TCREUR_Public/110309.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Wednesday, March 9, 2011, Vol. 12, No. 48

                            Headlines



A Z E R B A I J A N

ACCESSBANK PLC: Fitch Affirms 'BB+' LT Issuer Default Rating
KAPITAL BANK: Fitch Affirms 'B+' Long-Term Issuer Default Rating


D E N M A R K

* DENMARK: Mergers Likely as Small Banks Face Refinancing Woes


F I N L A N D

M-REAL CORP: S&P Gives Positive Outlook; Affirms 'B-' Rating


G E O R G I A

GEORGIAN RAILWAY: Fitch Gives Positive Outlook; Affirms B+ Rating
VTB BANK: Fitch Maintains 'D/E' Individual Rating


G E R M A N Y

VCL FILM: Court Opens Insolvency Proceedings


I R E L A N D

ALLIED IRISH: Submits Plan to Split Core & Non-Core Assets
BANK OF IRELAND: Submits Plan to Split Core & Non-Core Assets
* IRELAND: Company Insolvencies Up 59% in February 2011
* IRELAND: 84% of Hotel Operators Worry Over Bankruptcy
* IRELAND: Incoming Gov't. May Introduce Bond Restructuring Laws

* IRELAND: ECB Urges Incoming Government to Recapitalize Banks
* IRELAND: Suspends Firesale Plans for Banks' Huge Loan Portfolios


N E T H E R L A N D S

ING GROEP: To Repay EUR2-Bil. Government Debt in May


P O L A N D

CENTRAL EUROPEAN: Moody's Reviews 'B1' Corporate Family Rating
ELECTUS SA: Fitch Withdraws 'B-' Long-Term Issuer Default Ratings


P O R T U G A L

LUSITANO MORTGAGES: S&P Cuts Rating on Class E Notes to 'BB-(sf)'


R U S S I A

BANK OF MOSCOW: London Court Freezes Goldman Sach's 3.9% Stake
BANK OF MOSCOW: Fitch Maintains 'D' Individual Rating
BANK UNIASTRUM: Moody's Cuts Long-Term Deposit Ratings to 'Ba3'
SOTSGORBANK OJSC: S&P Junks Counterparty Credit Rating From 'B-'


S P A I N

FINANCIACION BANESTO: S&P Puts 'BB' Rating on CreditWatch Negative
IM BANKOA: Moody's Assigns 'Ba2 (sf)' Rating on Class C Notes
U N I T E D   K I N G D O M
CPW ACQUISITION: U.S. Court Won't Hear Dispute Over Fortress Fees
GEMINI PLC: S&P Downgrades Rating on Class E Notes to 'D'

M&K: Goes Into Administration, Harboro Hotel Still in Business
PETER & SCOTT: 117 Former Workers Get Compensation
PRESBYTERIAN MUTUAL: Church Seeks Ruling on Bail-Out Donation
RETALLACK RESORT: Goes Into Administration
W A HILLS: Falls Into Administration on Cash Flow Problems

* UK: Eurosail Court Ruling Limits Balance Sheet Insolvency


X X X X X X X X

* EUROPE: More Robust Bank Stress Test Process Planned
* Moody's: Credit Insurers' Profits to Remain Constrained




                            *********


===================
A Z E R B A I J A N
===================


ACCESSBANK PLC: Fitch Affirms 'BB+' LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed AccessBank's Long-term foreign currency
Issuer Default Rating at 'BB+'.  The Outlook is Stable.

The affirmation of AB's IDR reflects Fitch's view of the
probability of support available from its international financial
institution shareholders, in particular KfW ('AAA'/Stable; 20%
stake), the European Bank for Reconstruction and Development
('AAA'/Stable; 20%) and the International Finance Corporation
('AAA'/Stable; 20%).  At the same time, Fitch notes some
uncertainty in respect to timely support always being provided in
case of need, given the fragmented nature of the shareholder
structure and the limited strategic importance of the bank for its
IFI owners.  For these reasons, AccessBank's Long-term IDR has
been affirmed at 'BB+', one notch below Azerbaijan's Country
Ceiling of 'BBB-'.

AB's Individual Rating of 'D' reflects Fitch's concerns over AB's
rapid asset growth in the challenging Azerbaijan operating
environment, and the still high reliance on wholesale funding.
However, it also takes into account so far resilient asset
quality, strong performance metrics, the currently significant
liquidity cushion and solid capitalization.

