatory Convertible
Securities (MCS) (ISIN: XS0328920862) jointly issued by Fortis
Bank Nederland (Holding) N.V. (FBNH), Fortis Holdings (now Fortis
Group) and Fortis Bank SA/NV were affirmed at Ba1.  The outlook on
this security is stable.

Junior subordinated debt under the EUR 40 billion EMTN note
programme updated as of November 2009 A2 on watch for possible
downgrade, two notch above the adjusted BCA.  The outlook on this
programme is positive.  The bank's EMTN programme allows for the
issuance of junior subordinated debt.  However, FBN has currently
no outstanding junior subordinated debt issued under this

The 6.25% Non-cumulative Non-voting Class A Series 1 Preference
Shares (the Class A1 Preference Shares) (ISIN: GB0057047275) were
affirmed at Baa3, two notches below FBN's Adjusted BCA.  The
outlook on this security is stable.

The last rating action on ABN AMRO Bank N.V. was on 5 February
2010 when new debt and deposit ratings were assigned to the 'new'
ABN AMRO Bank N.V. following the completion of the legal
separation of the bank from RFS Holdings B.V.

The last rating action on Fortis Bank (Nederland) N.V. was on
3 March 2010 when Moody's Investors Service concluded its review
on the ratings of certain hybrid securities in line with its
revised Guidelines for Rating Bank Hybrids and Subordinated Debt
published in November 2009.

Both ABN AMRO Bank N.V and Fortis Bank (Nederland) N.V. are
headquarter in Amsterdam, The Netherlands.  With combined total
assets at end 2009 of ?392bn, the combined entity would be the
third largest bank in The Netherlands.

ASSET REPACKAGING: S&P Downgrades Rating on EUR5 Mil. Notes to 'D'
Standard & Poor's Ratings Services lowered to 'D' from 'CCC-' its
credit rating on Asset Repackaging Trust Six B.V.'s EUR5 million
floating-rate portfolio credit-linked secured notes series 5.

The downgrade to 'D' follows the arranger's notification to us
that losses from credit events in the underlying reference
portfolio have exceeded the available credit enhancement and led
to a full principal loss to the noteholders.

DSB BANK: DNB Has Role in 2009 Collapse, Scheltema Review Finds
Radio Netherlands Worldwide reports that a critical review led by
Professor Michiel Scheltema found on Tuesday that the Dutch
Central Bank took unacceptable risks by licensing DSB.

According to Radio Netherlands, the Scheltema review said the DNB
should never have allowed one-man financial enterprise DSB to go
into banking.

Radio Netherlands recalls the small bank collapsed in 2009 when
clients withdrew their savings following a call by a consumer
rights activist on national TV.  DSB clients who had taken out
mortgages discovered they had committed themselves to payments
which far exceeded their means, Radio Netherlands recounts.

On Oct. 20, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that the Amsterdam court on Oct. 19
declared DSB bankrupt after its owner failed to find a buyer.  The
Dutch central bank took control of DSB on Oct. 12 as an outflow of
capital threatened the company's existence, according to

DSB Bank -- is a fully licensed bank in
the Netherlands, providing mortgages, consumer loans, savings and
insurance products to retail clients.  The bank has a leading
market share in the Dutch market for consumer loans.  DSB Bank
also has operations in Belgium and Germany.  DSB Bank, established
in 1975, is privately owned by Dirk Scheringa, currently CEO of
DSB Bank, Chairman of the Executive Management Board.  Mr.
Scheringa is also 100% owner of AZ Alkmaar football club, which
plays in the Dutch Premier League and president of the Scheringa
Museum for Magic Realism, an international collection of more than
500 works of art.


LUSITANO SME: S&P Puts 'BB'-Rated Class C Notes on Watch Neg.
Standard & Poor's Ratings Services placed on CreditWatch negative
its credit rating on Lusitano SME No. 1 PLC's class C notes.  The
ratings on the other notes are not affected.

The rating action follows S&P's review of the performance of the
underlying portfolio.  During the early part of 2009, the
transaction was subject to an increase in arrears and defaults,
while the second part of 2009 and Q1 2010 saw a reduction in
arrears and a stabilizing of default levels.  Throughout this
period, the transaction had sufficient excess spread available to
cover defaults without significantly drawing on its cash reserve.

At the latest reporting date, the trustee reported a significant
increase in defaults and arrears.  In addition, excess spread
available to the transaction after covering allocated losses was
not sufficient to replenish the cash reserve.  The cash reserve is
currently at 56% of its required amount.

S&P will perform a cash flow analysis to determine the effect of
these developments and resolve the CreditWatch placement in due

The transaction started to amortize at the February 2010 payment
date.  The class A pool factor is 79%.  The European Investment
Fund (AAA/Stable/A-1+) guarantees the interest and principal
payments to the class B notes.

