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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, July 28, 2010, Vol. 11, No. 147

                            Headlines



D E N M A R K

* DENMARK: More Banks Will Fail Due to Crisis, Finn Oestrup Says


F R A N C E

SILENUS LTD: S&P Downgrades Rating on Class F Notes to 'B+'


G E R M A N Y

ARCANDOR AG: No Agreement Yet on Karstadt Loan Conditions


G R E E C E

AGRICULTURAL BANK: Fails Stress Test; Mulls Capital Increase


H U N G A R Y

MAV ZRT: Moody's Changes Outlook on 'Ba2' Rating to Negative


I R E L A N D

ANGLO IRISH: Wants Trustee Appointed in Ex-Chief's Bankruptcy Case
CMD BOOKSOURCE: To Cease Trading on September 30
DANUCCI LTD: Acquired by Helsinki Capital Out of Liquidation
MAYBOURNE HOTEL: Expects to Complete Debt Refinancing Within Weeks
ZURICH BANK: Moody's Affirms 'D-' Bank Financial Strength Rating


I T A L Y

GRUPPO EDITORIALE: S&P Gives Stable Outlook; Affirms 'BB' Rating


K A Z A K H S T A N

ATF BANK: Moody's Downgrades Senior Unsec. Debt Ratings to 'Ba2'
TRISTAN OIL: Moody's Cuts Probability of Default Rating to 'D'


N E T H E R L A N D S

AEGON NV: Fitch Keeps BB-Rated Perpetual Capital Securities on RWN
NXP BV: Puts Price Range on Planned US$620 Million IPO


N O R W A Y

* NORWAY: Company Bankruptcies Reach 1,092 in Second Qtr. 2010


R O M A N I A

BANCA TRANSILVANIA: Fitch Affirms Issuer Default Rating at 'BB-'


R U S S I A

VICTORIA OJSC: Fitch Affirms Issuer Default Rating at 'B-'


S P A I N

CAJASUR: Fails Stress Test; Has Too Little Capital
MBS BANCAJA: Moody's Assigns Caa2 Rating on EUR402.5 Mil. Notes


U N I T E D   K I N G D O M

BRITISH AIRWAYS: Unite Mulls Legal Action Over Travel Concessions
CONNAUGHT PLC: FSA Launches Probe Amid Funding Talks
EQUITABLE LIFE: U.K. Gov't to Begin Compensation Payouts in 2011
GUINEAS CENTRE: Enters Administration Proceedings
MONTGOMERY ENTERPRISES: Ordered Into Liquidation Following Probe

PREFERRED RESIDENTIAL: Fitch Lifts Rating on Class FTc Notes to CC
PROFFITTS OF GREAT LEVER: Reduced Trade Prompts Administration
ROAR BETTING: Nine Betting Shops Sold by Administrators
SOUTHERN PACIFIC: Fitch Affirms 'C' Ratings on Class FTc Notes
SOUTHERN PACIFIC: Fitch Affirms 'CCC' Rating on Class E Notes

VISTEON UK: Ford May Face Legal Action Over Pensions

* UK: Launches Consultation on Restructuring Moratorium Proposals




                         *********



=============
D E N M A R K
=============


* DENMARK: More Banks Will Fail Due to Crisis, Finn Oestrup Says
----------------------------------------------------------------
Gelu Sulugiuc at Bloomberg News reports that Finn Oestrup, a
professor at Copenhagen Business School, on July 22 said that more
Danish banks will fail before the financial crisis is over,
leading to acquisitions among the country's some 200 banks and
mortgage lenders.

"There will be consolidation in Denmark," Mr. Oestrup, the
economist who correctly predicted the timing of Denmark's
housing market slump, told Bloomberg in an interview in
Copenhagen.  "We will see more banks that will fail due to the
crisis.  A heavier burden arising from regulation will also make
it harder for smaller banks to survive."

Bloomberg recalls Nils Bernstein, governor of Denmark's central
bank, said on May 11 that write-downs at the country's large
lenders would remain "high" this year and "a few" of the country's
some 200 banks would have difficulties meeting solvency
requirements.

Denmark's banks wrote down a record US$10 billion of bad
loans last year, more than double the amount the year before,
Bloomberg says, citing May 5 calculations by the Financial
Supervisory Authority.

The government has bailed out eight banks since the financial
crisis started, Bloomberg notes.


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F R A N C E
===========


SILENUS LTD: S&P Downgrades Rating on Class F Notes to 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Silenus (European Loan Conduit No. 25) Ltd.'s class A, B, C, D, E,
F, and X notes, and affirmed its rating on the class G notes.  At
the same time, S&P removed classes D, E, F, and G from CreditWatch
negative.

On May 29, 2009, S&P placed classes D to G on CreditWatch negative
as part of S&P's review of European commercial mortgage-backed
securities transactions.

Silenus (ELOC No. 25) is a true sale CMBS transaction, which
closed in March 2007.  The transaction is backed by 15 loans
secured on properties in France, Germany, and Italy.  The
outstanding principal balance of the transaction is
EUR1,087 million.

Morgan Stanley Bank International originated all of the loans
between May 2006 and January 2007 -- except for the Michelangelo
loan, which was part of European Loan Conduit No. 20 -- and they
are secured on 216, mostly commercial properties located
throughout Germany, France, and Italy.

S&P has generally revised downward its view of the values of the
properties backing the loans.  Factors affecting this change
included a revaluation (upward and downward) of the properties,
and Electricit‚ de France S.A. not renewing some of its leases in
the Margaux EDF loan.  Although S&P does not expect most of the
loans in the pool to incur losses, S&P believes some may have
difficulty in refinancing given their size and the underlying
collateral.

The loan balances of the 10 largest loans range from
EUR38.0 million to EUR191.9 million and they now account for 87%
of the transaction by loan balance.  The reported loan-to-value
ratios for these loans are between 34.57% and 84.30%, with an
average of 67.40%, according to the most recent servicer report
for the quarter ending May 17, 2010.  The lowest debt service
coverage ratio among these 10 borrower groups is 1.06x, while the
highest is 13.97x.  Although some of these loans have partially
repaid and show improved LTV ratios, S&P notes that some loans in
this group have performed below S&P's rating expectations.

The Margaux EDF loan, the largest loan in the pool at about 17% of
the pool balance, is backed by a portfolio of generally purpose-
built properties leased to EDF, an 'A+' rated French power
company.  S&P understand that EDF intends to vacate six of the 29
properties (one property is already vacant) and that the borrower
plans to refurbish or dispose some of these properties as soon as
EDF vacates or re-leases them.  Given the current average age of
this portfolio (25+ years), the six-year leases that EDF is
negotiating, the assets in the disposal plan, assumptions about
EDF re-leasing assets once these new leases expire, and the
location of these assets, S&P has revised its view on recoverable
proceeds of the portfolio significantly downward.

This downward revision notwithstanding, and depending on
assumptions on how much of the portfolio could be re-let to EDF in
six years and the success rate of the disposal plan in the current
market, the borrower may in S&P's opinion significantly amortize
the loan in the near future, or generate enough cash following
loan maturity (and before note maturity) to avoid principal
losses.

S&P also adjusted downwards its recovery expectations in the
Orazio loan.  This loan is backed by a portfolio of properties in
Naples, Rome, and Milan, as well as 41 retail assets in secondary
northern Italian cities.  Overall, the portfolio has a strong
tenant base, and there are no vacancies.  However, the sponsor's
business plan calls for a sale of the assets to pay back the loan,
with LTV ratio targets reducing each year.  The borrower hasn't
sold any assets to date, and the LTV ratio breach in recent
quarters was cured by way of equity injection, surplus cash, and
the use of reserve account funds.  Given that the sponsor bought
these assets at capitalization rates ranging from 3.36% to 4.60%,
S&P is of the opinion that the sponsor may incur losses upon sale
of assets to reach LTV ratio targets and to refinance at maturity.

The loan backed by the Berlin Residential portfolio has seen a
deterioration in vacancy rates, although net operating income has
not decreased by the same magnitude.  In S&P's view, the location
of the assets in Berlin is above average; however, considering the
initial market value of this portfolio and current market
conditions in Berlin, S&P believes the borrower could encounter
difficulties in a refinancing scenario.

The rating actions follow a full transaction review and reflect
S&P's view of the creditworthiness of the underlying loan
portfolio.  This is mainly due to the following factors:

* S&P's reassessment of the recoverable proceeds of several assets
  which collateralize their respective loans; and

* The long tenor of the underlying loans, which minimize default
  risk in the short term.

                           Ratings List

      Rating Affirmed and Removed From CreditWatch Negative

                                Rating
                                ------
           Class       To                    From
           -----       --                    ----
           G           B                     B/Watch Neg

                          Ratings Lowered

                                   Rating
                                   ------
              Class       To                    From
              -----       --                    ----
              A           AA                    AAA
              X           AA                    AAA
              B           A+                    AA
              C           BBB+                  A

       Ratings Lowered and Removed From CreditWatch Negative

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


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


ARCANDOR AG: No Agreement Yet on Karstadt Loan Conditions
---------------------------------------------------------
Holger Elfes at Bloomberg News reports that Valovis Bank AG, a
creditor to the landlords of Karstadt, hasn't reached agreement
yet on loan conditions with Nicolas Berggruen, the potential buyer
of Arcandor AG's German department store chain.