AB was established in 2002 as a bank specializing in microfinance
lending.  At end-2010, AB was the seventh-largest bank in
Azerbaijan by total assets and sixth-largest by total loans.

The rating actions are:

  -- Long-term IDR: affirmed at 'BB+'; Outlook Stable
  -- Short-term IDR: affirmed at 'B'
  -- Individual Rating: affirmed at 'D'
  -- Support Rating: affirmed at '3'


KAPITAL BANK: Fitch Affirms 'B+' Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Kapital Bank's Long-term foreign
currency Issuer Default Rating at 'B+'.  The Outlook is Stable.  A
full list of rating actions is at the end of this comment.

The affirmation of Kapital's 'B+' IDR reflects Fitch's view of the
moderate probability of support being available from the
authorities in case of need, considering the bank's important role
in distributing pensions and other social payments through the
largest branch network in the country.  Fitch also notes that
Kapital is involved in policy-related lending, in particular
relating to road construction, funded by the Central Bank and the
Ministry of Finance.

At the same time, Fitch also notes uncertainty regarding the
provision of such support, given the bank's private ownership and
its modest market shares.

The Individual Rating reflects the bank's limited banking
franchise, the challenging operating environment and risks
stemming from rapid asset growth and weak asset quality.  However,
Kapital's capitalization and liquidity are adequate at present.

Kapital was the second-largest bank in Azerbaijan by assets and
retail deposits at end-2010 with market shares of approximately
6%.  The bank's controlling shareholder (99.8%) is the Pashaev
family, who are the in-laws of President Aliev.

The rating actions on Kapital Bank are:

  -- Long-term IDR: affirmed at 'B+'; Outlook Stable
  -- Short-term IDR: affirmed at 'B'
  -- Individual Rating: affirmed at 'D/E'
  -- Support Rating: affirmed at '4'
  -- Support Rating Floor: affirmed 'B+'


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


* DENMARK: Mergers Likely as Small Banks Face Refinancing Woes
--------------------------------------------------------------
Christian Wienberg at Bloomberg News reports that Ulrik Noedgaard,
director general of the Denmark's Financial Supervisory Authority,
said the country's financial industry faces consolidation as small
banks struggling to refinance debt before a state guarantee ends
in 2013 get absorbed by bigger rivals.

"Many banks will face challenges as they need to refinance the
individually guaranteed bonds," Bloomberg quotes Mr. Noergaard as
saying in a March 4 interview in Copenhagen.  "One of the tools
they can use is to strengthen by merging with other banks.  It's
on the cards that we'll have fewer banks."

Some of the banks that don't opt for mergers will be forced to
"scale down the number of loans," Mr. Noergaard, as cited by
Bloomberg, said.  "Share sale is another tool; that will boost
solvency, which is crucial if the banks want to raise funds in the
bond market."

According to Bloomberg, asked whether more Danish banks might
fail, Mr. Noergaard said "it's too early to make that conclusion.
There's still some risk out there on the loan books and we'll have
to wait and see how things develop."

Since Amagerbanken A/S failed on Feb. 6, setting a European Union
precedent by inflicting losses on depositors and senior
bondholders, Denmark's lenders have faced higher funding costs
than rivals outside the Nordic country, Bloomberg notes.


=============
F I N L A N D
=============


M-REAL CORP: S&P Gives Positive Outlook; Affirms 'B-' Rating
------------------------------------------------------------
Standard & Poor's Rating Services said that it revised its outlook
on Finland-based forest products company M-real Corp. to positive
from stable.  At the same time, the long- and short-term corporate
credit ratings were affirmed at 'B-' and 'B', respectively.

In addition, S&P affirmed the issue ratings on the senior
unsecured debt at 'B-'.  The recovery rating is '4', indicating
its expectation of average (30%-50%) recovery in the event of
payment default.

"The outlook revision primarily reflects S&P's view of M-real's
improved operating performance, together with its opinion that
demand for the company's products will stabilize or continue to
improve in 2011," said Standard & Poor's credit analyst
Alexander Gusterman.  "Similarly, S&P believes that implemented
and announced increases in selling prices will continue to support
M-real's profitability and cash flow generation in the short to
medium term."

In S&P's opinion, M-real's prospects for generating meaningful
funds from operations over the near term have improved, primarily
because of the continued improvement in demand for the company's
main products, higher selling prices in the packaging and fine
paper segments, and high but stabilized market pulp prices.  S&P
anticipate working capital outflow in the first half of 2011,
driven by strong sales and pricing effects.  Accordingly, in S&P's
base-case scenario, S&P foresee that cash flows from operations
will be pressured but positive in the first half of 2011.