Banco Espirito Santo, S.A. originated the loans to Portuguese
small and midsize enterprises that back Lusitano SME No. 1.  The
transaction closed in 2006.

                           Ratings List

                      Lusitano SME No. 1 PLC
       EUR871.233 Million Asset-Backed Floating-Rate Notes

               Rating Placed On CreditWatch Negative

                Class       To                  From
                -----       --                  ----
                C           BB/Watch Neg        BB

                        Ratings Unaffected

                        Class       Rating
                        -----       ------
                        A           AAA
                        B           AAA


CENTRAL TELECOMS: S&P Puts BB- Credit Rating on Developing Watch
Standard & Poor's Ratings Services said that it had placed its
global scale 'BB-' long-term corporate credit and 'ruAA-' Russia
national scale ratings on Russian telecoms operator Central
Telecommunications (OJSC) on CreditWatch with developing

The CreditWatch placement reflects the uncertainties triggered by
the company's decision to reorganize in order to be merged into
OJSC Rostelecom (BB/Stable/--).

"S&P is particularly concerned about the potential impact of
reorganization on the company's liquidity position which, if it
deteriorates, could put downward pressure on the ratings," said
Standard & Poor's credit analyst Alexander Griaznov.  "At the
same, S&P would view as positive for the ratings a merger of CTC
into the larger Rostelecom entity, assuming the absence of any
technical or actual liquidity concerns coming out of the
reorganization process."

On June 25, 2010, the company's annual shareholders meeting
approved CTC's reorganization for merger into Rostelecom.  This
transaction is part of the restructuring of state-owned telecoms
holding company Svyazinvest OJSC and must also be approved by
Rostelecom's shareholders.  In compliance with Russian
legislation, all of CTC's debt holders have the legal right to
claim from the company early repayment of their debt in court.

Although S&P has reasons to believe that most debt holders will
waive this right, as their CTC debt will be swapped into debt of
Rostelecom -- a company S&P consider to be a stronger entity --the
amount of these potential claims remains an uncertainty.  In
addition, CTC shareholders opposing the reorganization have the
right to sell their stock to the company.  Although the latter
right is limited to 10% of the company's net assets, it
potentially creates additional pressure on CTC's liquidity

The rating on CTC is constrained by the company's exposure to
Russia's weak capital markets, limited revenue diversity, and
increasing competition in the most lucrative areas, such as Moscow
Oblast.  Uncertainties about reorganization of the company's
parent, Svyazinvest (OJSC), serve as an additional rating

The rating is supported by CTC's resilient market share (more than
70% of the fixed-line market), its vast network in European
Russia's central region, and its ownership of last-mile access to
6.7 million customers.

S&P expects to resolve the CreditWatch placement within the next
three months.  S&P will analyze the impact of the reorganization
on CTC's liquidity position.  S&P will compare the total amount of
financial claims on CTC from debtholders and shareholders with the
available liquidity resources.

"Based on this information, S&P could affirm, lower, or raise the
ratings," said Mr. Griaznov.

LUKOIL OAO: Subsidiary Defaults on Ethanol Contract
Bionol Clearfield, LLC, owner and operator of a US$270 million
state-of-the-art ethanol facility in Clearfield, Pennsylvania,
disclosed that Getty Petroleum Marketing Inc., a subsidiary of OAO
Lukoil, has defaulted on its billion dollar ethanol contract with

Bionol and Getty entered into a five year contract in which Getty
committed to purchase substantially all of the plant's output
under a formula-based price. Just over two months into its 5 year
term, Getty breached the contract.

"A consortium of lenders, investors and the Commonwealth of
Pennsylvania have all relied on Getty and Lukoil's good faith,
integrity, and experience in pulling this contract and project
together, which has generated 65 direct jobs and significant
economic development for Commonwealth of Pennsylvania," said
Stephen J. Gatto, Chairman and Chief Executive Officer of Bionol.
"We expect Getty to honor its contractual commitments and we will
zealously enforce our rights under the contract."

"The Commonwealth believes that Getty/Lukoil's demand for
arbitration is ill-conceived and inappropriate," said Pennsylvania
Governor Edward G. Rendell.  "We believe that they would be better
served by reaching an amicable resolution to this problem, which
will pay Bionol in accordance with the Take or Pay Agreement.  If
they are unwilling to do so, I am prepared to take all the steps
that are necessary to protect the interests of the Commonwealth in
this matter."

In the meantime, the plant continues to operate, producing over
300,000 gallons of renewable fuel per day while purchasing over
100,000 bushels of corn, much of it locally grown.

                         About Lukoil

Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX,
RTS: LKOH) -- explores and produces
oil & gas, petroleum products and petrochemicals, and markets
the outputs.  Most of the Company's exploration and production
activity is located in Russia, and its main resource base is in
Western Siberia.