"Valovis hasn't received any concessions yet from Berggruen,"
Bloomberg quoted Nadine Buetow, spokeswoman for the Essen,
Germany-based lender, as saying.  Bloomberg notes Ms. Buetow said
that she couldn't confirm a report by news agency Reuters, which
said that the bank and Mr. Berggruen reached an agreement.

Bloomberg recalls Valovis said previously that it wants an early
repayment of a loan worth EUR850 million (US$1.1 billion) from
Karstadt's main landlord, the Goldman Sachs-controlled Highstreet
partnership, as lower rents would cause liability and legal risks
under Mr. Berggruen's demands.

                        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.


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G R E E C E
===========


AGRICULTURAL BANK: Fails Stress Test; Mulls Capital Increase
------------------------------------------------------------
Alkman Granitsas and Nick Skrekas at Dow Jones Newswires report
that the Agricultural Bank of Greece (ATEBank) said Friday that it
failed a stress-test conducted by European regulators of the
European Union's banking sector.

Dow Jones relates ATEBank said that under the worst-case scenario
the bank's Tier 1 capital ratio would fall to 4.36% -- well below
the 6% threshold set by regulators -- and that it would need to
raise EUR242.6 million in new capital, promising to seek fresh
cash from investors.

"The results of the stress test suggest a shortfall of EUR242.6
million of the Tier 1 capital against the threshold of 6%," Dow
Jones quoted the bank as saying.  "ATEbank having reinforced its
balance sheet with the necessary provisions that it took in the
2009 financial year, and in coordination with its basic
shareholder, will proceed to a capital raising."

Dow Jones notes although many analysts had expected ATEBank to
fail the test -- the bank had previously warned that it needed
fresh capital -- the results put new pressure on the government to
either recapitalize or privatize the troubled state-lender.

According to Dow Jones, in a statement, Greece's finance minister
gave ATEBank two months to put forward a plan to shore up its
capital but said the government "foresees to participate in a
capital share increase."

The Agricultural Bank of Greece is a commercial bank based in
Athens, Greece.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on July 20,
2010, Fitch Ratings downgraded the Agricultural Bank of Greece's
Individual Rating to 'D/E' from 'C/D'.  It placed the rating on
Watch Evolving.


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H U N G A R Y
=============


MAV ZRT: Moody's Changes Outlook on 'Ba2' Rating to Negative
------------------------------------------------------------
Moody's Investors Service has changed to negative the outlook on
the Ba2 Corporate Family Rating and Probability of Default Rating
of MAV Zrt Hungarian State Railways.

The rating action follows Moody's decision on July 23, 2010, to
place the Baa1 local and foreign currency ratings of the Republic
of Hungary on review for possible downgrade.

The negative outlook on MAV's ratings reflects Moody's view that
the government might be more constrained in its level of support
going forward at time when MAV's liquidity remains under pressure
due to the sizeable debt repayments due in 2011 (as outlined in
Moody's last press release on MAV dated June 28, 2010).  The
outlook could be stabilized if the pressure on the sovereign
rating is removed (i.e. upon the confirmation of the existing Baa1
rating) and the concerns on the company's liquidity profile and
refinancing risk subside.  Although a multi-notch downgrade on the
government ratings is unlikely, in such event there might be
immediate pressure on MAV's rating as well.

The Ba2 rating of MAV reflects the combination of these inputs:

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

  -- Hungary's sovereign rating of Baa1, which is currently under
     review for possible downgrade

  -- Very high dependence

  -- High support

Moody's assessment of very high dependence recognizes (i) the
strong operational and financial linkages between MAV and the
Hungarian Government with direct and indirect government transfers
representing more than 50% of MAV's revenues, (ii) the fact that
both the company and its sole shareholder rely on Hungary as
revenue base and (iii) the exposure of MAV and the government to
common risks such as exchange rate volatility.

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

The BCA of 17 positively reflects: (i) the company's low business
risk profile, based on both its monopoly position as the Hungarian
railways' infrastructure manager and its "quasi-monopoly" position
in railway passenger transportation in Hungary; (ii) the
relatively stable stream of revenues derived by MAV from state
cost reimbursements; (iii) the importance of railways as a means
of transportation to the Hungarian economy; and (iv) the high
degree of control and monitoring of MAV by the Hungarian
government.

MAV's BCA of 17 is lower than the indication provided by Moody's
Global Passenger Railway Companies Rating Methodology (published
in December 2008) at Ba2 on the basis of FY2009 financial data, as
adjusted by Moody's.  A BCA of 17 reflects these constraints: (i)
MAV's weak stand-alone credit quality derived from its record of
material operating losses; (ii) the likely continued deterioration
in MAV 's financial position based on further significant capital
expenditure commitments (although Moody's understands that capex
is implemented only when the company is able to fund it) and
higher future maintenance costs for an ageing fleet (although
Moody's recognizes that the company has started to renew its
fleet); (iii) MAV's heavy debt repayment schedule, starting in
2011, and the group's weakening liquidity position as a result of
this; and (iv) a change in the stability of the operating
environment due to the financial crisis.

The last rating action on MAV was implemented on June 28, 2010,
when Moody's downgraded the group's CFR to Ba2 with a stable
outlook from Ba1.

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


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I R E L A N D
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ANGLO IRISH: Wants Trustee Appointed in Ex-Chief's Bankruptcy Case
------------------------------------------------------------------
Carl O'Brien at The Irish Times reports that former Anglo Irish
Bank chief Sean FitzPatrick on Monday appeared in the High Court
for the first time since he was declared bankrupt earlier this
month.

The report relates Mr. FitzPatrick, who owes creditors a total of
EUR150 million and has assets of around EUR50 million, was in
court as bankruptcy proceedings continued against him.

According to the report, legal representatives for Anglo Irish
Bank, which says it is owed up to EUR110 million, told the court
it was seeking to have a "trustee in bankruptcy" appointed to the
case.  The report says this trustee would replace a court-
appointed official, Chris Lehane, who was assigned a fortnight ago
to deal with Mr. FitzPatrick's assets and debts.

Ms. Justice Elizabeth Dunne adjourned the case for hearing until
September 22, the report discloses.

Apart from Anglo, his creditors include investment firm Friends
First, Bank of Scotland (Ireland), Ulster Bank and sister bank
First Active, Haven Mortgages, AIB and the Revenue Commissioners,
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'.


CMD BOOKSOURCE: To Cease Trading on September 30
------------------------------------------------
Caroline Madden at The Irish Times reports that CMD BookSource
will cease trading on September 30.

The report relates BookSource, the Glasgow-based parent of CMD
BookSource, has said its Irish venture is "no longer sustainable"
because of the very difficult trading conditions.

Three employees in its Dublin warehouse will lose their jobs as a
result of the closure, the report says.  The closure will have no
impact on its parent operation in Scotland as CMD BookSource was
set up as a separate company, the report notes.

CMD BookSource distributes books for more than 20 Irish
publishers, according to the Irish Times.


DANUCCI LTD: Acquired by Helsinki Capital Out of Liquidation
------------------------------------------------------------
Laura Slattery at The Irish Times reports that Danucci Limited has
been acquired by Brisbane-based private investment firm Helsinki
Capital Corporation.

The report recalls Danucci, which was founded by Mark and Michelle
Lowth in 2005, was wound up in September after it was unable to
secure additional investment during a period in examinership.  The
company, which employed 10 people, had run up a deficit of about
EUR500,000 resulting from the collapse of its UK distribution
company and other factors, the report recounts.  The report
relates Noel Kerr, one of HCC's directors, bought the company
through HCC shortly after it went into liquidation.  To date, the
private equity company has invested EUR1.5 million in the
business, with further investment committed for later this year,
the report discloses.

The new operating entity will be called Ferdia Fine Foods and will
be based in Ardee, Co Louth, the report notes.

Danucci Limited is a Louth-based company that supplied gourmet
chocolates to Harrods and John Lewis in the UK as well as a number
of Irish speciality stores, according to The Irish Times.


MAYBOURNE HOTEL: Expects to Complete Debt Refinancing Within Weeks
------------------------------------------------------------------
Gavin Daly at The Sunday Business Post Online reports that the
Irish owners of the Maybourne Hotel Group in London expect to
complete the refinancing of its EUR700 million debt within weeks.

The report says Deutsche Bank and Barclays Bank have been linked
to the deal, which would take the debt out of Anglo Irish Bank and
Bank of Ireland.  It is understood that the Irish banks, which
funded the hotel buyout in 2004, will be repaid in full, the
report notes.

The backers of hotel group include Paddy McKillen, Derek Quinlan
and Riverdance creators John McColgan and Moya Doherty, the report
discloses.

According to the report, the Maybourne debt has to be refinanced
by December this year, but Messrs. McKillen and Quinlan started
the process a number of months ago in a bid to keep it out of the
National Asset Management Agency.

The report relates one source said that the refinancing was
oversubscribed and due diligence was under way with new lenders.
It is understood that a deal could be completed within two to
three weeks, although it could run beyond that, the report states.
It is not clear on what terms the hotel group is securing the
funds, or whether the shareholdings in the group will change, the
report notes.

The Maybourne Hotel Group owns Claridges, the Connaught and the
Berkeley.