S&P forecast that full-year free operating cash flow will be
significantly positive, with some support from what S&P
anticipates will be a sizable upcoming dividend payment from pulp
company Metsa-Botnia (30%-owned by M-real; not rated).  However,
S&P also sees some downside risk relating to cash conversion from
potential cash calls on foreign exchange-related hedge positions
and other operating cash outflows, as was the case in 2010.

In S&P's view, the prospects of continued, supportive market
conditions, and opportunities for further operational improvements
that should counterbalance what S&P anticipates will be an
environment of cost inflation.  In S&P's opinion, these factors
will support M-real's operating and financial performance over the
short to medium term.  S&P also anticipates that M-real will
maintain an adequate liquidity position.

S&P could take a positive rating action if S&P saw improved
operating performance translate into strong cash conversion with
meaningfully positive FOCF.  In S&P's view, this would require a
combination of continued supportive demand and pricing dynamics
for M-real's product portfolio, as well as the successful
implementation of announced restructuring efforts.  Rating upside
could also occur if FFO to debt were to reach a level that S&P
considers commensurate with an aggressive financial risk profile;
and if M-real were to maintain an adequate liquidity position.

Downward rating pressure could arise from any indications of
M-real's liquidity position coming under pressure, and could
result in a revision of the outlook to stable or a one-notch
downgrade.  In S&P's opinion, such pressure could arise from an
unexpected reversal of market conditions.  It could also result
from significant cash consumption from a combination of a buildup
of working capital; excessive capital expenditures; or other
operational cash outflows, such as significant cash calls from
hedging positions.


=============
G E O R G I A
=============


GEORGIAN RAILWAY: Fitch Gives Positive Outlook; Affirms B+ Rating
-----------------------------------------------------------------
Fitch Ratings has revised the Outlook on Georgian Railway LLC's
Long-term foreign and local currency Issuer Default Ratings to
Positive from Stable and affirmed the ratings at 'B+'.  The agency
has also affirmed GR's foreign and local currency senior unsecured
ratings at 'B+', Recovery Ratings at 'RR4', Short-term foreign and
local currency IDRs at 'B' and GR's US$250 million notes due 2015
at 'B+'.

GR's IDRs continue to be aligned with Georgia's sovereign ratings
('B+'/Positive/'B').  The rating action follows the revision of
the Outlook on Georgia's Long-term foreign and local currency IDRs
to Positive.

The rating alignment reflects the company's strong linkage with
the government.  This stems from the company's 100% ownership by
the government, its importance to the economy as the largest
taxpayer and employer, its dominance of Georgia's freight
transportation sector, its strategic importance as the regional
transit corridor and government backing for its two key investment
projects.  The latter is, among other factors, evidenced by a
dividend moratorium, future assistance with land disposals and
refundable VAT.  The government no longer guarantees any of GR's
debt.  Unauthorized change of control would be an event of default
under some of the loan covenants.

Fitch considers GR's standalone business and financial profile as
strong compared with the country's creditworthiness.  This is
supported by the integrated nature of its business, liberal
tariff-setting which underpins healthy profit margins, especially
on its transit cargoes, and its relatively predictable cash flows.


VTB BANK: Fitch Maintains 'D/E' Individual Rating
-------------------------------------------------
Fitch Ratings has revised the Outlooks on JSC VTB Bank Georgia's
and ProCredit Bank (Georgia)'s 'BB-' Long-term Issuer Default
Ratings to Positive from Stable.  At the same time, the agency has
affirmed JSC Liberty Bank's Long-term IDR at 'B' with a Stable
Outlook.

The rating actions follow the revision of the Outlook on Georgia's
Long-term foreign and local currency IDR of 'B+' to Positive from
Stable.

The change in Outlooks on VTBG's and PCBG's Long-term IDR reflects
the increased likelihood of an upgrade of Georgia's Country
Ceiling of 'BB-', following the change in the sovereign Outlook.
Georgia's Country Ceiling captures transfer and convertibility
risks and limits the extent to which support from the foreign
shareholders of these banks can be factored into their Long-term
foreign currency IDR.  PCBG's Long-term local-currency IDR also
takes account of Georgia's country risks.