                         *     *     *

OAO Lukoil carries Standard & Poor's BB+ long-term foreign and
local issuer credit ratings with a positive outlook.

RAIFFEISENBANK ZAO: Moody's Gives Stable Outlook on 'D+' Rating
Moody's Investors Service has changed to stable from negative the
outlook on ZAO Raiffeisenbank's D+ bank financial strength rating.
At the same time, the outlook on the bank's deposit and senior
debt ratings of Baa3, and subordinated debt rating of Ba1 remains
negative, driven by the negative outlook on D+ BFSR of the bank's
ultimate parent, Raiffeisen Zentralbank Oesterreich AG (RZB).

The outlook change reflects (i) the bank's strengthened liquidity
profile, with liquid assets comprising ca.  45% of total assets at
the end of Q1 2010, (ii) the recent stabilization in asset quality
of ZAO Raiffeisenbank and Moody's expectations that it will not
materially deteriorate going forward, (iii) strong revenue-
generating capacity sufficient to absorb the emerging credit
losses, and (iv) sufficient capitalization to date and Moody's
expectations that it will remain adequate going forward.

"At the end of 2009 ZAO Raiffeisenbank reported a manageable level
of problem loans, comprising 8.2% of non-performing loans and 9.2%
of restructured loans.  As at H1 2010, Moody's has not yet
observed any material increase in these categories of problem
assets.  Furthermore, over the course of 2009 the bank managed to
increase its provisioning coverage to 9.5% of the loan book from
3.7% at the end of 2008.  This level of provisioning was fully
absorbed by the bank's pre-provision income, suggesting that the
bank is able to generate sufficient revenues to cover expected
credit losses, without depleting its capital cushion," said
Yaroslav Sovgyra, a Moscow-based Moody's Vice-President -- Senior
Credit officer and lead analyst for this issuer.

ZAO Raiffeisenbank does not publicly disclose its Tier 1 ratio or
Total capital adequacy ratio.  However, based on the publicly
reported data, the bank's equity-to-asset ratio stood at 15.4% at
year-end 2009 (up from 12% at year-end 2008), suggesting that the
bank is adequately capitalized.

According to Moody's, ZAO Raiffeisenbank's deposit and debt
ratings continue to incorporate a very high probability of
parental support from the bank's ultimate controlling shareholder,
RZB (Baa3 of BCA), resulting in one-notch uplift from ZAO
Raiffeisenbank's BCA of Ba1.  These ratings carry a negative
outlook, driven by the negative outlook on RZB's BFSR of D+;
lowering the parent bank's BFSR would result in a downgrade of ZAO
Raiffeisenbank's deposit and debt ratings.

Moody's previous rating action on ZAO Raiffeisenbank was on 1
April 2009 when the rating agency downgraded the local and foreign
currency ratings for long-term deposits to Baa3 from Baa1,
following the downgrade of RZB's BFSR to D+ (negative).
Concurrently, the short-term deposit rating was downgraded to
Prime-3 from Prime-2.  The bank's senior unsecured debt rating was
downgraded to Baa3, and the subordinated debt rating was
downgraded to Ba1.

Headquartered in Moscow, ZAO Raiffeisenbank reported total
consolidated IFRS assets of RUB512 billion (US$17 billion) and net
consolidated income of RUB5.4 billion (US$180 million) at year-end

ROSEVROBANK OAO: Moody's Affirms 'E+' Bank Strength Rating
Moody's Interfax Rating Agency has upgraded the national scale
rating of Rosevrobank to from  Concurrently, Moody's
Investors Service has affirmed these global scale ratings for
Rosevrobank: the bank financial strength rating of E+, the long-
term foreign and local currency bank deposit ratings of B1, the
foreign currency senior unsecured debt rating of B1 and the Not-
Prime short-term foreign and local currency deposit ratings with a
stable outlook.  The NSR carries no specific outlook.  Moscow-
based Moody's Interfax is majority-owned by Moody's, a leading
global rating agency.  The B1/Not-Prime/E+ global scale ratings
reflect Rosevrobank's global default and loss expectation, while
the NSR reflects the ranking of the bank's credit quality
relative only to its domestic peers.

The upgrade of Rosevrobank's NSR reflects (i) the bank's high
capitalisation (with a total capital adequacy ratio of 34.3% as at
Q1 2010) and adequate level of loan loss provisions (12.8% of
total loans as at Q1 2010), while Moody's expects that asset
quality will not materially deteriorate going forward; (ii) the
substantial liquidity buffer, with liquid assets comprising around
47% of total assets at the end of Q1 2010; and (iii) the healthy
level of recurring earnings, which Moody's expects will enable the
bank to absorb the emerging credit losses without depleting its
capital base.