ZURICH BANK: Moody's Affirms 'D-' Bank Financial Strength Rating
----------------------------------------------------------------
Moody's Investors Service has affirmed Zurich Bank's D- bank
financial strength rating (the D- maps to Ba3 on the long-term
scale) as well as the A1/Prime-1 long- and short-term bank deposit
ratings and the backed-A2 senior unsecured debt program rating.
The outlook on the D- BFSR remains negative and the outlook on the
other ratings is stable.

The affirmation is a result of the recapitalization of the bank by
its parent, Zurich Financial Services Group, following the high
level of provisions taken by the bank in the first half of 2010.
In July 2010 the Zurich Group announced that as a result of a
review of the bank's property development lending books, the bank
would take a provision of US$330 million (approximately
GBP216 million), and that as a result of the provision charge the
Zurich Group has recapitalized the bank.  In June and July 2010
the Zurich Group injected GBP150 million of equity and
GBP30 million of upper tier 2 capital.  Following this capital
injection into the bank and the substantially higher provisions
now taken, Moody's believes that further losses that the bank may
have to take on its loan portfolios will likely be able to be
absorbed by pre-provision profits and the current capital base.

Although this process has improved the bank's absorption capacity
Moody's does however consider that there are still risks to the
bank's financial fundamentals due to the still very challenging
commercial property markets in both the UK and Ireland.  The D-
BFSR reflects this risk, as well as incorporating the fact that
the bank has stopped lending in both the UK and Ireland and will
run-down these portfolios over the medium-term.  As a result of
this the future strategy and franchise of the bank is uncertain.

The affirmation of the bank's A1/Prime-1 long- and short-term bank
deposit ratings and the backed-A2 senior unsecured debt program
rating reflects the high level of explicit support from the Zurich
Group.  Zurich Bank's A1/P-1 deposit ratings are underpinned by a
surety bond issued by Zurich Insurance Company (ZIC - A1 insurance
financial strength rating).  As the surety bond qualifies as an
insurance policy the beneficiary (Zurich Bank) ranks pari passu
with ZIC's other policy holders.  The backed-A2 senior unsecured
MTN program rating reflects that the bank is an issuer under the
Zurich Group's MTN program and any issuance is guaranteed by ZIC
(senior debt rating -- A2/stable).  The outlook on these ratings
is stable in line with the outlook on ZIC.

The last rating action on Zurich Bank was on April 8, 2009, when
the BFSR was downgraded to D-, negative outlook, from D.

Zurich Bank is headquartered in Dublin, Ireland and had total
assets of GBP2.66 billion at end-2009.


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I T A L Y
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GRUPPO EDITORIALE: S&P Gives Stable Outlook; Affirms 'BB' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Italy-based newspaper and magazine publisher Gruppo
Editoriale L'Espresso SpA to stable from negative.  At the same
time, the 'BB' long-term corporate credit and senior unsecured
debt ratings on Gruppo Espresso were affirmed.

The recovery rating on Gruppo Espresso's senior unsecured debt is
unchanged at '4', indicating S&P's expectation of average (30%-
50%) recovery in the event of a payment default.

"The outlook revision reflects S&P's view of the significant
improvement in Gruppo Espresso's operating performance over the
past two quarters," said Standard & Poor's credit analyst Patrizia
D'Amico.  "This performance should, in S&P's opinion, result in
profitability and credit measures commensurate with the current
ratings by year-end 2010.  In particular, S&P believes that the
group's adjusted net debt to EBITDA is likely to fall comfortably
below 4.0x at year-end 2010, compared with 4.9x at the end of
2009."

An improvement in the Italian advertising market, coupled with
continued cost savings, resulted in a near doubling of Gruppo
Espresso's EBITDA margin to 16.8% in the first half of 2010, from
8.9% at year-end 2009.  S&P believes improvements in the Italian
advertising market and in operating performance at the group may
enable Gruppo Espresso's reported EBITDA margin to reach or exceed
15% at year-end 2010.

The ratings on Gruppo Espresso reflect S&P's view of its relative
concentration of earnings from a single business franchise ("la
Repubblica"), although this covers a range of products, and the
fact that the group competes for advertising revenues with Italy's
highly concentrated TV broadcasting industry.  An additional
constraint on the ratings is that the company is 53.9% owned by
holding company CIR-Compagnie Industriali Riunite SpA (CIR;
BB/Negative/B).

In S&P's view, under the scenario of an improving Italian
advertising market and additional cost savings in 2010, Gruppo
Espresso is likely to reach and maintain credit ratios and
profitability levels in line with the current ratings starting
from year-end 2010.

Ratings stability would depend, all other things being equal, on
Gruppo Espresso posting and maintaining, on a sustainable basis,
adjusted debt to EBITDA of less than 3.5x and FOCF to debt of
about 10% in the medium term.  The outlook also incorporates S&P's
anticipation that future dividend payments should not result in
significant negative discretionary cash flow generation and that
liquidity should remain adequate over the next few years.


===================
K A Z A K H S T A N
===================


ATF BANK: Moody's Downgrades Senior Unsec. Debt Ratings to 'Ba2'
----------------------------------------------------------------
Moody's Investors Service has downgraded ATF Bank's local and
foreign-currency deposit and senior unsecured debt ratings to Ba2
from Ba1.  The bank's E+ bank financial strength rating has been
affirmed, which now translates to a Baseline Credit Assessment of
B3.  ATF Bank's B1 foreign-currency junior subordinated debt
rating has also been affirmed.  At the same time, Moody's changed
the outlook on all of the bank's ratings to stable from negative.

The downgrade of ATF Bank's deposits and senior unsecured debt
ratings is in response to the weakening of its credit profile over
the last year.  This is reflected by these trends in its audited
IFRS financial statements: (i) a significant deterioration of its
loan portfolio (impaired loans rose to 30.9% of gross loans at
year-end 2009, from 17.5% at year-end 2008); (ii) poor financial
results, with net losses of KZT54.77 billion (US$369 million) at
year-end 2009, driven by increased loan-loss provisions and
weakened earnings; and (iii) weak capitalization, with an equity-
to-assets ratio of 5.7% at year-end 2009, compared with 9.4% at
year-end 2008.

The change of the outlook to stable from negative factors in the
moderate easing of the pressure on the bank's capitalization
following an agreement between ATF Bank and its parent bank
Unicredit Bank Austria AG.  Under this agreement, Unicredit
guarantees over 40% of ATF Bank's loan portfolio (US$2.8 billion)
starting from December 31, 2009, according to the information
provided by the bank and verified in its IFRS financial
statements.  The stable outlook also acknowledges the bank's
improved position in Kazakhstan's banking system's deposits, with
a market share of 10.5% at the end of May 2010 (according to the
bank's regulatory reports).

ATF Bank's audited IFRS financial statements show that it remains
highly reliant on market funding, which accounted for almost half
of its total liabilities at year-end 2009.  About a third of these
market funds are due to Unicredit, which partly mitigates the
refinancing risk.  Nevertheless, ATF Bank still has to repay a
substantial amount of non-parental debt, of which approximately
US$600 million is due over the next one year (until Q3 2011).

According to Moody's, ATF Bank's E+ BFSR is underpinned by the
bank's significant market share and its improving risk management
from the integration into the UniCredit Group.  However, the
rating also accounts for the bank's weak asset quality,
profitability and capitalization, as well as its high borrower
concentration and material reliance on wholesale funding.

The bank's Ba2 deposit and senior unsecured debt ratings are based
on its B3 BCA, Moody's assessment of a high probability of support
from UniCredit SpA (rated C/Aa3), combined with a low probability
of systemic support due to ATF's position as the fifth-largest
bank in Kazakhstan, accounting for 9.2% of the banking sector's
total assets at end-May 2010, according to the bank's regulatory
reports.  These support assessments result in a four-notch uplift
from ATF's B3 BCA.

Moody's notes that ATF Bank's ratings currently have limited
upside potential due to ongoing pressure on the bank's financial
fundamentals.  However, in the medium term, the deposit and debt
ratings may benefit from increased earnings and lower loan-loss
provisions, which will translate into increases in net income and
capital.

Conversely, a further material weakening of ATF Bank's earnings
generation will probably erode its capital and franchise.  This
could lead to a downgrade of its BFSR, and its deposit and debt
ratings.  Higher than currently anticipated credit losses and
significantly deteriorating liquidity will also result in a
downgrade of the ratings.  In addition, any reduction in the
likelihood of parental or systemic support (which is already low)
may result in a downgrade of ATF Bank's deposit and debt ratings.

Moody's previous rating action on ATF Bank was implemented on
January 29, 2010, when ATF Bank's junior subordinated debt rating
was downgraded to B1 from Ba3.

Headquartered in Almaty, Kazakhstan, ATF Bank reported total
assets, shareholders equity and net losses of US$7.09 billion,
US$405 million and US$369 million), respectively, at year-end
2009, according to its audited IFRS financial statements.


TRISTAN OIL: Moody's Cuts Probability of Default Rating to 'D'
--------------------------------------------------------------
Moody's Investors Service has downgraded the probability-of-
default rating of Tristan Oil Ltd to D from C and changed to
negative from stable the outlook on the ratings of the company's
US$300 million and US$120 million senior secured notes maturing in
2012.

