TCREUR_Public/100709.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Friday, July 9, 2010, Vol. 11, No. 134

                            Headlines



G E R M A N Y

ARCANDOR AG: Administrator Files Damage Claims v. Former Execs
TREVERIA: Deutsche Bank Files for Insolvency on Part of Debt


I R E L A N D

ALLIED IRISH: Among 91 European Banks Facing Stress Tests
ANGLO IRISH: Garda Interviews Staff Over 2008 IL&P Transactions
ANGLO IRISH: Commission of Investigation to Probe Bailout
BANK OF IRELAND: Among 91 European Banks Facing Stress Tests
FINNSTOWN COUNTRY: Bank Appoints Martin Ferris as Receiver

IRISH NATIONWIDE: Commission of Investigation to Probe Bailout


I T A L Y

COMPAGNIA ITALPETROLI: Arbitration With UniCredit Resumes


N E T H E R L A N D S

INTERNATIONAL INDUSTRIAL: Fitch Cuts Issuer Default Rating to 'RD'
SAECURE 7: Moody's Assigns 'Ba2' Rating on Class F Notes


R O M A N I A

STANDARD SNACKS: To Undergo Insolvency Proceedings


R U S S I A

DELANCE LTD: S&P Affirms 'CCC+' Long-Term Corporate Credit Ratings
INTERNATIONAL INDUSTRIAL: S&P Cuts Counterparty Ratings to 'D/D'
MEZHPROMBANK: Fails to Repay EUR200 Million in Eurobonds


S P A I N

IM GRUPO: Moody's Downgrades Rating on Series C Notes to 'Ba3'


S W I T Z E R L A N D

PREPS 2004: CorpRec Appointment Won't Affect Fitch's Rating


U K R A I N E

AZOVSTAL PJSC: Fitch Ups Long-Term Foreign Currency IDR to 'B'
DTEK FINANCE: Fitch Ups Sr. Unsec. Foreign currency Rating to 'B'
DTEK HOLDING: Fitch Ups LT For. Curr. Issuer Default Rating to B
METINVEST BV: Fitch Ups Long-Term Foreign Currency IDR to 'B'
NAFTOGAZ OF UKRAINE: Fitch Affirms CCC LT Foreign Currency IDR


U N I T E D   K I N G D O M

AIRE VALLEY: S&P Puts Note Ratings on CreditWatch Negative
ALBA 2005: S&P Downgrades Rating on Class E Notes to 'B'
CARLYLE CAPITAL: Liquidators File Suits Against Carlyle Group
CLACHAN CONSTRUCTION: In Receivership; Up to 150 Jobs Affected
CANNON TRANSPORT: Enters Voluntary Liquidation

ROYAL BANK: Mulls Sale of GBP3 Billion Commercial Property Loans
TUBE LINES: S&P Withdraws 'BB' Rating on Subordinated D Notes

* UK: Administrations in Recruitment Sector Down in 2Q 2010
* UK: Over 127,000 Companies in Financial Distress, Begbies Says


X X X X X X X X

* EUROPE: 91 Banks to Undergo Stress Tests, CEBS Says

* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy




                         *********



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G E R M A N Y
=============


ARCANDOR AG: Administrator Files Damage Claims v. Former Execs
--------------------------------------------------------------
Daniel Schafer at The Financial Times reports that Klaus Hubert
Goerg, Arcandor AG's insolvency administrator, on Wednesday filed
a EUR175 million (US$221 million) damage claim against the
company's former chairman and chief executive Thomas Middelhoff
and four other former top managers.

According to the FT, a spokesman for Arcandor's insolvency
administrator, said the damage claims had been filed at the state
court of Essen.

The FT relates Mr. Goerg claims that Mr. Middelhoff, on joining
the group as chairman in 2004, was obliged to seek damages against
Arcandor's previous management over excessive rent for stores in a
sale-and-leaseback deal, but he failed to do so.  The FT says on
joining the group Mr. Middelhoff tried to prevent it from
bankruptcy with his own deal to sell and rent back Arcandor's
remaining department stores to a consortium led by a Goldman Sachs
fund.

The FT notes people close to the situation said Mr. Middelhoff had
insurance he would draw on if damage claims should prove to be
successful.

                        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.


TREVERIA: Deutsche Bank Files for Insolvency on Part of Debt
------------------------------------------------------------
Business Financial Newswire, citing StockMarketWire.com, reports
that Treveria says Deutsche Bank has filed for insolvency on part
of a loan portfolio on one of its debt facilities.

According to the report, the bank, acting as the servicing agent
of Treveria's first Deutsche Bank/Citigroup debt facility, has
taken the move on part of the facility relating to certain German
property holding companies.  Treveria says this comprises EUR329
million out of the facility's loan value of EUR553 million and
represents 19% of the company's total debt facilities, the report
notes.

Treveria is a German retail-focused property investment company.


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I R E L A N D
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ALLIED IRISH: Among 91 European Banks Facing Stress Tests
---------------------------------------------------------
Simon Carswell at The Irish Times reports that the Committee of
European Banking Supervisors disclosed that Bank of Ireland and
Allied Irish Banks are among a group of 91 banks facing Europe-
wide stress tests to assess potential losses on sovereign debt and
greater economic strain.

According to the report, the CEBS said the tests will cover 65% of
the EU banking system.

The report says Bank of Ireland and AIB have already been
subjected to much tougher tests by the Financial Regulator.  The
tests determined that Bank of Ireland required EUR2.66 billion to
cover rising losses, while AIB needed a further EUR7.4 billion,
the report discloses.

Bank of Ireland boosted its reserves by almost EUR3 billion
following a capital-raising program, while AIB is selling its
Polish, US and UK businesses to help raise some of the required
capital, the report states.

The report relates the CEBS said both AIB and Bank of Ireland have
been stress-tested ahead of the Irish government's
recapitalization last March and that up-to-date data on their
balance sheets has "already been subjected to rigorous analysis".
The report notes the EU banking regulator has said that its
so-called prudential capital assessment review (PCAR) for the
banks "involved intense scrutiny and challenge of their balance
sheets".

Allied Irish Banks, p.l.c., together with its subsidiaries --
http://www.aibgroup.com/-- 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.

                           *     *     *

Fitch Ratings affirmed Allied Irish Banks plc continues to carry a
'D/E' individual rating from Fitch Ratings.  The rating was
affirmed by Fitch in December 2009.


ANGLO IRISH: Garda Interviews Staff Over 2008 IL&P Transactions
---------------------------------------------------------------
The Garda investigation into the EUR7 billion transactions between
Anglo Irish Bank and Irish Life & Permanent is in the advanced
stages of interviewing Anglo staff to determine who reported and
sanctioned them, Simon Carswell writes at The Irish Times.

According to The Irish Times, the Garda Bureau of Fraud
Investigation has interviewed key personnel still working at the
nationalized bank to ascertain who initiated the transactions, who
processed them and who signed off on them.

The EUR7.45 billion funding arrangements agreed with IL&P at
Anglo's crucial financial year-end period at September 2008 are
the current focus of the Garda, The Irish Times notes.  The IL&P
transactions flattered Anglo's balance sheet at the end of that
month, masking heavy withdrawals of customer deposits at the peak
of the financial crisis, The Irish Times states.  The Irish Times
says the inquiry is assessing whether instructions were given
within the bank to exclude the transactions from the normal
internal reporting channels and emails are being analyzed to
determine whether this occurred.

The investigation by the Garda is running in tandem with an
inquiry by the Office of the Director of Corporate Enforcement
(ODCE), both of which are assessing the IL&P transactions, The
Irish Times discloses.

On May 31, 2010, the Troubled Company Reporter-Europe, citing The
Irish Times, reported that Paul Appleby, the director for
corporate enforcement, said that the inquiries he is conducting
into matters relating to Anglo Irish Bank will be finished in
"months rather than years".  The Irish Times disclosed
the Anglo inquiry is the most complex conducted to date by the
office, and involves a number of matters including:

    * the provision by Anglo in 2008 of financial assistance for
      the purchase of its shares;

    * matters associated with the loans made by Anglo to its
      directors over a number of years, and

    * matters relating to the declared level of customer deposits
      at Anglo in 2008.

Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/--
operates in three core areas: business lending, treasury and
private banking.  The Bank's non-retail business is made up of
more than 11,000 commercial depositors spanning commercial
entities, charities, public sector bodies, pension funds, credit
unions and other non-bank financial institutions.  The Company's
retail deposits comprise demand, notice and fixed term deposit
accounts from personal savers with maturities of up to two years.
Non-retail deposits are sourced from commercial entities,
charities, public sector bodies, pension funds, credit unions and
other non-bank financial institutions.  In addition, at September
30, 2008, its non-retail deposits included deposits from Irish
Life Assurance plc.  The Private Bank offers tailored products and
solutions for high net worth clients and operates the Bank's
lending business in Ireland and the United Kingdom.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed Anglo Irish Bank Corporation's lower
Tier 2 subordinated debt downgraded to 'CCC' from 'BBB+'.  Fitch
affirmed the rating on the bank's Upper Tier 2 subordinated notes
at 'CC'.  It also affirmed the rating on the bank's Tier 1 notes
at 'C'.


ANGLO IRISH: Commission of Investigation to Probe Bailout
---------------------------------------------------------
Emmet Oliver and Fionnan Sheahan at Independent.ie report that the
bailout of Anglo Irish Bank and Irish Nationwide will be examined
by a top-level inquiry for the first time.

The Irish government had previously refused to extend the
investigation beyond the September 2008 period, the report notes.
The report says the banking inquiry will now have the powers to
investigate events that could potentially embarrass the
government.