"Rosevrobank emerged from the global financial crisis in better
shape than most of its similarly rated peers.  Moody's therefore
expects the bank to be able to withstand the still challenging
credit conditions in Russia without experiencing a material
deterioration of its financial fundamentals in the medium term,"
said Maxim Bogdashkin, a Moody's analyst and the lead analyst for
the bank.

At the same time, Moody's notes that the bank's E+ BFSR remains
constrained by the relatively modest franchise as well as by the
still evolving corporate governance and risk management practices
with relatively high single-borrower and geographical

Moody's previous rating action on Rosevrobank was implemented on
20 June 2008, when the rating agency assigned a debt rating to
Rosevrobank's Loan Participation Notes.

Headquartered in Moscow, Russia, Rosevrobank reported total
consolidated audited assets of RUB55.9 billion (US$1.8 million) at
31 December 2009, while IFRS-compliant net income for 2009
amounted to RUB1.1 billion (US$38 million).


FTA SANTANDER: Moody's Assigns (P)'Ca' Rating on Class D Notes
Moody's Investors Service has assigned provisional (P) ratings to
these notes issued by FTA SANTANDER CONSUMER SPAIN AUTO 2010-1:

EUR493.5M A Notes, Assigned (P)Aaa
EUR57.0M B Notes, Assigned (P)Aa2
EUR49.5M C Notes, Assigned (P)Baa2
EUR88.5M D Notes, Assigned (P)Ca

FTA SANTANDER CONSUMER SPAIN AUTO 2010-1 is a cash securitization
of auto loans granted to borrowers resident in Spain and
originated by Santander Consumer, E.F.C., S.A. (Not Rated).  The
pool will also be serviced by the same originator.

The provisional pool of underlying assets was, as of May 2010,
composed of a portfolio of 60,556 auto loans, extended to
individuals (96.3%) and small companies (3.7%), to finance the
acquisition of new (90.5%) and used cars (9.5%).  The loans were
originated between 2004 and 2010 and have a weighted average
seasoning of less than a year and a weighted average remaining
life of 4.84 years.  The pool has been mainly originated through
the broker channel (auto dealers) in accordance with the
originator's business model.  The portfolio securitized includes
only fixed- rate loans with standard amortizing loans (French
amortization) and have monthly installments.  Geographically, the
pool is concentrated in Andalusia (27.0%), Catalonia (10.9%) and
Madrid (10.6%).  At closing, there will be no loans in arrears.

According to Moody's, this deal benefits from several credit
strengths, such as a very granular portfolio, a static structure
and a swap agreement guaranteeing an excess spread of 2.5% which
Moody's took into consideration in its analysis.  However, Moody's
notes that the transaction features a number of credit weaknesses,
including a relatively short weighted average seasoning, the
performance deterioration above market average of previous deals
originated Santander Consumer EFC and the originator/servicer not
being rated by Moody's.  However, this last feature is partially
mitigated due to Santander Consumer Finance (A2/P-1) acting as
backup servicer.

Moody's analysis focused primarily on (i) an evaluation of the
underlying portfolio of loans; (ii) the strict eligibility
criteria with which any receivable to be included in the
securitized pool must comply; (iii) historical performance
information; (iv) the swap agreement; (v) the credit enhancement
provided through the GIC account, the excess spread, the reserve
fund and the subordination of the notes; and (vi) the legal and
structural integrity of the transaction.

In Moody's quantitative assessment of the transaction, Moody's
assumed a mean default rate of 12% and a fixed recovery rate of
30% as the main input parameters for Moody's cash-flow model

The V Score for this transaction is Medium, which is in line with
the score assigned for the Spanish Consumer loan ABS sector.
Nonetheless, Moody's note that some additional elements of
volatility were assessed for category "Disclosure of
Securitisation Collateral Pool Characteristics" (M), due to the
lack of details on internal scoring data and for category
"Disclosure of Securitisation Performance" (M/H), due to poor
performance disclosure on previous Santander Consumer EFC deals.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes (May 2023).  In Moody's opinion,
the structure allows for timely payment of interest and ultimate
payment of principal at par with respect to the Series A, B and C
notes, and for ultimate payment of interest and principal at par
with respect to the Series D notes, on or before the rated final
legal maturity date.  Moody's ratings address only the credit
risks associated with the transaction.  Other non-credit risks
have not been addressed, but may have a significant effect on
yield to investors.

Moody's issues provisional ratings in advance of the final sale of
securities, and these ratings only reflect Moody's preliminary
credit opinions regarding the transaction.  Upon a conclusive
review of the final pool of assets and the final documentation
(including the swap documentation), Moody's will endeavour to
assign a definitive rating to the notes.  A definitive rating, if
any, may differ from a provisional rating.

Date of previous rating action: no previous rating action.