VTBG is 92.6%-owned by Russian state-controlled bank JSC VTB Bank
('BBB'/Stable) and PCBG is 100%-owned by Germany's ProCredit
Holding AG ('BBB-'/Stable).  The Long- and Short-term IDR and
Support Ratings of both banks reflects the likely high propensity
of their shareholders to provide support, in case of need.

Fitch notes that VTBG remains potentially exposed to political
risks in light of the strained nature of Georgian-Russian
relations.  However, in Fitch's view, the actions of the Georgian
authorities, which have continued to regulate VTBG in line with
other local banks, and of JSC VTB Bank, which recapitalized its
Georgian subsidiary during the crisis, suggest that VTBG is likely
to be able to continue receiving and utilizing support from JSC
VTB Bank.

The affirmation of LB's IDR with a Stable Outlook reflects Fitch's
expectation that the bank's ratings are unlikely to change even if
Georgia's Long-term IDRs are upgraded to 'BB-'.  LB's Long-term
IDR continues to be underpinned by support the bank may receive in
case of need from the Georgian authorities, given the bank's
important social function in distributing pensions and social
benefits, and the support received by the bank during 2008-2009.
However, the bank's private ownership and still moderate market
shares mean that this support potential would probably not be
sufficient to drive an upgrade of the bank, even if the Georgian
sovereign is upgraded to 'BB-'.

The ratings of other Georgian banks are unaffected by the rating
action on Georgia as their Long-term IDRs are not driven by
sovereign support or constrained by the Country Ceiling.  The
Long-term IDRs of Bank of Georgia ('B+'/Stable) and Basisbank ('B-
'/Stable), are driven by their standalone strength, while that of
TBC Bank ('B+'/Stable) reflects potential support from its
international financial institution shareholders.
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.  The Individual
Ratings of the banks covered in this commentary have not been
reviewed as part of the rating actions.

The rating actions are:

VTBG

  -- Long-term foreign currency IDR: affirmed at 'BB-'; Outlook
     revised to Positive from Stable

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

  -- Support Rating: affirmed at '3'

  -- Individual Rating: remains at 'D/E'

PCBG

  -- Long-term foreign currency IDR: affirmed at 'BB-'; Outlook
     revised to Positive from Stable

  -- Long-term local currency IDR: affirmed at 'BB-'; Outlook
     revised to Positive from Stable

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

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

  -- Support Rating: affirmed at '3'

  -- Individual Rating: remains at 'D'

LB

  -- Long-term foreign currency IDR: affirmed at 'B'; Outlook
     Stable

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

  -- Support rating: affirmed at '4'

  -- Support rating floor: affirmed at 'B'

  -- Individual Rating: remains at 'D/E'


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


VCL FILM: Court Opens Insolvency Proceedings
-------------------------------------------
The Amtsgericht Munchen (Register Court) on Monday opened
insolvency proceedings over the assets of VCL Film + Medien AG.

As reported by the Troubled Company Reporter-Europe on Sept. 23,
2010, The Hollywood Reporter said VCL Film + Medien filed for
insolvency protection after negotiations with British and
Scandinavian partners failed to produce the deal needed to keep
the company afloat.  At the time of its insolvency filing, VCL
employed four people, The Hollywood Reporter disclosed.

VCL Film + Medien -- http://www.vcl.de/-- is the leading home
video distributor in Germany.  It supplies DVDs for rental or sale
to video outlets and retail stores in Germany, Switzerland, and
Austria.  VCL Film + Medien runs its license trading and video/DVD
sales through its VCL Communications (home entertainment)
subsidiary.  The company owns a library of more than 600 movie
titles, many of which it is many of which it is converting to the
Blu-ray High Definition format.  CEO Gunter Detlef Ruth co-founded
VCL Film + Medien in 1981.


=============
I R E L A N D
=============


ALLIED IRISH: Submits Plan to Split Core & Non-Core Assets
----------------------------------------------------------
Laura Noonan at Irish Independent reports that AIB and Bank of
Ireland have both submitted plans to the Central Bank that would
see their assets separated into "core" and "non-core" operations.

According to Irish Independent, the Central Bank is reviewing the
banks' proposals with a view to making an announcement on the
restructuring of Ireland's entire banking system at the end of
March.

Any restructuring strategy must also have the agreement of the
European Commission, the ECB, the International Monetary Fund, the
Department of Finance and the National Treasury Management Agency,
Irish Independent notes.

The "non-core" portions could include entire businesses -- such as
UK operations -- and could also include piles of loans in areas
the banks are withdrawing from, Irish Independent discloses.