According to the report, a new Commission of Investigation, which
begins in a few weeks, will investigate:

    * Why Anglo was not allowed to fold in September rather than
getting a guarantee and then relieving billions in capital from
the government.

    * Why the government decided to protect investors holding
highly risky bonds in Anglo.

    * The back-to-back deposits organized by Anglo and Irish Life
& Permanent in 2008.

    * What regulators and the government knew about reckless
lending practices carried out by Michael Fingleton at Irish
Nationwide.

    * How ex-Anglo chief Sean FitzPatrick hid EUR87 million in
loans he had with the bank.

    * The building up of a hidden stake in Anglo by businessman
Sean Quinn and attempts by Anglo to sell some of this stake to a
so-called 'golden circle'.

The new head of the commission, who will be an international
expert, is to be named before the weekend, the report discloses.

A separate independent review of the Department of Finance should
be completed by the end of this year, the report states.  The
government continues to insist that the Department of Finance's
political handling of the banking crisis did not need to be
examined by the commission of investigation, the report notes.

Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/--
operates in three core areas: business lending, treasury and
private banking.  The Bank's non-retail business is made up of
more than 11,000 commercial depositors spanning commercial
entities, charities, public sector bodies, pension funds, credit
unions and other non-bank financial institutions.  The Company's
retail deposits comprise demand, notice and fixed term deposit
accounts from personal savers with maturities of up to two years.
Non-retail deposits are sourced from commercial entities,
charities, public sector bodies, pension funds, credit unions and
other non-bank financial institutions.  In addition, at September
30, 2008, its non-retail deposits included deposits from Irish
Life Assurance plc.  The Private Bank offers tailored products and
solutions for high net worth clients and operates the Bank's
lending business in Ireland and the United Kingdom.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed Anglo Irish Bank Corporation's lower
Tier 2 subordinated debt downgraded to 'CCC' from 'BBB+'.  Fitch
affirmed the rating on the bank's Upper Tier 2 subordinated notes
at 'CC'.  It also affirmed the rating on the bank's Tier 1 notes
at 'C'.


BANK OF IRELAND: Among 91 European Banks Facing Stress Tests
------------------------------------------------------------
Simon Carswell at The Irish Times reports that the Committee of
European Banking Supervisors disclosed that Bank of Ireland and
Allied Irish Banks are among a group of 91 banks facing Europe-
wide stress tests to assess potential losses on sovereign debt and
greater economic strain.

According to the report, the CEBS said the tests will cover 65% of
the EU banking system.

The report says Bank of Ireland and AIB have already been
subjected to much tougher tests by the Financial Regulator.  The
tests determined that Bank of Ireland required EUR2.66 billion to
cover rising losses, while AIB needed a further EUR7.4 billion,
the report discloses.

Bank of Ireland boosted its reserves by almost EUR3 billion
following a capital-raising program, while AIB is selling its
Polish, US and UK businesses to help raise some of the required
capital, the report states.

The report relates the CEBS said both AIB and Bank of Ireland have
been stress-tested ahead of the Irish government's
recapitalization last March and that up-to-date data on their
balance sheets has "already been subjected to rigorous analysis".
The report notes the EU banking regulator has said that its
so-called prudential capital assessment review (PCAR) for the
banks "involved intense scrutiny and challenge of their balance
sheets".

Headquartered in Dublin, Bank of Ireland --
http://www.bankofireland.com/-- provides a range of banking and
other financial services.  These include checking and deposit
services, overdrafts, term loans, mortgages, business and
corporate lending, international asset financing, leasing,
installment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor, trustee,
life assurance and pension and investment fund management, fund
administration and custodial services and financial advisory
services, including mergers and acquisitions and underwriting.
The Company organizes its businesses into Retail Republic of
Ireland, Bank of Ireland Life, Capital Markets, UK Financial
Services and Group Centre.  It has operations throughout Ireland,
the United Kingdom, Europe and the United States.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed the rating on Bank of Ireland's Tier
1 notes at 'CCC' (ISINs: XS0268599999, US055967AA11 and
USG12255AA64).

At the same time, Moody's Investors Service placed Bank of
Ireland's D bank financial strength rating (BFSR -- mapping to a
baseline credit assessment of Ba2) on review for possible upgrade,
previously they had a developing outlook.


FINNSTOWN COUNTRY: Bank Appoints Martin Ferris as Receiver
----------------------------------------------------------
Simon Carswell and Fiona Reddan at The Irish Times report that
Martin Ferris of Ferris Associates has been appointed receiver of
Finnstown Country House by the Bank of Scotland (Ireland).

According to the report, Mr. Ferris has appointed Dalata, a hotel
operating company headed by former Jurys Doyle chief executive Pat
McCann, to run the hotel.

The Finnstown Country House in Lucan, Co Dublin is owned by FTC
Hotel, a company connected with businessman Jim Mansfield's
Mansfield Group.  It currently employs approximately 55 people,
according to The Irish Times.


IRISH NATIONWIDE: Commission of Investigation to Probe Bailout
--------------------------------------------------------------
Emmet Oliver and Fionnan Sheahan at Independent.ie report that the
bailout of Anglo Irish Bank and Irish Nationwide will be examined
by a top-level inquiry for the first time.

The Irish government had previously refused to extend the
investigation beyond the September 2008 period, the report notes.
The report says the banking inquiry will now have the powers to
investigate events that could potentially embarrass the
government.

According to the report, a new Commission of Investigation, which
begins in a few weeks, will investigate:

    * Why Anglo was not allowed to fold in September rather than
getting a guarantee and then relieving billions in capital from
the government.

    * Why the government decided to protect investors holding
highly risky bonds in Anglo.

    * The back-to-back deposits organized by Anglo and Irish Life
& Permanent in 2008.

    * What regulators and the government knew about reckless
lending practices carried out by Michael Fingleton at Irish
Nationwide.

    * How ex-Anglo chief Sean FitzPatrick hid EUR87 million in
loans he had with the bank.

    * The building up of a hidden stake in Anglo by businessman
Sean Quinn and attempts by Anglo to sell some of this stake to a
so-called 'golden circle'.

The new head of the commission, who will be an international
expert, is to be named before the weekend, the report discloses.

A separate independent review of the Department of Finance should
be completed by the end of this year, the report states.  The
government continues to insist that the Department of Finance's
political handling of the banking crisis did not need to be
examined by the commission of investigation, the report notes.

Irish Nationwide Building Society, headquartered in Dublin,
Ireland, had total assets of EUR14.4 billion at year-end 2008.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings downgraded the Individual rating of Irish
Nationwide Building Society to 'F' from 'E'.  The rating has been
downgraded to 'F' to reflect that, in Fitch's opinion, it would
have defaulted if it had not received external support.


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I T A L Y
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COMPAGNIA ITALPETROLI: Arbitration With UniCredit Resumes
---------------------------------------------------------
Marco Bertacche at Bloomberg News reports that arbitration resumes
between Compagnia Italpetroli SpA, the controlling shareholder of
Italian soccer club AS Roma Spa, and UniCredit SpA over
Italpetroli's future.

As reported by the Troubled Company Reporter-Europe on July 6,
2010, Bloomberg News, citing Il Sole 24, said that the Sensi
family may agree to hand over the ownership of Italpetroli to
UniCredit.  Bloomberg disclosed Il Sole said that the two
companies are involved in a dispute over a EUR325-million debt
(US$407.4 million).  The Financial Times said the team's holding
company faces bankruptcy.


=====================
N E T H E R L A N D S
=====================


INTERNATIONAL INDUSTRIAL: Fitch Cuts Issuer Default Rating to 'RD'
------------------------------------------------------------------
Fitch Ratings has downgraded Russia-based International Industrial
Bank's Long-term foreign and local currency Issuer Default Ratings
to 'RD' (Restricted Default) from 'C'.

The downgrade follows confirmation from the bank that repayment of
its EUR200 million eurobond, which matured yesterday, has not
occurred and the bank is working on the restructuring terms to be
presented to bondholders in the near term.  In Fitch's view, the
default on the eurobond reflects the liquidity pressure the bank
is experiencing, and suggests that the bank may also be in default
on other (non-public) obligations.

At the same time, Fitch notes that IIB has, as indicated in the
bank's notice of default, reached agreement with the Central Bank
of Russia (CBR) on the restructuring of its uncollateralized
borrowings from the CBR, full repayment of which is reportedly
planned by January 2011.  However, the precise terms, including
the repayment schedule on these restructured facilities and any
collateral pledged, have not been disclosed.

If IIB is successful in restructuring its overdue indebtedness and
once more becomes current on its obligations, Fitch will upgrade
the bank's ratings.  However, the scope of any upgrade could be
limited given concerns about the quality of the bank's assets and
the ability of these to generate cash to repay creditors.

The rating actions are:

  -- Long-term foreign and local currency IDRs: downgraded to 'RD'
     from 'C'

  -- Senior unsecured debt: affirmed at 'C'; Recovery Rating 'RR4'

  -- Short-term foreign currency IDR: downgraded to 'RD' from 'C'

  -- Individual Rating: downgraded to 'F' from 'E'

  -- Support Rating: affirmed at '5'

  -- Support Rating Floor: affirmed at 'No Floor'

  -- National Long-term Rating: downgraded to 'RD(rus)' from
     'C(rus)'

  -- Senior unsecured domestic debt: affirmed at 'C(rus)'

At end-Q110, IIB was the 28th-largest bank in Russia by total
assets.  Sergey Pugachev, a member of the upper house of the
Russian Parliament, controls an 81% stake in the bank.  Fitch
placed IIB's ratings on Rating Watch Negative on June 9, 2010, and
downgraded the Long-term IDR to 'CCC' on June 17, 2010, and
further to 'C' on June 25, 2010, reflecting the bank's weak
liquidity position ahead of upcoming debt repayments.