GRUPO SACRESA: Files for Protection From Creditors
Sharon Smyth at Bloomberg News reports that Grupo Sacresa filed
for protection from creditors after talks to restructure EUR1.8
billion (US$2.2 billion) of debt failed to win sufficient support
from lenders.

Bloomberg relates Sacresa said in a regulatory filing that the
company filed the request at Mercantile Court Number Two in
Barcelona Tuesday.  According to Bloomberg, the company said Cresa
Patrimonial, Sacresa Terrenos Promocion, Sacresa Terrenos 2 and
Sanahuja Escofet Inmobiliaria are the four units included in the

Separately, Bloomberg News' Ms. Smyth, citing El Economista,
reports that Sacresa owes HSBC Holdings Plc and Royal Bank of
Scotland Group Plc EUR1.02 billion (US$1.3 billion).  Bloomberg
notes the newspaper, citing undisclosed financial documents
related to the loans, said the banks are the most exposed with 58%
of the company's total debt.

Grupo Sacresa is a real-estate company based in Barcelona.


SAAB CARS: Launches First North American Ad Campaign
Saab Cars North America is launching an "aggressive" new
advertising campaign which emphasizes Saab's "return to its
Scandinavian roots," netDockets Blog reports.

According to the report, Saab was sold by General Motors as part
of its restructuring and a new 9-5 model will be in U.S.
dealerships next month.  The report relates that the ad campaign
is called "Change Perspective" and features the tagline "Move Your

The report says that it was developed by McCann Erickson and Lowe
Brindfors.  In addition to radio advertising and print advertising
which will run in publications such as the New York Times, Wall
Street Journal and USA Today, the campaign will also feature
Saab's first television advertisement since 2008, the report adds.

As reported by the Troubled Company Reporter-Europe, Spyker Cars
N.V. confirmed on February 23, 2010, that it finalized the deal
with General Motors Co. purchase Saab Automobile AB.  Going
forward Saab Automobile and Spyker Cars will operate as sister
companies under the umbrella of the Amsterdam Euronext-listed
parent company Spyker Cars N.V.

On June 17, 2010, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that Saab Automobile said it settled with
its creditors under a court-approved proposal to write down
unprioritized debt by 75% as part of its reorganization last year.

The Troubled Company Reporter-Europe, citing Bloomberg News,
reported on Feb. 23, 2009, that Saab filed for protection from
creditors after parent General Motors said it would cut ties with
the Swedish carmaker following two decades of losses.  The
Trollhaettan, Sweden-based company filed for reorganization with a
Swedish district court to separate itself from GM and bring
resources back to Sweden.

On June 25, 2009, Troubled Company Reporter, citing The Wall
Street Journal, reported creditors of Saab approved the
automakers' proposal for settling its debts by paying a quarter of
what it originally owed.  Saab proposed to settle its debts by
paying 25% of about US$1.34 billion it owed to more than 600
creditors, including auto suppliers and the Swedish government.
The vast majority of the debt, almost SEK10 billion, was owed to

                      About Saab Automobile

With an annual production of up to 126,000 cars, Saab Automobile
AB's current models include the 9-3 (available as a convertible or
sport sedan), the luxury 9-5 sedan (also available in a sport
wagon), and the seven-passenger 9-7X SUV.  As it prepared to
separate from General Motors, Saab filed for bankruptcy protection
in February 2009.  A year later, in February 2010, GM sold Saab to
Dutch sports car maker Spyker Cars for about US$400 million in
cash and stock.

U N I T E D   K I N G D O M

BRITISH AIRWAYS: Cabin Crew Union Postpones Strike Ballot
Pilita Clark at The Financial Times reports that British Airways
has warned its cabin crew they face the risk of fresh legal action
or even dismissal if they go ahead with a strike vote that could
see another round of walkouts at the airline this summer.

The FT relates that in a further sign of pressure, BA revealed on
Monday that 4,500 people have formally registered interest in
being hired as Heathrow cabin crew since it started a recruitment
drive last week for 1,250 new staff on sharply reduced salaries at
its main airport base.

According to the FT, the Unite union that represents most of its
13,400 flight attendants said it would launch another strike
ballot on Tuesday on three other issues: (1) the use of volunteer
crews not working under collectively agreed conditions; (2) the
failure to restore staff travel benefits withdrawn from striking
workers; and (3) "vindictive" disciplinary actions arising from
the strikes.  Unite said on Sunday it would postpone this ballot
to allow its members to vote on a new offer BA made on Friday, in
which the airline slightly improved a previous proposal to
guarantee existing staff allowances would not be reduced once the
lower-paid recruits started work later this year, the FT

The FT notes the union said, however, it would not recommend its
members approve the revised offer because it failed to address
issues such as staff travel.  Its leaders strongly suggested the
postponed ballot would eventually go ahead, the FT says.