The rating action follows the cancellation of Tristan's key
subsoil use contracts by the Kazakhstani authorities, which will
prevent the company from operating as a going concern.  This
development also constitutes a change of control event and is
likely to trigger a default under the Bond documentation.  The PDR
has been downgraded to D to reflect the anticipated default on the
Bond.

In its previous rating actions Moody's anticipated negative
developments on the credit which has resulted in the corporate
family rating being downgraded to C -- the lowest rating category
prior to default.  The change in the outlook to negative also
reflects Moody's view that the notes are moving towards default.

Moody's last rating action on Tristan was implemented on
December 29, 2009, when the rating agency downgraded the company's
corporate family rating to C/Stable from Caa3/Negative.

Tristan is a special purpose vehicle domiciled in the British
Virgin Islands created for the sole purpose of issuing secured
notes to finance a loan to two oil and gas companies, KPM and TNG,
organized under the laws of Kazakhstan.  The guarantors of the
notes, KPM and TNG, have been engaged in the exploration and
development of two oil and gas fields and in the production of
oil, condensate and gas in the Pre-Caspian basin of Western
Kazakhstan.  All companies are directly or indirectly owned by Mr.
Stati, a Moldovan citizen, and certain members of his family.


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


AEGON NV: Fitch Keeps BB-Rated Perpetual Capital Securities on RWN
------------------------------------------------------------------
Fitch Ratings has downgraded AEGON N.V.'s Long-term Issuer Default
Rating to 'A' from 'A+', and senior unsecured debt to 'A-' from
'A'.

Fitch has also downgraded the Insurer Financial Strength ratings
of AEGON's primary North American life insurance subsidiaries to
'AA-' from 'AA'.  The Outlooks for AEGON's Long-term IDR and the
IFS ratings of its primary North American life insurance
subsidiaries are Stable.  The company's banking subsidiary, AEGON
Bank N.V., has also been downgraded.  A full rating breakdown is
provided at the end of this comment.

The downgrades reflect Fitch's concerns regarding the cumulative
impact of adverse financial markets on AEGON's capital position
and earnings profile.  AEGON has experienced higher-than-expected
capital and earnings volatility over the economic cycle and
relative to major peers in the 'AA' IFS rating category.  This
volatility has been largely due to credit-related investment
losses and exposure linked to guaranteed benefits on AEGON's US
variable annuity business.  While the capital position has
strengthened and become less volatile as a result of AEGON's
increased hedging and derisking, the company's gross financial
leverage has increased following the issuance of EUR1 billion,
US$500 million and GBP400 million in senior debt in 2009.  AEGON
continues to hold significant cash balances at the level of the
holding company and net financial leverage remains within the
company's targets.

While AEGON's earnings have improved in recent quarters, Fitch
believes that the company's run-rate earnings will be below
historical levels and prior rating expectations due to the
intensifying competitive pressure in AEGON's key markets of the
US, the Netherlands, and the UK where the group recently announced
plans to scale back its operations.

AEGON's ratings continue to reflect its strong capitalization,
diversification of both products and distribution particularly in
US retail markets, a measured risk appetite and a focus on cost
control.

The Stable Outlook reflects expectations that operating earnings
and capitalization will continue to slowly recover from the lows
experienced during the global financial crisis.  While credit-
related losses for 2010 are expected to be significant again
mainly due to AEGON's exposure in the US to certain residential
mortgage-backed securities and commercial mortgage-related
investments, Fitch believes that its capital position and
operating earnings profile will be adequate to maintain the
current ratings.

Fitch is maintaining the Rating Watch Negative on AEGON's
perpetual capital securities to reflect the risk of coupon
deferral under the concept of "burden sharing" for state-aided
financial institutions such as AEGON.  AEGON received EUR3 billion
of support from the Dutch government in 2008 and is awaiting the
conclusions of the European Commission on its "viability plan"
which was submitted in line with the European Union's state aid
rules.  A resolution of the RWN will depend on these conclusions,
which are expected later this year.

AEGON Bank N.V.'s IDRs and Support Rating continue to be based on
potential support from its 100% shareholder, AEGON.

The rating actions are:

AEGON N.V.

  -- Long-term IDR: downgraded to 'A' from 'A+'; Outlook Stable

  -- Senior unsecured debt: downgraded to 'A-' from 'A'

  -- Short-term IDR and commercial paper programme: affirmed at
     'F1'

These AEGON N.V. perpetual capital securities, rated 'BB', are
maintained on RWN:

  -- US$500m 6.5%, callable 12/2010 (NL0000062420)
  -- US$250m floating rate, callable 12/2010 (NL0000062438)
  -- NLG450m 7.125%, callable 03/2011 (NL0000120889)
  -- EUR200m 6%, callable 07/2011 (NL0000168466)
  -- US$550m 6.875%, callable 09/2011 (NL0000686368)
  -- US$1,050m 7.25%, callable 12/2012 (NL0006056814)
  -- EUR950m floating rate, callable 07/2014 (NL0000116150)
  -- US$500m floating rate, callable 07/2014 (NL0000116168)
  -- NLG250m 4.156%, callable 06/2015 (NL0000120004)
  -- US$1,000m 6.375%, callable 06/2015 (NL0000021541)
  -- NLG300m 5.185%, callable 10/2018 (NL0000121416)

These AEGON North American life insurance subsidiary companies'
Long-term IFS ratings have been downgraded to 'AA-' from 'AA'.

All the companies have Stable Outlooks:

  -- Transamerica Advisors Life Insurance Company
  -- Transamerica Advisors Life Insurance Company of New York
  -- Monumental Life Insurance Company
  -- Stonebridge Life Insurance Company
  -- Transamerica Financial Life Insurance Company
  -- Transamerica Life Canada
  -- Transamerica Life Insurance Company
  -- Transamerica Life International (Bermuda) Ltd.
  -- Western Reserve Life Assurance Co. of Ohio

These AEGON subsidiary companies' Short-term IDR and Short-term
IFS ratings have been affirmed at 'F1+':

  -- Monumental Life Insurance Company
  -- Transamerica Financial Life Insurance Company
  -- Transamerica Life Insurance Company

These AEGON subsidiary companies' secured notes programme and
outstanding issues have been downgraded to 'AA-' from 'AA':

  -- Monumental Global Funding III
  -- Monumental Global Funding II
  -- Monumental Global Funding Ltd.

Transamerica Corp.:

  -- Long-term IDR downgraded to 'A' from 'A+'; Outlook Stable

Transamerica Capital II, Transmerica Capital III:

  -- Perpetual capital securities: 'BB'; maintained on RWN

AEGON Funding Company LLC:

  -- Commercial paper: affirmed at 'F1'
  -- Senior debt: downgraded to 'A-' from 'A'

These AEGON subsidiary companies' senior debt and medium term
notes have been downgraded to 'A-' from 'AA':

  -- Transamerica Finance Corp.
  -- Commonwealth General Corporation

AEGON Bank N.V.

  -- Long-term IDR: downgraded to 'A-' from 'A'; Outlook Stable
  -- Short-term IDR: downgraded to 'F2' from 'F1'
  -- Support Rating: affirmed at '1'
  -- Individual Rating of 'D' is unaffected


NXP BV: Puts Price Range on Planned US$620 Million IPO
------------------------------------------------------
Martin Arnold at The Financial Times reports that NXP put a price
range on its planned initial public offering to raise about US$620
million.

The FT relates NXP said in a filing with the Securities and
Exchange Commission on July 22 that it planned to sell 34m shares
for between US$18 and US$21 on the Nasdaq, giving it a market
capitalization of US$4.5 billion to US$5.2 billion.

Headquartered in Eindhoven, Netherlands, NXP B.V. --
http://www.nxp.com/-- creates semiconductors, system solutions
and software that deliver better sensory experiences in TVs,
set-top boxes, identification applications, mobile phones, cars
and a wide range of other electronic devices.  The company has
31,000 employees working in more than 20 countries and posted
sales of US$6.3 billion (including the Mobile & Personal
business) in 2007.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on July 23,
2010, Standard & Poor's Ratings Services said it affirmed its
'CCC+' long-term corporate credit and senior secured debt ratings
on Dutch semiconductor manufacturer NXP B.V.  S&P said the outlook
is positive.  S&P's '4' recovery rating on NXP's upsized senior
secured notes is unchanged, indicating S&P's expectation of
average (30%-50%) recovery for creditors in the event of a payment
default.  At the same time, S&P removed the senior secured debt
ratings from CreditWatch with negative implications, where they
had been placed on July 13, 2010.

S&P said the ratings on NXP continue to reflect its very high debt
leverage and large debt maturities in 2013 and 2014, which are
only partly offset by the company's positions in high-performance
and mixed signal semiconductors and an improving cost position.
On March 31, 2010, NXP reported gross consolidated debt of US$5.2
billion.  The ratings could come under negative pressure if NXP
fails to significantly cut its cash losses in line with S&P's
expectations, if S&P perceives an increased risk of a distressed
exchange offer, or if the company fails to timely address its debt
maturity profile.


===========
N O R W A Y
===========


* NORWAY: Company Bankruptcies Reach 1,092 in Second Qtr. 2010
--------------------------------------------------------------
Meera Bhatia at Bloomberg News, citing Finansavisen, reports that
the number of bankruptcies in Norwegian private limited companies,
or AS firms, increased for the fourth consecutive quarter.