SAECURE 7: Moody's Assigns 'Ba2' Rating on Class F Notes
--------------------------------------------------------
Moody's Investors Service assigned definitive credit ratings to
these classes of notes issued by SAECURE 7 B.V.:

  -- Aaa to Euro 1,017,500,000 Senior Class A Mortgage-Backed
     Notes 2010 due 2093

  -- Aa1 to Euro 22,000,000 Mezzanine Class B Mortgage-Backed
     Notes 2010 due 2093

  -- Aa1 to Euro 16,500,000 Mezzanine Class C Mortgage-Backed
     Notes 2010 due 2093

  -- Aa3 to Euro 22,000,000 Junior Class D Mortgage-Backed Notes
     2010 due 2093

  -- A3 to Euro 22,000,000 Junior Class E Mortgage-Backed Notes
     2010 due 2093

  -- Ba2 to Euro 11,000,000 Subordinated Class F Notes 2010 due
     2093

The transaction represents a securitization of Dutch prime
mortgage loans backed by residential properties located in the
Netherlands and originated by AEGON Levensverzekering N.V. (not
rated).  The transaction was arranged by JP Morgan.  The portfolio
will be serviced by AEGON Leven.

The non-amortizing reserve fund was funded at 1.0 per cent of the
total amount of the class A, B, C, D and E notes outstanding at
closing.  The total credit enhancement for the Aaa rated Class A
notes is 8.5 per cent.  Apart from the reserve fund, the
transaction benefits from an excess margin of 50 bps through the
swap agreement.  The swap counterparty is Rabobank (Aaa/P-1).

The expected portfolio loss of 0.70% and the MILAN Aaa required
credit enhancement of 7.0% serve as input parameters for Moody's
cash flow and tranching model, which is based on a probabilistic
lognormal distribution as described in the report "The Lognormal
Method Applied to ABS Analysis", published in September 2000.
Current economic conditions in the Netherlands, with rising
unemployment forecasted to reach 7.9% in Q4 2010, are likely to
drive delinquencies up in the short to medium term.  Additionally,
house prices have fallen by 3.2% in Q1 2010 from their peak in Q3
2008.  Nevertheless, house prices have stabilized in H2 2009 and
are steadily increasing since Q3 2009 as described in Moody's
report "Dutch RMBS Indices", June 2010.  To account for this
macroeconomic uncertainty, Moody's has increased the expected loss
assumption from 0.40% in SAECURE 5 B.V. closed in April 2005 to
0.70% in this transaction.  Given the historical performance of
the Dutch RMBS market and the originator's precedent transactions
(in which pools with similar risk characteristics have been
securitized), Moody's believes the assumed expected loss is
appropriate for this transaction.

Key drivers for the MILAN Aaa CE number, which is in line with
other prime Dutch RMBS transactions closed in 2010, are the LTV
distribution of the portfolio (about 41% of the pool consist of
loans with a Loan-to-Market-Value of above 100%), the portion of
interest-only loans without an additional repayment vehicle (about
52% of the pool consists of interest-only loans without an
additional repayment vehicle), and the availability of a NHG-
guarantee for 6.1% of the loans in the pool.  Another key
characteristic of this transaction is that approximately 13.7% of
the portfolio is linked to life insurance policies (life mortgage
loans), which are exposed to set-off risk in case the insurance
company goes bankrupt.  The seller has provided loan-by-loan
insurance company counterparty data, whereby all life insurance-
linked products are linked to insurance policies provided by AEGON
Leven, which is not rated by Moody's.  Moody's has considered the
rating of the ultimate parent company, AEGON N.V. (A3), and stress
tested rating levels to measure the impact on the ratings of the
notes.

The V-Score for this transaction is Low/Medium, which is in line
with the V-Score assigned for the Dutch RMBS sector, mainly due to
the fact that it is a standard Dutch prime RMBS structure for
which Moody's have over 10 years of historical performance data.
The primary source of uncertainty surrounding Moody's assumptions
is the current macroeconomic environment, in which property values
are falling and unemployment continues to rise.  Operational risks
relating to the servicing arrangement given that the contractual
servicer (AEGON Leven) is not rated by Moody's and that there are
no back-up arrangements for the servicing and cash management are
another source of uncertainty.  This risk is mitigated to a
certain extent by the fact that AEGON Leven's ultimate parent
company AEGON N.V. is rated A3 by Moody's.  V-Scores are a
relative assessment of the quality of available credit information
and of the degree of dependence on various assumptions used in
determining the rating.  High variability in key assumptions could
expose a rating to more likelihood of rating changes.  The V-Score
has been assigned according to the report "V-Scores and Parameter
Sensitivities in the Major EMEA RMBS Sectors" published in April
2009.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes.  In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal at par 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.


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R O M A N I A
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STANDARD SNACKS: To Undergo Insolvency Proceedings
--------------------------------------------------
Mediafax.ro reports that the Bucharest court has approved the
commencement of insolvency proceedings for Standard Snacks, at a
creditor's request.

The report relates the court named Casa de Insolventa Transilvania
to manage the insolvency procedures.  According to the report,
Piraeus Leasing asked for Standard Snacks' insolvency over a
EUR100,000 debt.

Standard Snacks is a snacks and chips maker and distributor
headquartered in Romania. The company employs around 400 people.
It has has ten units countrywide, according to Mediafax.ro.


===========
R U S S I A
===========


DELANCE LTD: S&P Affirms 'CCC+' Long-Term Corporate Credit Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
'CCC+' long-term corporate credit ratings on Delance Ltd., the
holding company of Russian car retailer Rolf Group.  In addition,
S&P affirmed the 'CCC' issue-level rating on the $149.973 million
senior unsecured notes due in June 2011, which were issued by
Colgrade Ltd., the financing vehicle of Delance Ltd.

The '5' recovery rating on these notes is unchanged, indicating
S&P's expectation of modest (10%-30%) recovery in the event of a
payment default.  All the ratings were subsequently withdrawn at
Rolf's request.  The outlook on the long-term corporate credit
rating at the time of the rating withdrawal was negative.


INTERNATIONAL INDUSTRIAL: S&P Cuts Counterparty Ratings to 'D/D'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long- and
short-term counterparty credit ratings on Russia-based
International Industrial Bank to 'D/D' (default) from 'CC/C'.

S&P downgraded IIB to 'D' because it was unable to pay its
EUR200 million 9.0% senior unsecured loan participation notes that
matured on July 6, 2010.  IIB also issued a default notice on its
US$200 million 11.0% loan participation notes due 2013.

IIB lends to commercial and industrial projects run by United
Industrial Corporation (not rated), which is affiliated with
Sergey Pugachyov, a businessman and member of the Federation
Council of Russia, the upper chamber of the parliament of the
Russian Federation.  Mr. Pugachyov and his family own 81% of IIB.
The bank's senior managers own the rest.

IIB was already unable to repay its borrowings from the Central
Bank of Russia in June.  The CBR has extended the maturity of its
uncollateralized loans to IIB until January 2011.  Unsecured loans
from CBR totaled more than one-third of IIB's liabilities on
June 1, 2010.  IIB reportedly is in talks with the CBR regarding
the sale or pledge of some of Mr. Pugachyov's nonbanking assets in
a potential workout agreement that may include other creditors.
S&P believes that at present IIB's access to additional liquidity
is insufficient to meet its general obligations.


MEZHPROMBANK: Fails to Repay EUR200 Million in Eurobonds
--------------------------------------------------------
The Financial Times reports that Mezhprombank, a mid-sized Russian
bank owned by Sergei Pugachyov, the Kremlin-connected senator and
industrial magnate, has failed to repay EUR200 million (US$251
million) in eurobonds.

The bank is asking bondholders to extend the maturity of the bond
for a maximum of one year under the terms of a restructuring deal,
people familiar with the proposal said on Wednesday, according to
the FT.

Its controlling shareholder, Mr. Pugachyov, is guaranteeing that
part of the funds raised from the sale of his biggest assets, two
shipyards in St. Petersburg, will go towards paying off the
bondholders in full, the FT states.

The FT recalls Mr. Pugachyov has been scrambling to raise funds to
pay down the eurobond since early last month when he first tried
to sell his shipyards, Severnaya Verf and Baltiisky Zavod, to the
state-owned shipbuilding corporation, OSK, for about US$3 billion.
But the two sides failed to agree on a price in time -- and in a
sign the bank was in distress, it failed to pay down more than
RUR10 billion (US$322 million) of uncollateralized loans owed to
the central bank, the FT recounts.

According to the FT, people familiar with the situation said
bondholders now have until July 21 to decide whether to support
the bank's restructuring proposal.  The FT notes the people said
if the bondholders agree, the bank will immediately pay down EUR18
million owed in coupon payments on the bond.

A cross default was also triggered on a US$200 million bond the
bank issued this year that falls due in 2013, the FT discloses.
According to the FT, one person close to the matter said the bank
was asking those bondholders to bide their time.

The FT relates a person close to the bank said on Wednesday that
Mr. Pugachyov's holdings in the shipyards would be held as
collateral by the central bank as part of a restructuring
agreement on that debt.