Irish Independent's sources said that "no decision" had been made
on whether both AIB and Bank of Ireland would each have their own
internal "bad banks" for the non-core assets, or whether there
would be a sector-wide "bad bank" to mop up the non-core assets of
several Irish banks.  According to Irish Independent, sources also
said the ownership structure for the non-core assets had not yet
been worked out.

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

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Jan. 20,
2011, Standard & Poor's Ratings Services raised its ratings on the
lower Tier 2 subordinated debt issued by Allied Irish Banks PLC
(AIB; BBB/Watch Neg/A-2), which had been subject to the exchange
offer, to 'CCC' from 'D'.  The 'BBB/A-2' counterparty credit
ratings on AIB remain on CreditWatch with negative implications,
where they were placed on Nov. 26, 2010.

"This 'CCC' rating reflects the fact that AIB will need to raise
further equity capital before end-February, that it may require
further capital as a result of the PCAR stress test, and our view
that there is a clear and present risk that these instruments
could be subject to further restructuring-like action in order to
achieve it," said Standard & Poor's credit analyst Nigel
Greenwood.

The ratings on AIB were placed on CreditWatch with negative
implications on Nov. 26, 2010, pending the outcome of a sovereign
rating review.  S&P views the fortunes of the Irish sovereign as
intertwined with those of the banking system, and a downgrade of
the sovereign may impact its ratings on AIB.


BANK OF IRELAND: Submits Plan to Split Core & Non-Core Assets
-------------------------------------------------------------
Laura Noonan at Irish Independent reports that AIB and Bank of
Ireland have both submitted plans to the Central Bank that would
see their assets separated into "core" and "non-core" operations.

According to Irish Independent, the Central Bank is reviewing the
banks' proposals with a view to making an announcement on the
restructuring of Ireland's entire banking system at the end of
March.

Any restructuring strategy must also have the agreement of the
European Commission, the ECB, the International Monetary Fund, the
Department of Finance and the National Treasury Management Agency,
Irish Independent notes.

The "non-core" portions could include entire businesses -- such as
UK operations -- and could also include piles of loans in areas
the banks are withdrawing from, Irish Independent discloses.

Irish Independent's sources said that "no decision" had been made
on whether both AIB and Bank of Ireland would each have their own
internal "bad banks" for the non-core assets, or whether there
would be a sector-wide "bad bank" to mop up the non-core assets of
several Irish banks.  According to Irish Independent, sources also
said that the ownership structure for the non-core assets had not
yet been worked out.

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

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Feb. 25,
2011, Standard & Poor's Ratings Services said that it raised its
ratings on the hybrid debt instruments issued by Bank of Ireland
(trading name of the Governor & Company of the Bank of Ireland)
and subsidiaries to 'CC' from 'C'.  S&P's 'BB+/B' counterparty
credit ratings on BOI were unaffected, but remained on CreditWatch
with negative implications.


* IRELAND: Company Insolvencies Up 59% in February 2011
-------------------------------------------------------
New statistics released by InsolvencyJournal.ie show that five
companies went out of business per day in February 2011.

According to InsolvencyJournal.ie, there was a 59% increase on the
January figures with 153 companies going bust, compared to 96 in
January.  This is the second highest monthly total
InsolvencyJournal.ie has recorded in its history.

"Although this month's figures are high, they are in line with the
rate of insolvencies for the same month last year.  February is
traditionally a very active month for insolvencies as companies
have made decisions to cease trading during January and this would
result in higher insolvencies this month," InsolvencyJournal.ie
quotes Ken Fennell, partner with kavanaghfennell, the firm who
compile the data, as saying.

All sectors saw some increase from January totals,
InsolvencyJournal.ie states.  InsolvencyJournal.ie notes that
construction continued to be the worst affected with 47
insolvencies, or over 30% of the total for February.  Retail
jumped from 9 in January to 25 in February and hospitality from 15
in January to 19 in February, InsolvencyJournal.ie relates.

Creditors' Voluntary Liquidations accounted for 72% of all
insolvencies for February, while Court Liquidations accounted for
just 7%, according to InsolvencyJournal.ie.  Receiverships showed
a significant increase from 9 in January to 31 in February,
accounting for in excess of 20% of February insolvencies,
InsolvencyJournal.ie discloses.

Mr. Fennell, as cited by InsolvencyJournal.ie, said "Overall the
first two month of 2011 are in line with 2010 statistics and our
opinion is that there will be approximately 1,500 insolvencies in
2011."