According to Bloomberg, the Oslo-based newspaper said some 1,092
bankruptcies were reported in the second quarter.  Bloomberg notes
the newspaper said in comparison, about 1,300 companies filed for
bankruptcy during he first quarter of last year.


=============
R O M A N I A
=============


BANCA TRANSILVANIA: Fitch Affirms Issuer Default Rating at 'BB-'
----------------------------------------------------------------
Fitch Ratings has affirmed Romania-based Banca Transilvania S.A.'s
ratings at Long-term foreign currency Issuer Default 'BB-', Short-
term foreign currency IDR 'B', Individual 'D', Support '3' and
Support Rating Floor 'BB-'.  The Outlook is Stable.

The ratings reflect sharply deteriorated asset quality and its
negative impact on profitability.  This is balanced by BT's good
franchise, well-diversified funding structure and comfortable
liquidity.

Profitability was negatively affected in 2009 and Q110, after a
spike in loan impairment charges mainly due to the deteriorating
operating environment and was partly offset by improvements in
efficiency and the contribution from fee and commission income.
Fitch expects profitability to be under pressure in 2010 due to
economic recession while BT's large discretionary loan loss
reserves in 2009 would provide only some buffer for future credit
losses.

BT has a fairly well-diversified loan portfolio and relatively low
share of foreign-currency loans for the Romanian banking sector.
Fitch expects asset quality to further deteriorate in 2010, albeit
at a slower pace due to BT's planned increase in focus on lower-
risk large SMEs and a slower contraction of the economy.  BT is
mainly funded by well-diversified customer deposits and the
loans/deposits ratio (at 75%) is lower than the sector average of
119%.  It also has access to long-term funding from international
financial institutions.  Liquidity is comfortable due to stringent
regulatory requirements.  At end-Q110, the regulatory capital
ratio equaled 13.09%, which is considered by Fitch to be just
adequate.  Higher levels of capitalization would provide a more
comfortable buffer against potential risks in a difficult
operating environment.

BT is the largest domestically owned private bank in Romania and
was the eighth-largest by total banking assets with a 5.9% market
share at end-2009.  BT is listed on the Bucharest stock exchange
and ownership is widespread with the EBRD being the largest
shareholder with a 14.61% stake at end-2009.

In Fitch's rating criteria, a bank's standalone risk is reflected
in Fitch's Individual ratings and the prospect of external support
is reflected in Fitch's Support ratings.  Collectively these
ratings drive Fitch's Long- and Short-term IDRs.


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


VICTORIA OJSC: Fitch Affirms Issuer Default Rating at 'B-'
----------------------------------------------------------
Fitch Ratings has affirmed Russian-based food retailer OJSC
Victoria Group's Long-term foreign and local currency Issuer
Default ratings at 'B-' and its National Long-term rating at
'BB(rus)'.  Fitch has also affirmed LLC Victoria-Finance's
(Victoria Finance) local currency senior unsecured rating at 'B-',
which has a Recovery Rating of 'RR4', and its National Long-term
rating at 'BB(rus)'.  The Outlooks are Stable.  Fitch has
concurrently withdrawn its ratings on Victoria and Victoria
Finance.

Fitch will no longer provide ratings or analytical coverage of
Victoria.


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


CAJASUR: Fails Stress Test; Has Too Little Capital
--------------------------------------------------
Charles Penty at Bloomberg News reports that CajaSur failed a
stress test after regulators found the lender had too little
capital to withstand a sovereign debt crisis.

The group's tier 1 capital ratio, a measure of financial strength,
dropped to 4.3%, less than the 6% minimum required in the tests,
in a scenario examining adverse economic conditions and an
additional sovereign shock, Bloomberg says, citing results
published on the Web site of the savings bank association.

According to Bloomberg, the capital needed to reach a 6% ratio was
EUR208 million.

Bloomberg recalls the bank was seized by regulators in May for
being insolvent.

CajaSur is a savings bank previously run by Roman Catholic priests
in Cordoba.


MBS BANCAJA: Moody's Assigns Caa2 Rating on EUR402.5 Mil. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to these
classes of Notes to be issued by MBS Bancaja 7 FTA:

* Aaa to the EUR472,500,000 notes due 2063
* Caa2 to the EUR402,500,000 notes due 2063

The transaction represents the securitization of Spanish mortgage
loans originated by Bancaja.  The assets supporting the notes are
mortgage loans secured by residential properties located in Spain.
The portfolio will be serviced by Bancaja.

The expected portfolio loss of 16% and the MILAN Aaa credit
enhancement of 38% serve as input parameters for Moody's cash flow
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.  These high figures
relative to other recent Spanish transactions reflect the
relatively high weighted average loan-to-value of the portfolio
(86.3% of the pool is above 80% LTV) and most importantly, that
28% of the pool correspond to refinanced loans from previously
underperforming loans by the same originator (effectively these
are not prime borrowers).  Underperforming means that these
borrowers were previously delinquent or that they were flagged by
the originator's alert system due to their credit profile
deterioration and the originator took pre-emptive action by
refinancing.  34.8% of the loans, many within the refinanced sub-
pool, have principal grace periods that raise additional concern
on the affordability and potential future payment shock for these
borrowers.  For the refinanced loans, Moody's have assumed in the
MILAN analyis a 100% default rate and only given benefit for the
recovery, which has been calculated using the standard MILAN
stress.  These two characteristics of the pool, high LTV and non
prime borrowers, are different from previous Bancaja transactions.
Also, 24% of the pool was originated through brokers.

The V Score for this transaction is Medium/High, which is higher
than the V score assigned for the Spanish RMBS sector.  Four
subcomponents of the V Score have been assessed worse than the
average for the sector and worse also in comparison with other
recently issued High LTV Spanish RMBS.  Sector Historical
Downgrade Rate performance variability score is Medium/High, which
is higher than a score of Medium for the Spanish RMBS sector,
reflecting that High LTV deals in Spain have shown worse
performance than the market index.  The variability score for
Quality of Historical Data is Medium/High mainly because there is
no historical information in the market on the performance of
refinancings of delinquent loans.  Issuer/Sponsor/Originator's
historical variability score is Medium/High since previous RMBS
deals from this originator show worse performance than the market
index.  The score for Transaction Complexity is Medium/High
because high LTV deals are more exposed to house price declines,
thus increasing the volatility on actual losses and this pool
contains loans with adverse risk elements.  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 accordingly to the report "VScores and Parameter
Sensitivities in the Major EMEA RMBS Sectors" published in April
2009.

The definitive ratings address the expected loss posed to
investors by the legal final maturity.  The structure allows for
timely payment of interest and ultimate payment of principal at
par on or before the legal final 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 the yield to investors.


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


BRITISH AIRWAYS: Unite Mulls Legal Action Over Travel Concessions
-----------------------------------------------------------------
BBC News reports that the Unite union says it is planning legal
action against British Airways over the removal of travel
concessions from cabin crew who went on strike.

According to BBC, Unite, which represents 11,000 cabin crew at the
airline, said the management's action was a breach of European
Human rights legislation.  It also believes the concessions were
withdrawn without proper disciplinary procedures being followed,
BBC notes.

BBC relates the dispute began over changes to working practices,
but became more entrenched over so-called travel perks.  These
entitled staff to a certain amount of discounted travel, which
increased with service, BBC states.

In another move, Unite said it would provide additional assistance
to support crew members, who have suffered particular financial
hardship, BBC discloses.

BBC says union leaders are planning to meet BA executives next
week at the conciliation service Acas for further talks to resolve
the still unsolved dispute, which has cost the airline GBP150
million and disrupted 22 days of service.

                      About British Airways

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

                           *     *     *

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


CONNAUGHT PLC: FSA Launches Probe Amid Funding Talks
----------------------------------------------------
Philip Stafford at The Financial Times reports that a wide-ranging
probe has been launched by the Financial Services Authority into
Connaught, which on Monday suffered a 69% plunge in its share
price after a warning that it was in urgent need of additional
funding.

The FSA is pursuing several lines of inquiry, the FT says, citing
people familiar with the matter.  This included whether or not the
FTSE 250 company has failed to disclose potentially price-
sensitive information to the market in a timely manner, the FT
states.

According to the FT, the company's bankers -- a syndicate led by
the Royal Bank of Scotland -- are expected to decide within the
next few days whether or not to provide the cash injection that
Connaught, chaired by Sir Roy Gardner, has requested.  A debt-for-
equity swap is among the options that the lenders are considering,
the FT notes.

The FT says the FSA is also examining the sale of shares by a
company manager shortly before its profit warning.

Meanwhile, Deloitte, which is conducting an independent
examination of the company's accounts, is expected to deliver a
preliminary report to Sir Roy at the end of the week, the FT
discloses.

As reported by the Troubled Company Reporter-Europe on July 27,
2010, the FT said that Connaught warned it would breach its
banking covenants following a review revealing its year-end net
debt would be far higher than previously forecast.  The FT
disclosed Connaught is in talks with its bankers to secure
additional funds after forecasting that net debt would be
significantly in excess of GBP120 million by its year-end of
August 31.