=========
S P A I N
=========


IM GRUPO: Moody's Downgrades Rating on Series C Notes to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has downgraded these classes of notes
issued by IM Grupo Banco Popular LEASING 1, FTA:

  -- EUR1,612.8 million Series A notes, Downgraded to Aa2 from
     Aaa; previously on 9 December 2009 placed under review for
     possible downgrade

  -- EUR40.3 million Series B notes, Downgraded to Baa2 from A1;
     previously on 9 December 2009 placed under review for
     possible downgrade

  -- EUR26.9 million Series C notes, Downgraded to Ba3 from Baa3;
     previously on 9 December 2009 placed under review for
     possible downgrade

Moody's says that the downgrades were prompted by the worse than
expected collateral performance, the weakening of macro-economic
conditions in Spain during the past year, and to a lesser extent
by the reassessment of a legal risk in Spanish leasing
transactions.  The magnitude of the downgrades reflects the
current credit enhancement levels, which combined with the revised
assumptions, lead to a higher expected loss on the rated notes.
The rating actions conclude the review for possible downgrade,
which was initiated on 9 December 2009.

The rapid deterioration in performance is evidenced by the
doubling of the artificial write-offs to EUR31.2 million in April
2010 from EUR13.4 million in August 2009 or 0.90% and 0.42% of the
total securitized pool, respectively.  As of April 2010, 90-360
days delinquencies stood at 2.15% of the current pool balance.

The structure benefits from a fully funded reserve account of
EUR75.6 million.  Due to the revolving nature of the deal, no
repayment of the notes occurred to date.  Payments under the notes
are due on an annual basis and collections have been accumulated
since the last replenishment on the IPD in February 2010.
Initially, the deal allowed for replenishments until February
2011, but, due to the early amortization trigger being hit,
repayment of the notes will start in February 2011.  Currently,
roughly 870mn Euro of principal collections have been received by
the issuer, and will be used to amortize the Class A notes on the
next IPD.

During its analysis, Moody's assessed macro-economic indicators as
well as information made available from the management company,
Intermoney Titulizacion.

Moody's considers the debtors in this transaction to be SMEs and
accordingly used its SME approach to determine the expected mean
default rate.  Moody's first revised its assumption for the
default probability of the Spanish SME debtors to an equivalent
rating in the single B-range for debtors operating in the building
and real estate sector, and in the low Ba-range for non-real-
estate debtors.

In addition, Moody's made DP adjustments to reflect the size of
the debtors' companies, notching down its rating proxy on a
portion of the debtors to reflect additional default risk
associated with micro-sized SMEs.  Moody's equivalent rating for
loans in arrears for more than 30 days was also notched down
depending on the length of time the loans had been in arrears, and
it was notched up for those performing loans not in the building
and real estate sector originated prior to 2006, depending on
their actual seasoning.

Following these adjustments, the portfolio's overall DP equivalent
rating was assumed at B1, which over a weighted-average life of
1.6 years, results in a DP of 8% of current pool balance.  This
translates into a DP assumption of 3.2% on total securitized
balance, compared to 4.05% assumed at closing.  The coefficient of
variation was raised to 48.75% from 45% initially, given the
relative uncertainty around this trend.

The recovery rate remained at 35%.

As mentioned in the press release published on 9 December 2009,
Moody's considered the potential effect of originator bankruptcy
on the recoveries in the transaction.  Recoveries on defaulted
lease contracts following bankruptcy of the originator are
expected to be in the 15% range.  The combination of the revised
assumptions with the current levels of credit enhancement led to
the downgrade of all tranches.

IM Grupo Banco Popular LEASING 1, FTA closed in February 2008.
The deal was originated by several independent entities of Grupo
Banco Popular Espanol, S.A. (Aa3/Prime-1).  This transaction is
backed by a portfolio of credit rights derived from real estate
(3.4%), and equipment and auto leasing contracts (96.6%) to SMEs
in Spain.

Moody's sector outlook for Spanish SME ABS is negative.

The ratings address the expected loss posed to investors by the
legal final maturity date (February 2031).  In Moody's opinion,
the structure allows for timely payment of interest and ultimate
payment of principal at par on or before the final legal maturity
date.


=====================
S W I T Z E R L A N D
=====================


PREPS 2004: CorpRec Appointment Won't Affect Fitch's Rating
-----------------------------------------------------------
Fitch Ratings says there is no rating impact on the PREPS series
of collateralized loan obligation transactions (PREPS 2004-2,
PREPS 2005-1, PREPS 2005-2, PREPS 2006-1, and PREPS 2007-1) from
the appointment of CorpRec Advisory AG, Switzerland as the
replacement recovery manager.  This is because the employees of
CorpRec Advisory AG are the same team who handled the portfolio
companies in the PREPS transactions at the previous recovery
manager.

The role of the recovery manager in these transactions is to
provide advice to weaker performing companies on improving their
financial position and to achieve the maximum recoveries on a
defaulted loan in the wake of a borrower's default.  As Fitch
assumes a zero recovery rate on the loans in the PREPS
transactions, only the recovery manager's activity prior to a loan
default is relevant to Fitch's ratings on the notes.

In view of the strong underperformance of the transactions, the
work-load of the recovery manager is high and the only fees
received from the transactions were senior fees.  The junior fees
are currently not paid, due to lack of funds following interest
payments on the notes and repayment of the principal deficiency
ledger.

Fitch views positively the measures taken to improve the recovery
management of the PREPS transactions.  It notes that CorpRec
Advisory AG will receive additional incentives to provide recovery
management services, as compared to the previous recovery manager.
Most importantly, CorpRec Advisory AG will receive the additional
payments on a monthly basis in order for CorpRec Advisory AG to
cover costs.  As the additional payments will be provided from an
unrated entity outside the PREPS transactions, it is uncertain if
they can be paid throughout the life of all the transactions.
Fitch views these payments as an upside to the performance of the
new recovery manager.  However, if these outside payments do not
take place, or are not covered otherwise, the level of recovery
management services is likely to fall and defaults in the PREPS
transactions may rise.

The PREPS series are cash securitizations of subordinated loans to
medium-sized enterprises located in up to eight jurisdictions,
including Germany, Austria, Switzerland, Italy, Belgium,
Luxembourg, the Netherlands and the UK.

Current ratings of the PREPS transactions are:

PREPS 2004-2 Limited Partnership (PREPS 2004-2):

  -- Class A1 notes: 'BBB-'; Outlook Negative, Loss Severity
     Rating 'LS-2'

  -- Class A2 notes: 'BBB-'; Outlook Negative, 'LS-3'

  -- Class B1 notes: 'B-'; Outlook Negative, 'LS-4'

  -- Class B2 notes: 'B-'; Outlook Negative, 'LS-4'

PREPS 2005-1 Limited Partnership (PREPS 2005-1):

  -- Class A1 notes: 'BB+'; Outlook Negative, 'LS-3'
  -- Class A2 notes: 'BB+'; Outlook Negative, 'LS-3'
  -- Class B notes: 'B-'; Outlook Negative, 'LS-3'

PREPS 2005-2 plc (PREPS 2005-2):

  -- Class A1 notes: 'BB'; Negative Outlook, 'LS-2'
  -- Class A2 notes: 'BB'; Negative Outlook, 'LS-3'
  -- Class B1 notes: 'CC'
  -- Class B2 notes: 'CC'

PREPS 2006-1 plc (PREPS 2006-1):

  -- Class A1 notes: 'BB-'; Negative Outlook, 'LS-2'
  -- Class A2 notes: 'BB-'; Negative Outlook, 'LS-5'
  -- Class B1 notes: 'CC'
  -- Class B2 notes: 'CC'

PREPS 2007-1 plc (PREPS 2007-1):

  -- Class A1 notes: 'B-'; Negative Outlook, 'LS-2'
  -- Class B1 notes: 'CC'


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


AZOVSTAL PJSC: Fitch Ups Long-Term Foreign Currency IDR to 'B'
--------------------------------------------------------------
Fitch Ratings has upgraded six Ukrainian companies, following the
agency's rating action on Ukraine's sovereign ratings.  Ukraine's
Long-term foreign and local currency Issuer Default Ratings were
upgraded to 'B' from 'B-' and Short-term foreign currency IDR was
affirmed at 'B'.  Ukraine's Country Ceiling was upgraded to 'B'
from 'B-'.

The affected Ukrainian corporates and rating actions are:

DTEK Holding Limited

  -- Long-term foreign currency Issuer Default Rating: upgraded to
     'B' from 'B-'; Outlook Stable.  The rating remains
     constrained by Ukraine's Country Ceiling of 'B'.

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
     Stable

  -- National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance B.V.

  -- Senior unsecured foreign currency rating upgraded to 'B' from
     'B-'; Recovery Rating is 'RR4'

Metinvest B.V.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  The rating remains constrained by Ukraine's
     Country Ceiling of 'B'

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B'+ from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- Planned note issue expected senior unsecured rating upgraded
     to 'B(EXP)' from 'B-(EXP)'; Recovery Rating is 'RR4'

  -- National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
     Stable

  -- National Short-term rating: affirmed at 'F1+(ukr)'.

PJSC Azovstal Iron and Steel Works

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B' from 'B-;
     Outlook Stable.  The rating reflects the application of
     Fitch's 'Parent and Subsidiary Rating Linkage' criteria dated
     19 June 2007 as Azovstal is a subsidiary of Metinvest

  -- Short-term local currency IDR: affirmed at 'B'

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-; Recovery Rating is 'RR4'.

  -- National Long-term rating: affirmed at 'AA-(ukr); Outlook
     Stable

MHP S.A.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-'; Recovery Rating is 'RR4'

OJSC Myronivsky Hliboproduct

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- National Long-term rating: upgraded to at 'AA+(ukr)' from
     'AA(ukr)'; Outlook Stable

NJSC Naftogaz Of Ukraine

  -- Long-term foreign currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Long-term local currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Senior unsecured rating upgraded to 'B' from 'B-', based on
     the unconditional and irrevocable guarantee from the
     government of Ukraine; Recovery Rating is 'RR4'.

Fitch no longer maintains Outlooks for its Naftogaz ratings.