* IRELAND: 84% of Hotel Operators Worry Over Bankruptcy
-------------------------------------------------------
Donal O'Donovan and Laura Noonan at Irish Independent report that
84% of hotel operators fear they are at risk of going out of
business this year as high costs, a lack of bank finance and the
sluggish economy threaten their livelihoods.

Irish Independent says the biggest concerns of the 180 hoteliers
surveyed related to local authority rates, wage and utility costs,
and the banks.

The IHF wants the new Government to tackle costs, including by
"liberalizing" the energy market, Irish Independent states.
According to Irish Independent, hoteliers also want the Government
to introduce a "guarantee scheme" to help businesses access credit
and have suggested the creation of a "reconstruction or
development bank."

The review showed 46% of hoteliers suffered a fall in business,
while 72% cut staff in 2010, Irish Independent discloses.  The
number of foreign tourists fell to 5.7 million in 2010 from a peak
of 7.7 million in 2007, as the number of domestic trips fell 4% to
eight million, Irish Independent notes.  Overall spending dropped
13% to EUR4.6 billion, Irish Independent states.

Hotels responded by slashing prices, with room rates falling by
another 6%, leaving them down more than 30% over the past three
years, Irish Independent relates.

According to Irish Independent, more than half of those surveyed
said they'd experienced "difficulties" accessing "standard credit
facilities" over the past 12 months, while 28% said banks reduced
their overdraft.


* IRELAND: Incoming Gov't. May Introduce Bond Restructuring Laws
----------------------------------------------------------------
Colm Heatley at Bloomberg News reports that Ireland's incoming
government said it may need to introduce laws allowing the
restructuring of some senior bank bonds, as the country's debt
level risks becoming "unsustainable."

According to Bloomberg, the Fine Gael-Labour coalition, due to
take power on March 9, said laws may be needed to "extend the
scope of bank liability restructuring" to include senior unsecured
unguaranteed bank bonds, in proposals approved by both of the
parties on Sunday in Dublin.

"The outgoing government's blank cheque for bank policy must now
be ended," Bloomberg quotes the parties as saying in a joint
program for government.  "We must step back from the edge of
national insolvency."

Bloomberg relates that Labour leader Eamon Gilmore told party
members that the new government will set up a "war cabinet" to
combat the country's economic woes, which began in 2008 when the
ending of a decade-long housing boom was amplified by the global
financial crisis.  The outgoing government was forced to seek an
international bailout last year, and in return agreed to protect
senior bank bondholders, Bloomberg recounts.

The new government, which will be led by Enda Kenny, also wants to
cut the 5.8% interest rate on the EUR85 billion (US$119 billion)
aid package, Bloomberg notes.


* IRELAND: ECB Urges Incoming Government to Recapitalize Banks
--------------------------------------------------------------
Arthur Beesley at The Irish Times reports that European Central
Bank Chief Jean-Claude Trichet urged the incoming government to
proceed with the EUR10 billion recapitalization of AIB, Bank of
Ireland, and the EBS and said it should execute the agreed terms
of the EU-IMF bailout.

According to Bloomberg, Mr. Trichet also said the ECB planned to
continue providing unlimited emergency funding for distressed
banks for the next three months, a move that will benefit Irish
banks it is supporting to the tune of some EUR130 billion.
Bloomberg notes that when asked about the ECB's concern about
"addicted banks" who are hugely reliant on its emergency
liquidity, he implied that moves may be under way to wean banks
off such schemes.  "If and when we have a plan we will announce
it," Bloomberg quotes Mr. Trichet as saying.

Mr. Trichet, as cited by Bloomberg, said that while the outgoing
Government breached the terms of the EU-IMF deal by delaying a
EUR10 billion cash injection into the three banks last month, he
expected the new administration to fulfill that condition.


* IRELAND: Suspends Firesale Plans for Banks' Huge Loan Portfolios
------------------------------------------------------------------
Sharlene Goff and Patrick Jenkins at The Financial Times report
that the Irish authorities have suspended plans to force the
country's troubled banks to sell off huge portfolios of loans.

According to the FT, the delay means Ireland's biggest banks will
be dependent on emergency funding from the European Central Bank
for longer than hoped.

The country's banks need to offload as much EUR100 billion
(US$139 billion) of legacy assets as they undergo a drastic clean-
up of their balance sheets following the huge losses they suffered
during the financial crisis, the FT discloses.