Connaught plc -- http://www.connaught.plc.uk/-- is a United
Kingdom-based company engaged in the provision of integrated asset
services to the public and private sectors.  The Company operates
in two business segments: social housing and compliance.  Social
Housing segment provide social housing landlords throughout the
United Kingdom with a range of planned and response maintenance
services, as well as compliance and estate management.  The
Compliance segment provides safety, health and risk management
solutions.  It has information, advisory, training and servicing
capabilities to provide integrated compliance solution throughout
the United Kingdom.  On July 22, 2009, the Company completed the
acquisition of UK Fire (International) Limited and Igrox Limited.
On September 15, 2008, the Company completed the acquisition of
Lowe Group Holdings Ltd.  On November 26, 2008, the Company
completed the acquisition of certain assets of Predator Pest
Control Plc.


EQUITABLE LIFE: U.K. Gov't to Begin Compensation Payouts in 2011
----------------------------------------------------------------
Gonzalo Vina at Bloomberg News reports that Treasury Minister Mark
Hoban said the U.K. government will begin paying compensation to
Equitable Life Assurance Society policyholders by the middle of
2011.

Bloomberg relates Mr. Hoban, presenting legislation to allow
compensation to be paid, told lawmakers on July 22 in London that
he will consider a proposal made in Judge John Chadwick's
government-commissioned report to pay as much as GBP650 million
(US$990 million).  The final amount will be made public on
Oct. 20, Bloomberg notes.

Bloomberg recalls the Parliamentary Ombudsman said last year the
government should compensate Equitable Life policyholders affected
when the insurer faltered in 2000 because the government and
regulators failed to properly supervise it for a decade.

Mr. Hoban appointed Brian Pomeroy, a former senior partner at
Deloitte & Touche LLP and John Tattersall, formerly of
Pricewaterhouse Coopers LLP, to advise on the payout, Bloomberg
discloses.

Equitable Life struggled to stave off collapse after the
House of Lords, Britain's highest court, ruled in 2000 it
Couldn't abandon promises to policyholders to pay bonuses it could
no longer afford, Bloomberg recounts.  According to Bloomberg, the
ruling left the company with a GBP1.5 billion hole in its
accounts, forcing it to cut policy payouts to customers in the U.K
and more than 15,000 in other European Union countries including
Ireland and Germany.

The Equitable Life Assurance Society, founded in 1762, provided
life insurance, annuities, pensions, and permanent health
insurance to some 650,000 customers in the UK, Germany, and
Ireland, until it ceased writing new business in 2000 after a
House of Lords ruling that it underpaid some 90,000 guaranteed-
annuity policyholders.  After losing its court battle, it sought a
buyer.  Mortgage bank Halifax plc bought much of the troubled
company and formed Halifax Equitable (part of Lloyds Banking
Group, formerly HBOS plc).  Equitable Life has given up hopes of a
buyer and intends to just let its business continue until there
are no more policy holders.


GUINEAS CENTRE: Enters Administration Proceedings
-------------------------------------------------
Hanna Sharpe at Business Sale Report reports that the Guineas
Centre shopping center in Newmarket, Suffolk, is now in the hands
of receivers, though individual shops are not affected by the
move.

The report relates property consultants Allsop LLP were called in
to manage the administration process for the Guineas Centre.

According to the report, Jon Gershinon of Allsop said that there
is no specific timeframe for the administration proceedings, and
that the businesses in the center are continuing to trade as
usual.

Work that would have seen the center extended had to be postponed
when the hardships of the recession hit, the report notes.

The Guineas Centre is managed by London firm Centenary Asset
Management on behalf of the owners Forest Health District Council,
according to Business Sale Report.


MONTGOMERY ENTERPRISES: Ordered Into Liquidation Following Probe
----------------------------------------------------------------
Three companies operating a sports betting service have been
ordered into liquidation following an Insolvency Service
investigation on behalf of the Government.

Company Investigations of the Insolvency Service found that
Montgomery Enterprises Limited (Enterprises) and Indeleck UK
Limited (Indeleck), both run by Wayne Montgomery and trading under
the style of "Belmont Sporting Services" and "Preferential Sports
Investments", were placing bets on sporting events on behalf of
customers for commission.  A third company, Heathridge Capital
Management Limited (Heathridge) was connected to Enterprises and
Indeleck and appeared to have been set up for a similar purpose.

The investigation found that Enterprises and Indeleck advertised
their services through targeted mail-shots inviting potential
customers to "invest" between GBP250.00 and GBP12,000, a
proportion of which would be used for each bet.  Mail-shots sent
out by the companies contained claims that a GBP250.00 investment
could produce an average monthly income, before commission, of
GBP310.00.  Bets were selected using a software system and
collective bets would be placed for all customers who wanted to
bet on a particular day.

In addition the investigation found there was a deliberate lack of
transparency to mislead customers about who was in actual control
and which company they were dealing with.  Furthermore, although
over GBP282,000 passed through the companies' bank accounts
between November 2008 and October 2009 and betting records showed
that bets totaling over GBP516,000 had been placed, insufficient
records were kept to enable investigators to distinguish
transactions between the companies, to identify customers, or to
establish details of "investments", wagers and winnings.  In the
absence of such information, there was no evidence to support the
claims made in the mail-shots.

Investigators were also unable to find any evidence of the
companies paying any monies at all to customers in respect of
winnings.  Winnings were allegedly paid in cash to customers and
no copies of any letter which might accompany such winnings to
support this claim was produced during the investigation.

The petitions to wind up all three companies in the public
interest were presented on June 1, 2010 and they were wound up by
the High Court on July 21, 2010.


PREFERRED RESIDENTIAL: Fitch Lifts Rating on Class FTc Notes to CC
------------------------------------------------------------------
Fitch Ratings has upgraded four and affirmed 24 tranches of three
Preferred Residential Securities transactions.  The performance
review resulted in a revision of Outlook on six tranches of PRS05-
1 and PRS05-2: four were revised to Positive from Stable and two
to Stable from Negative.  The upgrades of the un-collateralized
ETc notes in PRS05-2 and PRS06-1 reflect the agency's expectation
that the tranches will be paid in full in the upcoming interest
payment dates.

As of the June 2010 IPD the volume of loans in arrears by more
than three months had stabilized in all three transactions.  As
all three pools have deleveraged significantly, the portion of
loans in arrears by more than three months makes up between 23.0%
(PRS06-1) and 28.3% (PRS05-2) of the outstanding pools.

In the short term, with the stabilization in arrears and the
decline in losses realized from repossessed properties, Fitch
expects the reserve fund of PRS 06-1 to reach its target amount in
the September 2010 IPD.  This transaction is also likely to switch
to pro rata note amortization, so long as the loans in arrears
continue to decline and remain at levels below the 22.5% trigger
set in the transaction documentation.

Meanwhile, the uncollateralized class ETc notes of PRS05-2, which
currently stand at GBP35,893 are expected to pay in full in
September 2010.  This expectation is based on the declining level
of repossessions and losses that this transaction has incurred
over the past four quarters, which Fitch believes will remain the
case in the upcoming IPDs.  In turn, the uncollateralized notes
that have to date been capitalizing interest, are expected to
start amortizing in H210.  However, the future principal and
interest payments of this tranche remain exposed to the
performance of the underlying loans, particularly in a rising
interest rate environment, which is expected during 2011.

Provided that arrears levels continue to decline, in the short
term, PRS05-1 and PRS05-2 may revert to pro rata amortization.
Fitch expects the pro rata switch on all three deals to be
temporary, as any increase in interest rates is likely to result
in arrears triggers being breached and potential draws on reserve
funds.

Fitch notes that the deleveraging has resulted in adverse
selection of the loans within the pools.  The volume of borrowers
with current loan-to-value ratios greater than 80% make up between
37.3% (PRS05-1) and 47.2% (PRS06-1) of the outstanding portfolio
compared with the levels at closing: 42.7% (PRS05-1) to 55.5%
(PRS06-1).  In addition, more than half of the borrowers in the
pools have not had their income verified at the time their loan
was originated compared with the range of 42.5% (PRS05-2) to 57.8%
(PRS06-1) at closing.  Limited refinancing opportunities for the
remaining borrowers in these pools are reflected in the decline in
prepayment rates.  According to the investor reports the
conditional prepayment rate stood between 6.1% (PRS06-1) and 7.6%
(PRS05-2) compared with CPRs of over 30%at the peak of the housing
market in 2007.

Fitch maintains its view that house prices will decline 25% peak-
to-trough, which implies that losses from high LTV loans are
likely to lead to losses for the transactions.  This risk is
reflected in the Negative Outlooks on the junior tranches of these
deals.