DTEK FINANCE: Fitch Ups Sr. Unsec. Foreign currency Rating to 'B'
----------------------------------------------------------------
Fitch Ratings has upgraded six Ukrainian companies, following the
agency's rating action on Ukraine's sovereign ratings.  Ukraine's
Long-term foreign and local currency Issuer Default Ratings were
upgraded to 'B' from 'B-' and Short-term foreign currency IDR was
affirmed at 'B'.  Ukraine's Country Ceiling was upgraded to 'B'
from 'B-'.

The affected Ukrainian corporates and rating actions are:

DTEK Holding Limited

  -- Long-term foreign currency Issuer Default Rating: upgraded to
     'B' from 'B-'; Outlook Stable.  The rating remains
     constrained by Ukraine's Country Ceiling of 'B'.

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
     Stable

  -- National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance B.V.

  -- Senior unsecured foreign currency rating upgraded to 'B' from
     'B-'; Recovery Rating is 'RR4'

Metinvest B.V.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  The rating remains constrained by Ukraine's
     Country Ceiling of 'B'

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B'+ from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- Planned note issue expected senior unsecured rating upgraded
     to 'B(EXP)' from 'B-(EXP)'; Recovery Rating is 'RR4'

  -- National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
     Stable

  -- National Short-term rating: affirmed at 'F1+(ukr)'.

PJSC Azovstal Iron and Steel Works

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B' from 'B-;
     Outlook Stable.  The rating reflects the application of
     Fitch's 'Parent and Subsidiary Rating Linkage' criteria dated
     19 June 2007 as Azovstal is a subsidiary of Metinvest

  -- Short-term local currency IDR: affirmed at 'B'

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-; Recovery Rating is 'RR4'.

  -- National Long-term rating: affirmed at 'AA-(ukr); Outlook
     Stable

MHP S.A.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-'; Recovery Rating is 'RR4'

OJSC Myronivsky Hliboproduct

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- National Long-term rating: upgraded to at 'AA+(ukr)' from
     'AA(ukr)'; Outlook Stable

NJSC Naftogaz Of Ukraine

  -- Long-term foreign currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Long-term local currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Senior unsecured rating upgraded to 'B' from 'B-', based on
     the unconditional and irrevocable guarantee from the
     government of Ukraine; Recovery Rating is 'RR4'.

Fitch no longer maintains Outlooks for its Naftogaz ratings.


DTEK HOLDING: Fitch Ups LT For. Curr. Issuer Default Rating to B
----------------------------------------------------------------
Fitch Ratings has upgraded six Ukrainian companies, following the
agency's rating action on Ukraine's sovereign ratings.  Ukraine's
Long-term foreign and local currency Issuer Default Ratings were
upgraded to 'B' from 'B-' and Short-term foreign currency IDR was
affirmed at 'B'.  Ukraine's Country Ceiling was upgraded to 'B'
from 'B-'.

The affected Ukrainian corporates and rating actions are:

DTEK Holding Limited

  -- Long-term foreign currency Issuer Default Rating: upgraded to
     'B' from 'B-'; Outlook Stable.  The rating remains
     constrained by Ukraine's Country Ceiling of 'B'.

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
     Stable

  -- National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance B.V.

  -- Senior unsecured foreign currency rating upgraded to 'B' from
     'B-'; Recovery Rating is 'RR4'

Metinvest B.V.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  The rating remains constrained by Ukraine's
     Country Ceiling of 'B'

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B'+ from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- Planned note issue expected senior unsecured rating upgraded
     to 'B(EXP)' from 'B-(EXP)'; Recovery Rating is 'RR4'

  -- National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
     Stable

  -- National Short-term rating: affirmed at 'F1+(ukr)'.

PJSC Azovstal Iron and Steel Works

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B' from 'B-;
     Outlook Stable.  The rating reflects the application of
     Fitch's 'Parent and Subsidiary Rating Linkage' criteria dated
     19 June 2007 as Azovstal is a subsidiary of Metinvest

  -- Short-term local currency IDR: affirmed at 'B'

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-; Recovery Rating is 'RR4'.

  -- National Long-term rating: affirmed at 'AA-(ukr); Outlook
     Stable

MHP S.A.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-'; Recovery Rating is 'RR4'

OJSC Myronivsky Hliboproduct

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- National Long-term rating: upgraded to at 'AA+(ukr)' from
     'AA(ukr)'; Outlook Stable

NJSC Naftogaz Of Ukraine

  -- Long-term foreign currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Long-term local currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Senior unsecured rating upgraded to 'B' from 'B-', based on
     the unconditional and irrevocable guarantee from the
     government of Ukraine; Recovery Rating is 'RR4'.

Fitch no longer maintains Outlooks for its Naftogaz ratings.


METINVEST BV: Fitch Ups Long-Term Foreign Currency IDR to 'B'
-------------------------------------------------------------
Fitch Ratings has upgraded six Ukrainian companies, following the
agency's rating action on Ukraine's sovereign ratings.  Ukraine's
Long-term foreign and local currency Issuer Default Ratings were
upgraded to 'B' from 'B-' and Short-term foreign currency IDR was
affirmed at 'B'.  Ukraine's Country Ceiling was upgraded to 'B'
from 'B-'.

The affected Ukrainian corporates and rating actions are:

DTEK Holding Limited

  -- Long-term foreign currency Issuer Default Rating: upgraded to
     'B' from 'B-'; Outlook Stable.  The rating remains
     constrained by Ukraine's Country Ceiling of 'B'.

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
     Stable

  -- National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance B.V.

  -- Senior unsecured foreign currency rating upgraded to 'B' from
     'B-'; Recovery Rating is 'RR4'

Metinvest B.V.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  The rating remains constrained by Ukraine's
     Country Ceiling of 'B'

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B'+ from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- Planned note issue expected senior unsecured rating upgraded
     to 'B(EXP)' from 'B-(EXP)'; Recovery Rating is 'RR4'

  -- National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
     Stable

  -- National Short-term rating: affirmed at 'F1+(ukr)'.

PJSC Azovstal Iron and Steel Works

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B' from 'B-;
     Outlook Stable.  The rating reflects the application of
     Fitch's 'Parent and Subsidiary Rating Linkage' criteria dated
     19 June 2007 as Azovstal is a subsidiary of Metinvest

  -- Short-term local currency IDR: affirmed at 'B'

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-; Recovery Rating is 'RR4'.

  -- National Long-term rating: affirmed at 'AA-(ukr); Outlook
     Stable

MHP S.A.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-'; Recovery Rating is 'RR4'

OJSC Myronivsky Hliboproduct

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- National Long-term rating: upgraded to at 'AA+(ukr)' from
     'AA(ukr)'; Outlook Stable

NJSC Naftogaz Of Ukraine

  -- Long-term foreign currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Long-term local currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Senior unsecured rating upgraded to 'B' from 'B-', based on
     the unconditional and irrevocable guarantee from the
     government of Ukraine; Recovery Rating is 'RR4'.

Fitch no longer maintains Outlooks for its Naftogaz ratings.


NAFTOGAZ OF UKRAINE: Fitch Affirms CCC LT Foreign Currency IDR
--------------------------------------------------------------
Fitch Ratings has upgraded six Ukrainian companies, following the
agency's rating action on Ukraine's sovereign ratings.  Ukraine's
Long-term foreign and local currency Issuer Default Ratings were
upgraded to 'B' from 'B-' and Short-term foreign currency IDR was
affirmed at 'B'.  Ukraine's Country Ceiling was upgraded to 'B'
from 'B-'.

The affected Ukrainian corporates and rating actions are:

DTEK Holding Limited

  -- Long-term foreign currency Issuer Default Rating: upgraded to
     'B' from 'B-'; Outlook Stable.  The rating remains
     constrained by Ukraine's Country Ceiling of 'B'.

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
     Stable

  -- National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance B.V.

  -- Senior unsecured foreign currency rating upgraded to 'B' from
     'B-'; Recovery Rating is 'RR4'

Metinvest B.V.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  The rating remains constrained by Ukraine's
     Country Ceiling of 'B'

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B'+ from 'B';
     Outlook Stable

  -- Short-term local currency IDR: affirmed at 'B'

  -- Planned note issue expected senior unsecured rating upgraded
     to 'B(EXP)' from 'B-(EXP)'; Recovery Rating is 'RR4'

  -- National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
     Stable

  -- National Short-term rating: affirmed at 'F1+(ukr)'.

PJSC Azovstal Iron and Steel Works

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long-term local currency IDR: upgraded to 'B' from 'B-;
     Outlook Stable.  The rating reflects the application of
     Fitch's 'Parent and Subsidiary Rating Linkage' criteria dated
     19 June 2007 as Azovstal is a subsidiary of Metinvest

  -- Short-term local currency IDR: affirmed at 'B'

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-; Recovery Rating is 'RR4'.

  -- National Long-term rating: affirmed at 'AA-(ukr); Outlook
     Stable

MHP S.A.

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- Senior unsecured foreign currency rating: upgraded to 'B'
     from 'B-'; Recovery Rating is 'RR4'

OJSC Myronivsky Hliboproduct

  -- Long-term foreign currency IDR: upgraded to 'B' from 'B-';
     Outlook Stable.  This rating remains constrained by Ukraine's
     Country Ceiling of 'B'.

  -- Long-term local currency IDR: upgraded to 'B+' from 'B';
     Outlook Stable

  -- National Long-term rating: upgraded to at 'AA+(ukr)' from
     'AA(ukr)'; Outlook Stable

NJSC Naftogaz Of Ukraine

  -- Long-term foreign currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Long-term local currency IDR: affirmed at 'CCC'; Negative
     Outlook Withdrawn

  -- Senior unsecured rating upgraded to 'B' from 'B-', based on
     the unconditional and irrevocable guarantee from the
     government of Ukraine; Recovery Rating is 'RR4'.