The ECB, the FT says, wanted the deleveraging to be undertaken
quickly so the banks could whittle down their reliance on
emergency funding, which has risen to about EUR140 billion.

Regulators had initially planned to make swift progress, aiming to
sell off a large part of the unwanted portfolios within months of
Ireland's EUR85 billion bail-out announcement at the end of last
year, the FT relates.  To ease the sale process the bail-out by
the European Union and the International Monetary Fund included
GBP25 billion (US$41 billion) of contingent capital for the banks
to soak up potential losses from selling assets at cut-down
prices, the FT states.  However, following a review of the banks'
portfolios there were fears that a firesale would wipe out this
capital buffer by crystallizing greater-than-expected losses for
the banks, an outcome that could raise fresh concerns over the
stability of Ireland's sovereign debt, the FT notes.


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


ING GROEP: To Repay EUR2-Bil. Government Debt in May
----------------------------------------------------
Matt Steinglass at The Financial Times reports that ING bank will
repay EUR2 billion of the remaining EUR5 billion it owes the Dutch
government in May.

According to the FT, Jan Hommen, chief executive, said Monday that
the "strong recovery of the banking business in 2010" had enabled
ING to accelerate its repayment plans, and that it expected to
repay the remaining EUR3 billion in debt to the government by May
2012.  The company reported profits of EUR3.22 billion last year,
after losing EUR900 million in 2009, the FT relates.

The FT says the government will charge ING a flat 50% premium for
repayment of the state aid, bringing the total cost to EUR3
billion.

The FT notes that analysts said ING needed to unshackle itself
from government support as soon as possible in order to free
itself from restrictions imposed by the European Commission, which
regards the bank's original EUR10 billion capital injection from
the government in 2008 as a form of subsidy.

The Commission has ordered ING to split up its insurance and
banking businesses, and has barred it from offering best-in-market
rates on mortgages, leaving it at a disadvantage to other European
banks, the FT discloses.  In November, the Commission blocked ING
from repaying hybrid debt to private investors, saying it must
repay its state debt first, the FT recounts.

Headquartered in Amsterdam, the Netherlands, ING Groep N.V. --
http://www.ing.com/-- is a global financial institution offering
banking, investments, life insurance and retirement services.  The
Company serves more than 85 million private, corporate and
institutional customers in Europe, North and Latin America, Asia
and Australia.  ING has six business lines: Insurance Europe,
Insurance Americas, Insurance Asia/Pacific, Wholesale Banking,
Retail Banking and ING Direct.  In July 2008, the Company
completed the acquisition of CitiStreet LLC, a retirement plan and
benefit service and administration company in United States.  In
November 2008, ING Groep N.V. increased its stake in joint venture
Billington Holdings PLC from 50% to 100%.  In February 2009, the
Company announced that it closed the sale of its Taiwanese life
insurance business to Fubon Financial Holding Co. Ltd.  In April
2009, the Company sold its non-state pension fund business and its
holding company in Russia to Aviva plc.


===========
P O L A N D
===========


CENTRAL EUROPEAN: Moody's Reviews 'B1' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade Central European Distribution Corporation's B1 corporate
family rating and probability of default rating.  Concurrently,
the rating agency has placed on review for possible downgrade the
B1 rating on the company's senior secured notes due in 2016.

                        Ratings Rationale

"The rating action follows the significant deterioration in CEDC's
operating performances during the fourth quarter of 2010 in
addition to weak trading results during the first part of the
year," said Paolo Leschiutta, a Moody's Vice President-Senior
Analyst and lead analyst for CEDC.  On March 1, 2011, CEDC
reported an operating profit, before impairment and exceptional
costs, of US$116.7 million for the financial year ending December
2010, representing a 29% fall from the US$164.5 million reported a
year earlier.  In addition, the company also announced that it had
reached agreements with its core banks regarding the covenants on
its recently signed PLZ330 million bank facility.  Under these
arrangements, the banks agreed to waive the December 2010 and
March 2011 testing dates for the financial covenants.

"Moody's understands that the significant decline in CEDC's
profitability was a result of a number of exceptional items, such
as production disruption in Russia during the peak season and soft
demand in Poland," continued Mr. Leschiutta.  "However, in the
rating agency's view, the decline was also a result of more
structural issues, such as erosion of market share and the
company's decision to invest more in supporting its brands, which
could result in ongoing pressure on profitability."  In addition,
CEDC is still in negotiations with core banks to reset certain
financial covenants for future calculation periods, starting from
the June 2011 testing date, indicating that the company's future
profitability is likely to remain below previous expectations.