The ratings are:

Preferred Residential Securities 05-1 plc

  -- Class A2c (ISIN XS0217069656): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B1a (ISIN XS0217637213): affirmed at 'AA'; Outlook
     revised to Positive from Stable; assigned Loss Severity
     Rating 'LS-2'

  -- Class B1c (ISIN XS0217069813): affirmed at 'AA'; Outlook
     revised to Positive from Stable; assigned Loss Severity
     Rating 'LS-2'

  -- Class C1c (ISIN XS0217070076): affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D1c (ISIN XS0217070829): affirmed at 'BBB'; Outlook
     revised to Stable from Negative; assigned Loss Severity
     Rating 'LS-3'

  -- Class E (ISIN XS0217071041): affirmed at 'B+'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

Preferred Residential Securities 05-2 plc

  -- Class A2a (ISIN XS0234203684): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class A2c (ISIN XS0234204732): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B1a (ISIN XS0234207594): affirmed at 'AA'; Outlook
     revised to Positive from Stable; assigned Loss Severity
     Rating 'LS-3'

  -- Class B1c (ISIN XS0234208485): affirmed at 'AA'; Outlook
     revised to Positive from Stable; assigned Loss Severity
     Rating 'LS-3'

  -- Class C1a (ISIN XS0234209020): affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1c (ISIN XS0234209459): affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D1c (ISIN XS0234212594): affirmed at 'BB'; Outlook
     revised to Stable from Negative; assigned Loss Severity
     Rating 'LS-3'

  -- Class E1c (ISIN XS0234213642): affirmed at 'B'; Outlook
     Negative; assigned Loss Severity Rating 'LS-5'

  -- Class ETc (ISIN XS0234214533): upgraded to 'B' from 'B-';
     Outlook Stable

  -- Class FTc (ISIN XS0234215340): upgraded to 'B' from 'CCC';
     Outlook Stable'

Preferred Residential Securities 06-1 plc

  -- Class A2a (ISIN XS0243656625): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class A2b (ISIN XS0243704532): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class A2c (ISIN XS0243663837): affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B1a (ISIN XS0243655577): affirmed at 'AA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class B1c (ISIN XS0243665022): affirmed at 'AA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1a (ISIN XS0243658670): affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1c (ISIN XS0243665964): affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D1a: (ISIN XS0243659728) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-3'

  -- Class D1c (ISIN XS0243666939): affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-3'

  -- Class E1c (ISIN XS0243669529): affirmed at 'CCC'; Recovery
     Rating is 'RR1'

  -- Class ETc (ISIN XS0243673984): upgraded to 'CCC' from 'CC';
     Recovery Rating is 'RR1'

  -- Class FTc (ISIN XS0243675336): upgraded to 'CC' from 'C';
     Recovery Rating is 'RR5'


PROFFITTS OF GREAT LEVER: Reduced Trade Prompts Administration
--------------------------------------------------------------
Cabinet Maker reports that Proffitts of Great Lever Ltd. has gone
into administration after over a century of trading.

The report relates the company went into administration on
July 20.  It has been under increasing financial pressure because
of reduced trade, the report says, citing administrators who are
looking to sell the company as a going concern.

Proffitts of Great Lever Ltd. is a furniture retailer based in
Bolton.


ROAR BETTING: Nine Betting Shops Sold by Administrators
-------------------------------------------------------
Kevin Reed at Accountancy Age reports that administrators from
Leonard Curtis sold nine out of ten betting shops of insolvent
chain Roar Betting.

According to the report, five of ten outlets of Roar Betting have
been sold to Paddy Power, by administrators Neil Bennett and
Michael Healey of Leonard Curtis.  They sold another two to
Ladbrokes, the report discloses.  One of Roar's former directors
is taking on two of the shops, while the last store will be
closed, the report notes.

The deals will save 31 jobs out of 41, the report says.

The report recalls Roar had GBP59 million of turnover for year
ended December 31, 2009, but losses in some of the shops saw the
businesses enter administration.

Roar Betting is a gambling chain based in the United Kingdom.


SOUTHERN PACIFIC: Fitch Affirms 'C' Ratings on Class FTc Notes
--------------------------------------------------------------
Fitch Ratings has upgraded five and affirmed 25 tranches of three
Southern Pacific Securities transactions.  The rating actions
follow a performance review of the underlying assets in these
deals.

The upgrades of class B1 and C1 notes of SPS 05-2 reflect a
significant increase in credit enhancements on theses notes as the
transaction remains in sequential amortization since closing due
to the breach of arrears triggers and reserve fund draws

Loans in arrears by more than three months have been at the higher
end of the scale, compared with other Fitch-rated UK non-
conforming transactions.  High period loss severities seen in
these deals to date have been driven by second-charge loans in the
pools.  All three transactions SPS 05-2, SPS 05-3 and SPS 06-1
have significantly deleveraged and currently stand between 16.3%
(SPS 05-2) and 27.6% (SPS 06-1) of their original amounts.

In September 2010, the outstanding class A2c notes of SPS 05-2 are
expected to pay in full.  The current level of credit support
available to the class B1 (59.6%) and C1 (32%) notes is sufficient
to withstand Fitch's 'AAA' and 'AA' expected losses respectively,
resulting in the upgrade.  Meanwhile, the reserve fund on this
transaction has been replenishing since March 2010 and in June
2010 it stood at 90.1% of its target amount.  With the
stabilization in arrears and the decline in the volume of losses
incurred from the sale of repossessed properties, Fitch expects
the reserve fund to reach its target amount by H111, at which
point the un-collateralized class E2c notes are expected to resume
their amortization.  This situation would be unlikely if the
volume of repossessions were to increase; however, given the low
interest rate environment Fitch does not expect this to occur
during 2010.

With outstanding repossessions at 3% of the pool, of which 93% are
first lien, Fitch expects losses in SPS 05-3 to remain at levels
seen in the past two interest payment dates.  To date, cumulative
losses have reached 3.2% of the original pool balance.  Although
this is deemed to be high, this has proved beneficial to the
noteholders, as the reserve fund is unable to amortize and
additional credit support is available, especially to the class E1
notes.  With the current level of excess spread generated at each
IPD, the class ETc notes are expected to pay in full by end-2011,
at which point the class FTc notes may start to amortize.  This
view is reflected in the revision of the recovery rating of ETc to
'RR2'.

SPS 06-1 has also seen an improvement in performance.  The volume
of loans in arrears by more than three months has been stabilizing
over the past four IPDs.  The level of outstanding repossessions
has declined to 1.5% of the current pool (compared with the 8.3%
peak in March 2009).  As a result, the reserve fund was able to
replenish and in June 2010 it stood at 94.7% of its target amount.
Fitch expects the reserve fund to reach its target amount in the
next IPD in September 2010, which will lead to the repayment of
principal on the class DTc notes.

Future reserve fund draws in these transactions are highly
dependent on the volume of properties sold each period and the
level of losses incurred.  At present the transactions should have
sufficient revenue to cover the level of losses that are likely to
be realized from the reduced book of current repossessions.
Fitch's view is that the performance of the underlying assets in
all three transactions remains exposed to future rises in interest
rates, as well as the lagging effect of unemployment.  For this
reason the agency remains cautious on the future performance of
the deals and this is reflected in the level of stress applied at
each rating category.  The agency is concerned that the high level
of current arrears could quickly turn into an increase in
repossessions if interest rates increase.  This is reflected in
the Negative Outlook on the junior tranches of each transaction.

Rating actions are:

Southern Pacific Securities 05-2 plc

  -- Class A2c (ISIN XS0225858512) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-5'

  -- Class B1a (ISIN XS0225861490) upgraded to 'AAA' from 'AA';
     Outlook Stable; assigned Loss Severity Rating 'LS-3'

  -- Class B1c (ISIN XS0225862894) upgraded to 'AAA' from 'AA';
     Outlook Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1a (ISIN XS0225865483) upgraded to 'AA' from 'A';
     Outlook Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1c (ISIN XS0225876688) upgraded to 'AA' from 'A';
     Outlook Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D1a (ISIN XS0225877652) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-3'

  -- Class E1c (ISIN XS0225879278) affirmed at 'CCC'; Recovery
     Rating is 'RR2'

  -- Class E2c (ISIN XS0225879518) upgraded to 'CC' from 'C';
     Recovery Rating is 'RR5'

Southern Pacific Securities 05-3 plc:

  -- Class A2a (ISIN XS0235514972) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class A2c (ISIN XS0235515607) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class B1a (ISIN XS0235516084) affirmed at 'AA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class B1c (ISIN XS0235516241) affirmed at 'AA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1a (ISIN XS0235516324) affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1c (ISIN XS0235516753) affirmed at 'A'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D1a (ISIN XS0235516837) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

  -- Class D1c (ISIN XS0235517215) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

  -- Class E1c (ISIN XS0235517728) affirmed at 'CCC'; Recovery
     Rating is'RR2'

  -- Class ETc (ISIN XS0235517991) affirmed at 'CC'; Recovery
     Rating revised to 'RR2' from Distressed Recovery Rating 'DR5'

  -- Class FTc (ISIN XS0235518296) affirmed at 'C'; Recovery
     Rating is 'RR6'

Southern Pacific Securities 06-1 plc:

  -- Class A2a (ISIN XS0240948397) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class A2c (ISIN XS0240957380) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class B1c (ISIN XS0240950880) affirmed at 'AA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C1a (ISIN XS0240951185) affirmed at 'A-'; Outlook
     revised to Stable from Negative; assigned Loss Severity
     Rating 'LS-3'

  -- Class C1c (ISIN XS0240952076) affirmed at 'A-'; Outlook
     revised to Stable from Negative; assigned Loss Severity
     Rating 'LS-3'

  -- Class D1a (ISIN XS0240952316) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

  -- Class D1c (ISIN XS0240953470) affirmed at 'BB'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

  -- Class E1c (ISIN XS0240954015) affirmed at 'CC'; Recovery
     Rating is 'RR4'

  -- Class DTc (ISIN XS0240953710) affirmed at 'CCC'; Recovery
     Rating revised to 'RR1' from Distressed Recovery Rating 'DR3'

  -- Class ETc (ISIN XS0240954957) affirmed at 'CC'; Recovery
     Rating revised to 'RR4' from Distressed Recovery Rating 'DR5'

  -- Class FTc (ISIN XS0240956572) affirmed at 'C'; Recovery
     Rating is 'RR6'


SOUTHERN PACIFIC: Fitch Affirms 'CCC' Rating on Class E Notes
-------------------------------------------------------------
Fitch Ratings has affirmed 15 tranches of three Southern Pacific
Financing RMBS transactions following a performance review of each
deal.