Fitch no longer maintains Outlooks for its Naftogaz ratings.


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


AIRE VALLEY: S&P Puts Note Ratings on CreditWatch Negative
----------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch negative
its long-term credit ratings on all the notes S&P rates in the
Aire Valley Master Trust.  At the same time, S&P affirmed its 'A-
1+' short-term rating on class 1A1 in Aire Valley Mortgages 2007-1
PLC's series 2007-1.

Aire Valley Master Trust's arrears and losses have increased over
time.  Since its last issuance (July 2008), total arrears have
increased by approximately 50%, to 6.95% from 4.29%.  Cumulative
losses since then have also increased at a faster rate than
previously.

This trust is different from many U.K. master trusts due to its
collateral being predominantly buy-to-let or self-certified (Self-
Cert) (approximately a 78/22 split).  S&P typically see master
trusts backed by prime U.K. mortgage loans, which through the
economic downturn have performed well.  However, Aire Valley
Master Trust's arrears are the second-highest of the trusts S&P
rates (Granite Master Issuer's being the highest).  Pendeford
Master Issuer, which also contains Self-Cert/BTL mortgage loans
(although in different proportions), is probably Aire Valley's
closest peer.

S&P also notes that the trust has an indexed weighted-average
loan-to-value ratio of 83.22%, with 26.60% of its pool having an
indexed loan-to-value ratio greater than 95%, and 60.77% of the
pool greater than 80%.  As the majority of the pool comprises BTL
mortgage loans, S&P expects significant problems for these
borrowers if they wish to remortgage.  With the BTL market for
high LTV ratio loans almost shut, S&P believes any prepayments
Aire Valley receives will most likely be lower-risk, low LTV ratio
mortgages.  This is pertinent, as arrears in the >95% indexed LTV
ratio bucket are 14.13%.  Of these, 5.74% are greater than 12
months in arrears or in repossession, compared with 4.35% of the
<95% indexed LTV ratio bucket being in arrears.

Despite this, S&P has seen arrears in the trust decreasing
recently due to the effect of any artificial increase in the
arrears from the lowering of interest rates working its way out.
S&P will carry out further analysis--including the potential
effect of negative selection in the pool--and will resolve the
CreditWatch placements in due course.

                           Ratings List

         Long-Term Ratings Placed on Creditwatch Negative

                 Aire Valley Mortgages 2004-1 PLC
EUR538 Million, GBP270 Million Mortgage-Backed Floating-Rate Notes
                             Series 3

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              A1          AAA/Watch Neg         AAA
              A2          AAA/Watch Neg         AAA
              B1          AA/Watch Neg          AA
              B2          AA/Watch Neg          AA
              C1          BBB/Watch Neg         BBB
              C2          BBB/Watch Neg         BBB
              D1          BB/Watch Neg          BB
              D2          BB/Watch Neg          BB

                 Aire Valley Mortgages 2005-1 PLC
   EUR340.8 Million, GBP239 Million, $50 Million Asset-Backed
                       Floating-Rate Notes
                            Series 2

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              A1          AAA/Watch Neg         AAA
              A2          AAA/Watch Neg         AAA
              A3          AAA/Watch Neg         AAA
              B1          AA/Watch Neg          AA
              B2          AA/Watch Neg          AA
              C2          BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2006-1 PLC
   EUR124 Million, GBP10 Million, $1.57 Billion Mortgage-Backed
                       Floating-Rate Notes
                            Series 1

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              A           AAA/Watch Neg         AAA
              B1          AA/Watch Neg          AA
              B2          AA/Watch Neg          AA
              B3          AA/Watch Neg          AA
              C2          BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2006-1 PLC
  EUR1.023 Billion, GBP823 Million Mortgage-Backed Floating-Rate
                         Notes Series 2

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              A1          AAA/Watch Neg         AAA
              A2          AAA/Watch Neg         AAA
              A3          AAA/Watch Neg         AAA
              B2          AA/Watch Neg          AA
              B3          AA/Watch Neg          AA
              C2          BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2007-1 PLC
  EUR200 Million, GBP125 Million, $2.075 Billion Mortgage-Backed
                       Floating-Rate Notes
                            Series 1

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              1A1         AAA/Watch Neg         AAA
              1A2         AAA/Watch Neg         AAA
              1A3         AAA/Watch Neg         AAA
              1B          AA/Watch Neg          AA
              1C          BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2007-1 PLC
EUR575 Million, GBP456.25 Million, $700 Million Mortgage-Backed
                   Floating-Rate Notes Series 2

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              2A1         AAA/Watch Neg         AAA
              2A2         AAA/Watch Neg         AAA
              2A3         AAA/Watch Neg         AAA
              2B          AA/Watch Neg          AA
              2C          BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2007-2 PLC
EUR430 Million, GBP857 Million Mortgage-Backed Floating-Rate Notes

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              A1          AAA/Watch Neg         AAA
              A2          AAA/Watch Neg         AAA
              A3          AAA/Watch Neg         AAA
              B           AA/Watch Neg          AA
              C           BBB/Watch Neg         BBB

                 Aire Valley Mortgages 2008-1 PLC
EUR1.572 Billion, GBP1.65 Billion Asset-Backed Floating-Rate Notes

                               Rating
                               ------
              Class       To                    From
              -----       --                    ----
              1-A1        AAA/Watch Neg         AAA
              1-A2        AAA/Watch Neg         AAA
              2-A1        AAA/Watch Neg         AAA
              2-A2        AAA/Watch Neg         AAA
              2-C         BBB/Watch Neg         BBB
              2-D         BB/Watch Neg          BB

                    Short-Term Rating Affirmed

                 Aire Valley Mortgages 2007-1 PLC
  EUR200 Million, GBP125 Million, $2.075 Billion Mortgage-Backed
                       Floating-Rate Notes
                            Series 1

                               A-1+


ALBA 2005: S&P Downgrades Rating on Class E Notes to 'B'
--------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on ALBA 2005 - 1 PLC's
class D and E notes.  S&P has affirmed all other ratings.  At the
same time, S&P has removed from CreditWatch negative its rating on
the class C notes.

To cover principal losses, the issuer needed to draw on its
reserve fund in four consecutive quarters to March 2010.  There
was a small top-up to the reserve fund on the May interest payment
date leaving the reserve at 42.6% of its required amount and 1.17%
of the outstanding note balance.

S&P's expectation of defaults has improved slightly in the past
quarter but is still higher than its expectation at the
transaction's closing date.  Although S&P does expect further
losses in the future, S&P believes these will be lower than those
the transaction has experienced so far.

These defaults and losses, coupled with the reserve fund draws,
have meant credit enhancement is no longer sufficient to support
its ratings on the junior classes of notes, and S&P has downgraded
these notes accordingly.

S&P's analysis shows that the mezzanine and senior classes have
sufficient enhancement so S&P has affirmed these ratings.

Prepayments are low at 2.84% for the three months to May as S&P
believes it is more economical for borrowers to stay on their
current mortgage rate rather than remortgage in the present
mortgage climate.  In S&P's opinion, this will increase extension
risk--the risk that principal is not repaid as soon as expected--
particularly for the more senior classes in the structure.

ALBA 2005-1 closed in November 2005 and is a U.K. nonconforming
transaction securitizing mortgages originated by Preferred
Mortgages Ltd. and Platform Funding Ltd. The collateral consists
of first-ranking mortgages secured over residential properties in
England, Wales, Northern Ireland, and Scotland.

                           Ratings List

                        ALBA 2005 - 1 PLC
        GBP301 Million Mortgage-Backed Floating-Rate Notes

       Ratings Lowered and Removed From CreditWatch Negative

                              Rating
                              ------
             Class       To            From
             -----       --            ----
             D           BBB           BBB+/Watch Neg
             E           B             BB+/Watch Neg

      Rating Affirmed and Removed From CreditWatch Negative

                               Rating
                               ------
              Class       To            From
              -----       --            ----
              C           A+            A+/Watch Neg

                         Ratings Affirmed

                        Class       Rating
                        -----       ------
                        A3          AAA
                        B           AA+
                        MERCs       AAA


CARLYLE CAPITAL: Liquidators File Suits Against Carlyle Group
-------------------------------------------------------------
Jef Feeley and Miles Weiss at Bloomberg News report that
liquidators for Carlyle Capital Corp. Ltd., Carlyle Group's
Guernsey, Channel Islands-based hedge fund that collapsed in March
2008, filed a lawsuit in Delaware against the buyout company,
saying executives lost US$945 million in overly risky investments.

The liquidators contend Carlyle directors turned a blind eye to
questionable investments in residential mortgage-backed securities
and failed to stop the loss of all the company's capital,
Bloomberg says, citing the Delaware suit.

"In the short space of eight months, the entirety of CCC's
capital was spectacularly lost under the reckless and grossly
negligent direction, supervision, management and advice of the
defendants," the liquidators said in the suit, filed Wednesday in
Delaware Chancery Court, according to Bloomberg.

Bloomberg recalls lenders seized Carlyle Capital's assets after it
failed to meet more than US$400 million of margin calls on
mortgage-backed collateral that had plunged in value.  Carlyle
Group, co-founded by David Rubenstein, wound up the fund seven
months after its initial public offering, Bloomberg recounts.

The liquidators also filed suit over the investment losses in
state court in Manhattan on Wednesday, Bloomberg discloses.

Carlyle Group officials said they'd defend themselves against the
fund liquidators' claims, Bloomberg notes.