Unite has not said when it will hold its new ballot, the FT

Separately, Louisa Fahy at Bloomberg News, citing Marina Devitt,
an analyst at Goodbody Stockbrokers in Dublin, reports that the
union's decision to call off a strike ballot may not remove the
risk of walkouts that could disrupt travel plans this summer.

"As things stand, further strike action is looking likely at the
beleaguered flag carrier, which could see passengers choose to fly
with" low-cost airlines instead to avoid potential disruption,
Ms. Devitt wrote in a note to clients Monday, according to

                      About British Airways

Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- 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,

                           *     *     *

As reported in the Troubled Company Reporter-Europe on March 19,
2010, Moody's Investors Service lowered to B1 from Ba3 the
Corporate Family and Probability of Default Ratings of British
Airways plc; and the senior unsecured and subordinate ratings to
B2 and B3, respectively.  Moody's said the outlook is stable.
This concludes the review that was initiated on November 10, 2009.
The rating action reflects Moody's view that credit metrics will
not be commensurate with the previous rating category in the
medium term.  Moody's expect furthermore that metrics will be
burdened in the foreseeable future by the company's significant
pension deficit, which was at GBP2.6 billion for the APS and NAPS
schemes combined as of September 2009 (under IAS).  Moody's
nevertheless understand that under the current agreement with the
trade unions, the cash contributions to these deficits will be
frozen at GBP330 million per year for three years, subject to
approval by the Pensions Regulator and the trustees

EUROPEAN CAPITAL: Completes Restructuring Transaction
American Capital Ltd. (Nasdaq: ACAS) said that effective June 28,
2010, it has restructured its unsecured revolving line of credit
facility and has accepted and is closing private exchange offers
for its public and private notes, reducing its debt by US$1.03
billion.  The Company was to hold a call to discuss the terms of
the transaction on Monday, June 28, 2010 at 3:00 PM EDT.

The transaction covers substantially all of the Company's US$2.4
billion of outstanding unsecured indebtedness and involves
conversion of the line of credit into a term loan facility and the
exchange or repayment of outstanding public and private notes.
Under the terms of the transaction, lenders and noteholders had
the option of receiving either cash or new secured debt, in each
case in the full principal amount of their pre-transaction debt.
Lenders and noteholders holding US$1.03 billion of debt selected
or otherwise received 100% cash for their debt, while lenders and
noteholders holding US$1.31 billion of debt, 56% of pre-
transaction debt, elected to receive new secured loans or notes of
various series.

Effective upon closing the transaction, the Company has US$1.31
billion of secured debt, US$11 million of unsecured debt and
US$1.61 billion of securitized debt and holds approximately US$240
million of unrestricted cash and marketable securities on its
balance sheet.

American Capital also said its wholly owned affiliate European
Capital Limited has completed a restructuring and partial
retirement of its debt.

"I am extremely pleased that we have completed the refinancing of
American Capital's debt, which delevers our balance sheet by more
than US$1 billion," stated Malon Wilkus, Chairman and Chief
Executive Officer.  "Together with the European Capital debt
restructuring, this transaction should enhance shareholder value
and provide us with a capital structure to continue to finance and
grow our portfolio companies and to originate new investments.
The merger and acquisition environment is beginning to perk up,
with a growing number of attractive investment opportunities,
while the banking industry continues to be highly restrictive in
providing middle market growth and transaction financing.  As one
of the largest sources of middle market and mezzanine finance, we
intend to pursue the best opportunities in this attractive

Participants electing notes had the option to select either fixed
rate or floating rate notes.  The interest rate on the new secured
loans and floating rate notes, which represent 21% of the new
secured debt, is LIBOR plus an interest rate margin of 650 basis
points, with a 2% LIBOR floor.  When the outstanding balance of
the new secured debt is below US$1.0 billion, the interest rate
margin will decline to 550 basis points.  Fixed rate notes, which
represent 79% of the new secured debt, will bear interest at a
rate of 8.96%, declining to 7.96% when the principal amount of the
new secured debt is below US$1.0 billion.

Secured notes received by former holders of the unsecured public
notes, which total US$528 million, have no scheduled amortization
before their December 31, 2013 maturity, and are entitled to
certain prepayment fees if redeemed prior to August 1, 2012.
Secured loans and notes received by other creditors, which total
US$779 million and also mature on December 31, 2013, are subject
to scheduled amortization and amortization from a portion of the
proceeds of asset dispositions, excess cash flow and certain
capital raising activities, although there is no scheduled
amortization on the amortizing debt until December 31, 2012.
However, the Company is entitled to retain the first US$580
million that would be otherwise payable from pledged asset
dispositions, excess cash flow and capital raising activities for
new investments or other general corporate purposes.