The underlying mortgage portfolios of all three deals have
deleveraged significantly.  The most seasoned, Southern Pacific
Financing deal SPF04-A, currently stands at 9.1% of its original
amount, and as a result has seen a significant increase in the
credit enhancement levels of the rated tranches.  The
transaction's reserve fund is non-amortizing, but at the last two
interest payment dates, the issuer had reported limited reserve
fund draws.  Reserve fund draws are more common in highly seasoned
transactions because the income received from deleveraged loans,
in some cases, may not be sufficient to cover any additional costs
such as losses and provisions, other than senior fees and interest
payments due on notes.  In most cases, however, such reserve fund
draws do not have a major impact on the credit enhancement levels
of the most junior tranches.

As of the last investor report in June 2010, the volume of
mortgage loans in arrears by more than three months stood at
approximately GBP6 million (18.7% of the current portfolio), while
outstanding repossessions stood at GBP390,000 (1.2% of the pool).
With cumulative loss severities of 11.9%, and the weighted average
loan-to-value of the pool at 76.7%, Fitch expects that further
limited reserve fund draws will occur.  However, the agency does
not anticipate that this would impact the deal's current ratings,
which is why SPF 04-A's notes were affirmed.

Meanwhile, the stabilization of arrears, and consequently
outstanding repossessions, in SPF 05-B, have led to a decline in
the volume of losses incurred each period, which is why its
reserve fund was able to replenish.  In June 2010, the issuer
reported the reserve fund balance at 99.7% of its target amount.
Fitch believes that the reserve fund will reach its target amount
at its next interest payment date in September 2010.  If arrears
are stabilized further, the notes are expected to switch to a pro-
rata amortization in H210.  However, Fitch believes that such a
switch will be short-lived, as higher interest rates and the
lagging effect of increased UK unemployment will impact borrower
affordability and are likely to cause another increase in arrears.
As a further deterioration in asset performance is expected in the
future, the agency has affirmed SPF 05-B's note ratings, but
maintained a Negative Outlook on the class E notes.  At the same
time, in Fitch's view, the current level of credit support
available to the class D notes is sufficient to withstand the 'BB'
expected loss, which is why the agency revised the Outlook on this
tranche to Stable.

SPF 06-A has experienced the highest period loss severities of the
three deals, however, to date, the transaction has not reported
any reserve fund draws.  This is due to the presence of an
interest rate cap reserve fund, which, in a period of high
interest rates, capped excess spread at the bottom of the interest
waterfall.  This feature has been utilized when the issuer did not
have sufficient revenue to cover for losses incurred from the sale
of repossessed properties.  In June 2010, the interest rate cap
reserve stood at GBP230,000, compared to GBP3.4m available in June
2008.

The stabilization in arrears in SPF 06-A led to the switch in note
amortization to pro-rata in December 2009.  Fitch's expectations
for SPF 06-A's asset performance are similar to those for SPF 05-
B, which is why the agency believes that the payment of note
principal will revert to a sequential basis in the long run.

The transactions will remain exposed to adverse selection as the
loans in the pools continue to deleverage.  At present, the
weighted average loan-to-value ratios in the transactions range
between 72.6% (SPF04-A) and 76.7% (SPF04-A), and self-certified
borrowers make up over 60% of underlying borrowers.  Fitch
believes that in times of economic stress and declining house
prices, such loans are most susceptible to default and are likely
to cause the issuer to incur losses.  At present Fitch believes
that the available revenue and credit enhancement available to the
notes will be sufficient to withstand the adverse selection of the
pool and deterioration in performance.

The ratings are:

Southern Pacific Financing 04-A plc:

  -- Class A (ISIN XS0190203124) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B (ISIN XS0190204445) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class C (ISIN XS0190205178) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-3'

  -- Class D (ISIN XS0190205681) affirmed at 'AA+'; Outlook
     Stable; assigned Loss Severity Rating 'LS-4'

  -- Class E (ISIN XS0190206143) affirmed at 'AA-'; Outlook
     Stable; assigned Loss Severity Rating 'LS-5'

Southern Pacific Financing 05-B plc:

  -- Class A (ISIN XS0221839318) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B (ISIN XS0221840324) affirmed at 'AA'; Outlook Stable;
     assigned Loss Severity Rating 'LS-3'

  -- Class C (ISIN XS0221840910) affirmed at 'A'; Outlook Stable;
     assigned Loss Severity Rating 'LS-3'

  -- Class D (ISIN XS0221841561) affirmed at 'BB'; Outlook revised
     to Stable from Negative; assigned Loss Severity Rating 'LS-3'

  -- Class E (ISIN XS0221842023) affirmed at 'B'; Outlook
     Negative; assigned Loss Severity Rating 'LS-5'

Southern Pacific Financing 06-A plc:

  -- Class A (ISIN XS0241080075) affirmed at 'AAA'; Outlook
     Stable; assigned Loss Severity Rating 'LS-2'

  -- Class B (ISIN XS0241082287) affirmed at 'AA'; Outlook Stable;
     assigned Loss Severity Rating 'LS-3'

  -- Class C (ISIN XS0241083764) affirmed at 'BBB'; Outlook
     revised to Stable from Negative; assigned Loss Severity
     Rating 'LS-3'

  -- Class D1 (ISIN XS0241084572) affirmed at 'B'; Outlook
     Negative; assigned Loss Severity Rating 'LS-4'

  -- Class E (ISIN XS0241085033) affirmed at 'CCC'; Recovery
     Rating 'RR1'


VISTEON UK: Ford May Face Legal Action Over Pensions
----------------------------------------------------
Alan Jones at Belfast Telegraph reports that Unite has warned Ford
that it will press ahead with legal action if a dispute over the
pension rights of thousands of former Visteon UK workers is not
resolved.

According to the report, Unite accused Ford of providing
"misleading" advice to the employees, who switched to Visteon in
2000, telling them that their accrued pension rights would be
protected.  Up to 4,000 workers were told they could lose as much
as half of their pension entitlements when Visteon went into
administration last year, the report relates.

"Hundreds of workers, many of them close to retirement, were
sacked at a minute's notice and lost their pensions.  We believe
Ford misled many of these workers, leading them to believe their
pensions were safe with Visteon," the report quoted Unite's
national officer, Roger Maddison, as saying.

The report relates Ford said it met or exceeded its obligations
when Visteon became fully independent, covering the transfer of
employees to Visteon UK and their pensions into the Visteon fund.

As reported in the Troubled Company Reporter, Visteon UK, a
company organized under the laws of England and Wales and an
indirect, wholly-owned subsidiary of Visteon Corp., filed on
March 31, 2009, for administration under the United Kingdom
Insolvency Act of 1986 with the High Court of Justice, Chancery
division in London, England.  The UK administration was initiated
in response to continuing operating losses of the Visteon UK and
mounting labor costs and their related demand on the company's
cash flows.

Visteon UK was a car parts firm.  It operated in Enfield, UK,
Basildon, UK, and Belfast, UK and recorded sales of US$250 million
for the year ended December 31, 2008.  It had total assets of
US$153 million as of December 31, 2008.


* UK: Launches Consultation on Restructuring Moratorium Proposals
-----------------------------------------------------------------
The Insolvency Service on Monday launched a 12-week consultation
on proposals for a new restructuring moratorium.  The proposals
would provide company directors with the option of obtaining a
protected breathing space in which to negotiate with their
creditors and reorganize their business affairs, through a new
statutory moratorium.

Launching the consultation, Edward Davey, Minister responsible for
the Insolvency Service, said: "I encourage everyone with an
interest in business finance and restructuring to study the
proposals for a restructuring moratorium set out in this
consultation.  This is the time to make your views count.

"Even large and otherwise successful businesses can find
themselves facing temporary difficulties, for example when they
have inherited very high levels of debt.  These proposals are
intended to help them act early to resolve problems, safeguarding
jobs and promoting sustainable economic growth."

The option of applying for a restructuring moratorium would be
available to companies that are seeking a contractual compromise,
or are preparing a statutory compromise proposal -- either a
Company Voluntary Arrangement or a Scheme of Arrangement.   For
companies that were failing or were already insolvent, existing
insolvency procedures (including administration or liquidation)
would continue to apply.

The consultation can be found at
http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/co
n_doc_register/RestructuringMoratoriumConsultationDocument.pdf
and invites stakeholders and other interested parties to review
the proposals and respond to The Insolvency Service with any
comments, which will be taken into consideration by the Minister.


                            *********

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.


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