The Delaware case is Carlyle Capital Corp. Ltd. v. William
Elias Conway Jr., CA5625, Delaware Chancery Court (Wilmington).


CLACHAN CONSTRUCTION: In Receivership; Up to 150 Jobs Affected
--------------------------------------------------------------
Ian Forsyth at The Press and Journal reports that Clachan
Construction has gone into receivership.

The report says most of the firm's 150-strong workforce are
expected to loss their jobs.

The report relates Henderson Loggie was appointed receiver Tuesday
night by the Bank of Scotland at the request of the directors.
According to the report, Henderson Loggie said: "We believe the
failure can be attributed to the general downturn in the
construction industry which has led to lower margins on some
contracts."

The report notes profits at Clachan, set up in 1964, were down in
the most recent set of accounts lodged with Companies House.
They showed the company made a pre-tax profit of GBP18,501 in
2008, compared with GBP37,772 the year before, the report
discloses.  Turnover also fell marginally, to just under GBP18
million, the report states.

Clachan Construction is a construction company based in Perth.


CANNON TRANSPORT: Enters Voluntary Liquidation
----------------------------------------------
Joanna Bourke at RoadTransport.com reports that Cannon Transport
has entered voluntary liquidation following a dispute with its
fuel supplier.

According to the report, a petition to wind-up the firm was
presented by creditor GB Oils on Friday May 21 to be heard at
Newcastle-Upon-Tyne Law Courts on July 29.  However, on June 23,
the company called in liquidators Ian Kings and Steven Ross of RSM
Tenon Recovery, the report relates.

Cannon Transport is a Tyne and Wear-based haulier.  It held an O-
license for 22 vehicles and 16 trailers from its two units on the
Bentall Business park.


ROYAL BANK: Mulls Sale of GBP3 Billion Commercial Property Loans
----------------------------------------------------------------
Nathalie Thomas at The Scotsman reports that Royal Bank of
Scotland is planning to sell off as much as GBP3 billion in
commercial property loans.

The report says the bank is seeking to reduce its exposure to the
commercial property market by a further GBP20 billion over the
next five years as part of RBS chief executive Stephen Hester's
strategy to downsize the business and focus on several core
markets.  The lion's share of these loans are expected to expire
naturally as customers pay them off but it is believed some GBP3
billion will need to be off-loaded via alternative methods, the
report states.

Commercial property experts say the method of packaging up a
series of loans will be closely watched by competitors -- in
particular Lloyds Banking Group which inherited some GBP80 billion
of property loans from Peter Cummings' team at Bank of Scotland
Corporate, the report discloses.

According to the report, analysts said there could be a number of
potential buyers including Blackstone, LoanStar and Delancey when
the loan book is marketed.  The plan is understood to be in the
"early stages", the report notes.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


TUBE LINES: S&P Withdraws 'BB' Rating on Subordinated D Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its ratings
to 'AA' from 'AA-' on the GBP1.15 billion senior unsecured A-1
notes and to 'AA' from 'BBB' on the GBP76.5 million senior
unsecured B notes issued by U.K.-based underground rail
infrastructure funding company Tube Lines (Finance) PLC.  At the
same time, S&P removed all ratings on TLF from CreditWatch with
positive implications, where they had been placed on May 11, 2010.
Prior to that, the ratings had been on CreditWatch negative since
Feb. 2, 2010.  S&P also assigned a 'AA' rating to the
GBP95 million senior unsecured A-2C notes issued by TLF and
withdrew S&P's 'BBB-' debt rating on the GBP150.3 million
subordinated C notes and its 'BB' debt rating on the
GBP21.5 million subordinated D notes following their full
repayment.

The rating actions reflect a full and timely guarantee on the
rated notes that has been put in place by Transport for London
(TfL; AA/Stable/A-1+), following its acquisition of the Tube Lines
Group on June 27, 2010.  Consequently, the ratings on the TLF
notes are now directly linked to the 'AA' long-term rating on TfL.

The ratings on TfL continue to reflect its positive relationship
with the central government and the Department for Transport in
particular, the critical nature of its services for London and
therefore the U.K. economy, and its financial flexibilities.  The
rating is constrained by the risks and debt associated with its
substantial capital plans, and the fiscal challenges facing the
U.K. (AAA/Negative/A-1+).

S&P does not believe that the ratings on TfL have been adversely
affected by the acquisition of the Tube Lines Group (for more
information, see "No Change To Transport for London Rating
Following Planned Acquisition Of Tube Lines," published on May 17,
2010).  Although there will be a slight increase in TfL's exposure
to capital cost overruns as it increases its direct
responsibility, S&P believes this will be readily compensated for
by an increase in autonomy and hence expenditure flexibility.

TfL is responsible for nearly all public transport functions in
London.  It operates through a number of subsidiaries, the largest
of which is London Underground Ltd., which together comprise the
TfL Group.  For the purposes of S&P's analysis, S&P has focused on
the group as a whole.  TfL is also a functional body of the
Greater London Authority (GLA; AA+/Stable/--).

TfL enjoys an extremely strong business position and a near-
monopoly over London's public transport and the associated fares.
In addition, approximately half of its revenues come from
government grant, via the DfT.  S&P understand there could be
significant reductions in the planned level of government grant,
following the U.K. budget on June 22, 2010, which forecast overall
reductions in departmental expenditure of approximately 25% over
four years.  Nevertheless, given the importance of TfL's services
both for London and the U.K. economy, and the financial
flexibilities that TfL enjoys, S&P believes that future grant
reductions are unlikely to undermine TfL's creditworthiness.

Although there are risks and uncertainties associated with TfL's
investment program, its substantial size -- GBP13.5 billion
(excluding works associated with Crossrail and the former Tube
Lines PPP) from 2010/2011 to 2017/2018 -- allows considerable
flexibility to defer, reduce, or cancel individual projects.  TfL
also has responsibility for Crossrail, a GBP15.9 billion major
rail project for London and the southeast of England.  Should the
start-up costs of Crossrail overrun beyond the contingency
provision, TfL's financial obligations are in effect capped under
an agreement with DfT, thereby protecting TfL's credit standing.

                          Ratings List

            Ratings Raised; CreditWatch/Outlook Action

                     Tube Lines (Finance) PLC

                                   To           From
                                   --           ----
      Senior Unsecured (A-1 notes) AA           AA-/Watch Pos
      Senior Unsecured (B notes)   AA           BBB/Watch Pos

                         Ratings Withdrawn

                                   To           From
                                   --           ----
      Subordinated (C notes)       NR           BBB-/Watch Pos
      Subordinated (D notes)       NR           BB/Watch Pos

                         Ratings Assigned

                Senior Unsecured (A-2C notes)   AA


* UK: Administrations in Recruitment Sector Down in 2Q 2010
-----------------------------------------------------------
Recruiter reports that the number of recruitment agencies being
put into the hands of administrators dropped dramatically in the
second quarter of 2010, reaching pre-recessionary levels.

According to analysis by Recruiter, 15 businesses entered
administration during this period, compared to 22 in the previous
quarter and 23 in the final three months of 2008, before the
recession began.

Recruiter notes at time of press, 14 recruitment agencies had
winding-up petitions filed against them forcing them to go to
court to decide their fate, normally made by a creditor attempting
to recoup funds.  Of this total, 63% were filed by HM Revenue &
Customs alone, almost double the percentage made against the wider
industry, Recruiter says.

Recruitment businesses based in the North of England felt the
brunt of the business failures, with six out of the 15 agencies
which went into administration being based in this region,
Recruiter discloses.

The news of a rapid reduction in the number of businesses entering
into administration is overwhelmingly positive; however, it is
clear that owners and directors of recruitment agencies need to
remain vigilant, Recruiter states.  The sector and the economy at
large are not yet out of the woods and will now have to face
aggressive public sector cuts likely to affect traditionally
resistant businesses, particularly those operating in the
healthcare and education sector, Recruiter notes.


* UK: Over 127,000 Companies in Financial Distress, Begbies Says
----------------------------------------------------------------
Begbies Traynor on Thursday released its Q2 2010 Red Flag Alert
statistics, which monitor the early warning signs of company
distress.  The key headlines are:

    * The number of businesses facing financial distress has
fallen by 21% since Q1 2010;

    * The GBP69.5 billion of liabilities at risk of default is up
26% from GBP55 billion in Q1 2010;

    * Average debts of troubled companies have risen 60% to
c. GBP545,000 in Q2 2010 (Q1 2010: c.GBP340,000);

    * 52,000 companies already experiencing distress in the
sectors most dependent on public sector spending (construction,
IT, recruitment, advertising and business services);

    * Outlook for corporate credit availability for Q2 2010 at its
lowest level since the end of 2008; and

    * Begbies Traynor expects the levels of insolvencies to rise
again in H1 2011.

Begbies Traynor said that more than 127,000 companies experienced
"significant" or "critical" financial distress in Q2 2010 between
them owing over GBP69.5 billion to creditors, suppliers and
service providers.

Although the numbers of companies experiencing distress have
fallen (by 21% compared to 161,601 in Q1 2010 and by 31% compared
to previous peak levels of 185,813 in Q2 2009), they remain at
historically high levels (up 15% from 111,089 in Q2 2008).

The GBP69.5 billion of liabilities at risk of default by
businesses experiencing financial distress has increased by 26%
from GBP55 billion in Q1 2010, representing a 60% increase in the
average debts of troubled companies to c.GBP545,000 (Q1 2010:
c.GBP340,000).  This suggests that larger companies are now
experiencing difficulties, implying that the post-recession stress
is migrating out of the SME sector to affect more significant
businesses and therefore, potentially threatening greater job
losses; indicating the continued fragility of the UK's weak
economic recovery.