After the US$580 million threshold is reached, the Company is
required to pay 50% of realized proceeds from dispositions of
pledged assets and annual excess cash flow, which is reduced to
25% when the outstanding balance of the new secured debt is less
than US$950 million.  Also, most proceeds from future debt raises
and, after June 2012, 50% of proceeds of equity raises must be
used to retire the new secured debt, after the US$580 million
threshold is reached.  If, for example, the US$580 million credit
were applied solely to Company dispositions of pledged assets
(i.e., no other prepayment events had occurred), the Company would
retain 100% of the first US$1.16 billion from such dispositions,
assuming the 50% sharing provision were in effect.

The scheduled principal amortizations on the amortizing debt are
as follows:

                                           Amortization to Avoid
                                Minimum          Higher Interest
           Date            Amortization                 Rates(1)
           ----            ------------    ---------------------
    December 31, 2011                US$0            US$70,427,006
    June 30, 2012                    US$0           US$100,000,000
    December 31, 2012      US$120,427,006(2)        US$300,000,000
    -----------------    --------------           ------------
    June 30, 2013          US$500,000,000(3)        US$350,000,000
    -------------        --------------           ------------

       (1) Annual interest rates will increase by 50 basis points
           for each additional amortization that is not met until
           such payments are made.

       (2) Reflects utilization of permitted principal
           amortization deferral of US$200,000,000.

       (3) Reflects payment of scheduled amortization amount of
           US$300,000,000 and payment of deferred amortization of

The new debt is secured by liens on substantially all of the
Company's assets.  At closing, a 2% fee, or US$26 million, was
paid on the US$1.31 billion of new secured debt.  A 1% extension
fee will be paid on the outstanding balance as of December 30,
2011 and December 31, 2012.  Approximately US$11 million in
principal amount of the Company's unsecured public notes did not
participate in the transaction and will remain outstanding on an
unsecured basis and without financial covenants, as a result of
amendments adopted through a consent solicitation conducted
simultaneously with the exchange offers.

Weil, Gotshal & Manges LLP served as principal external legal
counsel to the Company.  Miller Buckfire & Co., LLC, served as
financial advisor to the Company.

The Company was to hold a call to discuss the restructuring on
Monday, June 28, 2010 at 3:00 PM EDT.

A slide presentation will accompany the shareholder call and will
be available at the
Restructuring Update Presentation link to download and print the
presentation in advance of the shareholder call.

An archived audio of the call combined with the slide presentation
will be made available on the Company's Web site after the call on
June 28.  In addition, there will be a phone recording available
from 4:30 pm EDT June 28, 2010 until 11:59 pm EDT July 12, 2010.
If you are interested in hearing the recording of the
presentation, please access the webcast for free on the Web site
or dial (800) 642-1687 (U.S. domestic) or +1 (706) 645-9291
(international).  The access code for both domestic and
international callers is 84840387.

For further information, please contact Investor Relations at
(301) 951-5917 or

                      About American Capital

Bethesda, Md.-based American Capital Ltd. (Nasdaq: ACAS) -- is a publicly traded private
equity firm and global asset manager.  American Capital, both
directly and through its asset management business, originates,
underwrites and manages investments in middle market private
equity, leveraged finance, real estate and structured products.
Founded in 1986, American Capital has US$14 billion in capital
resources under management and eight offices in the U.S., Europe
and Asia.  American Capital and its affiliates will consider
investment opportunities from US$5 million to US$100 million.

O'BRIEN'S IRISH: Two UK Outlets Set to Be Wound Up
Barry O'Halloran at The Irish Times reports that O'Brien's Irish
Sandwich Bars (UK) and its subsidiary O'Brien's Irish Sandwich
Bars (Property UK) are set to be wound up after a year-long
administration process.

The Irish Times recalls a year ago, the British high court placed
the two O'Brien's sandwich bar companies in the charge of
administrator, Cameron Gunn of corporate restructuring specialist
Resolve Partnership.  According to The Irish Times, statements of
affairs for both entities, which were lodged with the British
companies' office last year, showed the parent company had an
estimated deficit of GBP4.8 million while its property subsidiary
had a shortfall of GBP3.4 million.

The Irish Times relates Mr. Gunn lodged a notice formally moving
the companies from administration to dissolution with the
companies' office earlier this month.  The companies will be
deemed to have been dissolved three months from that date, The
Irish Times discloses.

The Irish Times notes Mr. Gunn's final report, which was completed
earlier this month, shows that Bank of Ireland received GBP71,514
on foot of a fixed charge over the group's assets.  There were not
enough funds to pay any other creditors, The Irish Times says.
The administrator had originally hoped to recover GBP400,000 due
to the companies mainly from franchisees, but was ultimately only
able to realise GBP86,617, The Irish Times states.