Ric Traynor, Executive Chairman of Begbies Traynor Group, said:
"We believe that a combination of lenient creditor attitudes and
temporary government support measures, including the extensive use
of monetary instruments, such as quantitative easing and low
interest rates, have all had an effect on reducing the volume of
adverse actions, providing a welcome respite to many companies
that may have otherwise found it difficult to survive."

Mr. Traynor added: "However, we are concerned that the levels of
business distress will increase again, potentially from the first
half of 2011, once the full effects of the coalition government's
fiscal tightening measures impact the economy and particularly
amongst those private sector businesses most dependant on public
sector contracts.  Thereafter, the levels of distress can be
expected to remain pronounced for a number of successive quarters
in line with the experience of recessions over the past 35 years,
when the level of insolvencies grew strongly for two to four years
after GDP stopped shrinking."

             Credit Conditions and Creditor Attitudes

The Bank of England's Credit Conditions survey reported that the
overall availability of credit to corporates increased in Q2 2010.
However, this increase was significantly lower than expected -- a
balance of just 7.1% of lenders reported an increase compared to a
balance of 22.7% of lenders which had previously expected an
improvement in corporate credit availability.

Perhaps more significantly, the outlook for corporate credit
availability for Q3 2010 is now at its lowest level since the end
of 2008 with a balance of 6.5% of lenders expecting an increase in
corporate credit availability compared to a range of 20.5 - 28.9%
in the five consecutive quarters to Q1 2010 (Source: The Bank of
England's Credit Conditions survey).

Begbies Traynor is also seeing growing evidence of less lenient
creditor attitudes.  HM Revenue & Customs is applying greater
scrutiny to applications for its Business Support Scheme ("Time to
Pay").  It introduced an Independent Business Review for
applications over GBP1 million in April 2010 while there is also
evidence of higher rates of rejection of VAT deferral
applications, particularly for larger sums.

Mr. Traynor added: "HMRC's increased scrutiny for applications to
its time to pay scheme, provide early indications that it is
taking a more selective stance towards businesses over their
outstanding liabilities with a focus on helping businesses that
have a genuine chance of survival."

                        Sector Analysis

While the government's well reported austerity measures will be
felt widely, the sectors most directly dependent on public sector
spending include construction, IT, recruitment, advertising and
business services.  In these sectors alone, almost 52,000
companies were experiencing financial distress in the second
quarter of 2010 before the full effects of fiscal tightening
initiatives.  In particular, Construction and IT have shown a much
lower rate of recovery in the second quarter than other sectors,
showing year on year improvements of 17% and 16% respectively
compared to an average improvement across all sectors of 31%.

Mr. Traynor added: "It will not be until after the Government's
Comprehensive Spending Review in October that we will know for
certain the allocation of spending cuts, but there is a growing
risk that, even if the UK avoids a double dip recession, it could
develop a twin track economy, with public-sector dependent
industries facing higher levels of financial distress than sectors
which are less directly linked to government spending cuts."

The manufacturing and retail sectors were among those showing the
strongest year on year improvements, with reductions in businesses
experiencing financial distress of 37% and 38% as they benefitted
from improved export and consumer demand respectively.

Mr. Traynor added: "The manufacturing sector had been expected to
play a major role in an export-led recovery, but recent weak
economic data from China and the US, the challenges facing much of
the Eurozone and concerns over too many simultaneous domestic
austerity programs amongst G20 countries are leading some
economists to question the potential for the UK to heavily rely on
exports for growth, while sharp increases in input cost inflation
put further pressure on many business in the sector."

"Levels of financial distress have improved significantly in the
retail sector but the impact of the government's austerity
measures on salaries and jobs are yet to come, while the sector
will also be faced with an increase to a 20% VAT rate in the
middle of its important January 2011 sale period."

                             Summary

The increasing uncertainty surrounding the outlook for the UK
economy represents a further significant challenge for UK
corporates at a time when many had been preparing their businesses
for recovery.  With over GBP69.5 billion of liabilities still at
risk of default, the potential ripple effect of current levels of
distress could be far-reaching.

Mr. Traynor commented: "The coalition government is trying to
strike a fine balance between reducing the UK's deficit and
maintaining the recovery.  Given the substantial liabilities at
risk of default by businesses in distress, government support
measures will need to be withdrawn gradually to avoid tipping that
balance towards halting the recovery."


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


* EUROPE: 91 Banks to Undergo Stress Tests, CEBS Says
-----------------------------------------------------
Patrick Jenkins, Nikki Tait and Daniel Schafer at The Financial
Times report that European regulators late Wednesday released more
details of the keenly awaited exercise to stress test the
Continent's banking industry, publishing the names of the 91 banks
being probed and a broad idea of the stress scenario.

The FT relates the Committee of European Banking Supervisors, the
umbrella body for Europe's banking regulators, said the banks --
including 27 institutions in Spain, 14 in Germany and six in
Greece -- would be subjected "on aggregate [to an] adverse
scenario [that] assumes a 3 percentage point deviation of [gross
domestic product] for the EU compared to the European Commission's
forecasts over the two-year time horizon".

The CEBS did not reveal the nature of the stress test for the
banks' sovereign debt holdings, the biggest area of concern for
investors, the FT notes.

According to the FT, bankers and regulators said the stress
scenario on Greek sovereign debt had been set at 17% for banks'
trading books, with additional stresses imposed on the banking
book, where investments are held to maturity.

Portuguese sovereign debt would attract an 8% trading book
haircut, with 5%t for Spain, the FT discloses.  According to the
FT, German bankers said the haircut on German debt would be
negligible.

The FT relates people close to the exercise predicted that between
10 and 20 of the 100 banks being tested could fail to pass the
hurdle tier one capital ratio of 6%.  CEBS, as cited by the FT,
said the results would be published on July 23.

Separately, Andrew MacAskill and Jon Menon at Bloomberg News
report that European stress tests on 91 of the region's biggest
banks drew criticism from analysts who said regulators are
underestimating probable losses on Greek and Spanish government
bonds.  Bloomberg relates the CEBS said Wednesday that the tests
are designed to assess how banks will be able to absorb losses on
loans and government bonds.

Bloomberg notes credit markets are pricing in losses of about 60%
on Greek bonds should the government default, more than three
times the level said to be assumed by CEBS.

According to Bloomberg, EU regulators are relying on the stress
tests to restore public confidence in banks amid concern that some
lenders don't have enough capital to withstand a default by a
European country.


* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
----------------------------------------------------------
Authors: Thomas J. Salerno; Craig D. Hansen; Jordan A. Kroop
Publisher: Beard Books
Hardcover: 728 pages
List Price: US$174.95

The newly revised edition of The Executive Guide to Corporate
Bankruptcy is perfectly timed.  As the global economy continues to
deteriorate, more and more companies are sinking into insolvency
with executives at their helm who need a crash course in
bankruptcy realities.  This excellent book will quickly get both
the seasoned executive and the uninitiated lawyer up to speed on
the bankruptcy process.

Salerno, Kroop and Hansen understand that the reorganization
process can be intimidating, puzzling, and generally unpleasant.
They penetrate the opaque gloom that some lawyers tend to
perpetuate.  Each chapter of this book addresses a different
aspect of the reorganization process, beginning with an overview
of the origins and purpose of US bankruptcy laws and ending with a
debunking of common myths about reorganization.  In between, they
discuss each chapter of the bankruptcy code; discussing the gamut
from liquidations through Chapter 11 sales and full-blown
reorganizations.  The authors' ability to distill the bankruptcy
code's complex language into comprehensible and manageable blocks
of information makes the book extremely readable.

The Executive Guide is full of pragmatic advice.  After laying out
the essential elements and key players in the restructuring
process, the authors get down to the nitty gritty of navigating a
distressed company through reorganization.  They realistically
assess the challenges that an executive should expect to face in
Chapter 11.  They discuss how to assuage and balance the concerns
of employees and key vendors, address the inevitable creditor
dissatisfaction with executive compensation, deal with members of
their professional team and work effectively as an executive whose
actions will be constantly scrutinized and second-guessed.  The
authors also provide the cautionary note that "executives
preparing to embark on a reorganization are usually too
preoccupied with business emergencies to think about the personal
toll that the process will exact."

One common flaw in books that try to be accessible while dealing
with technical topics is that they fall short in providing the
reader with a substantive understanding of the subject matter.
The Executive Guide to Corporate Bankruptcy avoids this pitfall.
The book's fourth and fifth chapters provide in-depth analysis of
the strategic decisions and steps that should be taken during the
restructuring process.  The authors explain the importance that
venue can have a case, the intricacies of first day motions and
how to prepare for confirmation.  There is a detailed discussion
of the sale of assets during the course of a Chapter 11
restructuring and the importance of making sure that major
constituencies are a part of the decision-making process.  They
also walk the reader through the specifics of a plan of a
reorganization, explaining the dynamics of the negotiation
process, especially how to understand and appreciate the needs of
your constituents and how to get a plan confirmed.

The icing on the cake for this book is the excellent appendix.
The final section of the book includes a user-friendly glossary of
commonly used bankruptcy terms and a reorganization timeline.  It
also includes sample documents such as debtor-in-possession (DIP)
financing agreements, operating reports, first day motions and
orders, management severance agreements, and more.  The summary of
management incentive stock plans implemented in recent
restructuring transactions is particularly informative.

This is a terrific book.  While geared to the non-lawyer
executive, it will also be a useful resource for any lawyer who
wants to gain practical familiarity with the bankruptcy process.
This should be a best seller in today's environment, though it may
need to be delivered to most executives in a brown paper wrapper.


                            *********

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.  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,
contact Christopher Beard at 240/629-3300.


                 * * * End of Transmission * * *