Last year, O'Brien's businesses in Ireland and Britain ended up
seeking court protection from their creditors largely because many
of the franchise outlets could not meet the rents on their leases,
Bloomberg recounts.

O'Brien's Sandwich Bars -- has
more than 300 stores providing healthy food option in 13 countries
across Europe, Asia, Australia and Africa.  The company sells
made-to-order hot or cold sandwiches -- ShambosTM, Tripledecker,
Wrappos and Toosties.  The extensive selection includes gourmet
coffees, fresh soups, patisseries, deli dishes, salads, snacks and
a wide range of soft drinks, including freshly made smoothies and
juices from the instore juice bar offerings.

VIRGIN MEDIA: Moody's Gives Positive Outlook; Keeps 'Ba3' Rating
Moody's Investors Service has changed the outlook for Virgin Media
Inc. and its rated subsidiaries to positive from stable.  The
corporate family and probability of default ratings for the
company are at Ba3.

The revision in outlook to positive is based on: (i) the company's
continued strong and resilient operating performance despite a
difficult macro-economic environment in 2009 as well as the
persistent intensive competition in the UK market; and (ii) its
solid liquidity position with a significantly improved debt
amortization profile.

During 2009, Virgin Media's revenues increased by 0.7%, largely
supported by an increase in resilient cable revenues (+3.8%) which
accounted for ~65% of overall revenues.  The cable Average Revenue
Per User (ARPU) registered year-on-year improvements across all
quarters in 2009 despite the difficult operating environment.
However, overall revenue growth was partially offset by declines
in mobile revenues (-6%), non-cable revenues (-5.8%) and business
segment revenues (-7.2%).  In Q1 2010, overall revenue growth of
2.9% was driven by growth in cable revenues of 6% while mobile and
business segment revenues continued to decline.  During 2010, the
company expects the mobile and business segment revenues to return
to growth while cable revenues should continue to register good
growth benefiting from (i) Virgin's "scalable" network
infrastructure; (ii) its improving broadband product mix; and
(iii) its growing interactive television products, in Moody's
opinion.  However, the agency notes the highly competitive nature
of the company's markets in video, telephony and broadband
services, which continue to pose a challenge for top-line growth.

Virgin Media's reported OCF (operating income before depreciation,
amortisation, goodwill and intangible asset impairments and
restructuring and other charges -- as calculated by Virgin Media)
margin in 2009 increased to 36% (from 34% in 2008) and further to
37% in Q1 2010.  Moody's expects the company's continued cost
control measures to support the OCF margin in 2010.

The LTM debt/EBITDA (as adjusted by Moody's) for Virgin Media
stood at ~4.4x as of 31 March 2010.  The company generated free
cash flow of GBP351 million (as adjusted by Moody's) in 2009.
During 2010, Moody's believes that continued operating momentum
should translate into meaningful free cash flow after capex (which
company estimates at approximately 16% of revenues).  With a
significantly improved debt amortization profile and no debt
maturities in 2010, as well as cash in hand (GBP 420.7 million as
of March 31, 2010; in May 2010 Virgin used GBP 186 million of its
cash to repay its 2014 outstanding Senior Notes) together with the
expected proceeds (GBP160 million) from the recently announced
sale of VMTV, Virgin currently has a solid liquidity position.
The rating agency notes that the company is currently considering
options for the future use of cash (e.g.  further debt reduction,
dividends, expansion capex and so on).  While Moody's expects the
company to maintain its focus on gradual de-leveraging,
uncertainty over the medium term financial policy still remains.

Upward rating pressure would develop if (i) the company continues
to maintain solid operating momentum, particularly in the areas of
subscriber additions and churn; (ii) its mobile and business
segments return to growth in 2010; and (ii) it demonstrates
commitment to maintaining its leverage well below 4.5x debt/
EBITDA (as adjusted by Moody's) while remaining focused on free
cash flow generation.  Further clarity on the company's medium-
term financial policy that supports the maintenance of leverage
well below a 4.5x threshold (as adjusted by Moody's) over the
medium term would be an important consideration for upward rating

The last rating action on Virgin Media was on 30 March 2010 when
Moody's assigned a (P)Ba1 rating to the new senior secured
facility and the revolving credit facility granted to Virgin Media
Investment Holdings Limited, a subsidiary of Virgin Media.  At the
same time, Moody's also upgraded the ratings on the existing
senior secured notes issued by Virgin Media Secured Finance plc.
to Ba1 from Ba2 and on the senior notes issued by Virgin Media
Finance plc.  to B1 from B2.

Virgin Media, headquartered in Hook, England, is the largest cable
operator in the UK.  In 2009, the company generated GBP3.8 billion
in revenues and GBP1,361 million in reported OCF.


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

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  Go to 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.  Joy A. Agravante, Valerie U. Pascual, Marites O.
Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan 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,
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                 * * * End of Transmission * * *