As a result of the decline in CEDC's operating profitability, the
company exhibited financial leverage -- measured as debt to EBITDA
adjusted for operating leases -- of 11.3x as at FYE December 2010,
which Moody's views as unsustainable for the current rating
category.  In the rating agency's view, a sustained increase in
the company's financial leverage above 5.0x is likely to result in
downward rating pressure.  Although not currently envisaged,
ongoing improvements in profitability and cash flow generation,
resulting in positive free cash flow and in a reduction of
financial leverage towards 3.5x are likely to place upward
pressure on the ratings.

Moody's ratings review will focus on these issues: (i) the
expected future profitability of CEDC in light of its new
investment strategy; (ii) CEDC's ability to renegotiate its
financial covenants to levels more in line with the expected
profitability and the overall liquidity profile of the company;
(iii) Moody's expectations for market conditions in both Russian
and Poland; and (iv) the expected key credit metrics of CEDC going
forward.  Moody's would expect to conclude its rating review
process within three months.

Moody's last rating action on CEDC was implemented on 15 November
2010, when the rating agency changed the company's rating outlook
to stable from positive.  This rating action followed CEDC's
weaker-than-expected operating performance for the year to date in
2010 and Moody's expectation that the company's future financial
deleveraging might be slower than previously anticipated.

Headquartered in Warsaw, Poland, CEDC is one of the largest vodka
producers in the world, with annual sales of around 32.7 million
nine-liter cases, mainly in Russia and Poland.  Following
investments in Russia over the past two years and the recent
disposal of its distribution business in Poland, CEDC generated
net revenues of around US$711 million during FYE December 2010.


ELECTUS SA: Fitch Withdraws 'B-' Long-Term Issuer Default Ratings
-----------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn all Poland-based Electus
S.A.'s ratings.

Fitch has withdrawn the ratings as Electus has chosen to stop
participating in the rating process.  Therefore Fitch will no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide rating or analytical
coverage for Electus.

Fitch has affirmed and withdrawn these ratings for Electus:

  -- Long-term foreign currency Issuer Default Rating of 'B-';
     Outlook Stable

  -- Long-term local currency IDR of 'B-'; Outlook Stable

  -- Short-term foreign and local currency IDR of 'B'

  -- National Long-term rating of 'BB-(pol)'; Outlook Stable

  -- National Short-term rating of 'B(pol)'

Senior unsecured bonds issued under PLN100m debt issuance program:

  -- Long-term rating of 'B-'
  -- National rating of 'BB-(pol)'
  -- Recovery Rating of 'RR4'


===============
P O R T U G A L
===============


LUSITANO MORTGAGES: S&P Cuts Rating on Class E Notes to 'BB-(sf)'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
Lusitano Mortgages No. 1 PLC and Lusitano Mortgages No. 2 PLC.

Specifically, S&P has:

* Lowered its ratings on Lusitano 2's class C, D, and E notes due
  to structural features in the transaction where the available
  liquidity is insufficient in some of its cash flow scenarios;

* Affirmed its ratings on Lusitano 1's class C, D, and E notes
  owing to an increase in credit enhancement;

* Kept its ratings on the class A and B notes in both transactions
  on CreditWatch negative due to its updated counterparty criteria
  and sovereign risk associated with the rating for the Republic
  of Portugal.

The rating actions in both transactions are due to a combination
of positive and negative stresses on the transactions.

As Lusitano 1 and 2 have repaid senior noteholders' principal,
both transactions have deleveraged to the current pool factors of
42% and 43%, respectively.  This has led to an increase in credit
enhancement available to the remaining outstanding classes of
notes.  In particular, credit enhancement has increased for the
'AAA' rated notes to 22.7% in December 2010 from 9.5% at closing
in Lusitano 1 and to 21.2% in February 2011 from 8.9% at closing
in Lusitano 2.

However, S&P's foreclosure forecasts for the lower rating
categories have increased for both Lusitano 1 and 2 due to
delinquent loans in the pools compared with no delinquencies at
closing.

For Lusitano 1, these increases are offset by the increase in
credit enhancement and as such S&P has affirmed the ratings on the
class C, D, and E notes.

In Lusitano 2, despite the increase in credit enhancement, the
increase in S&P's foreclosure forecasts combined with a
combination of structural features have led to the downgrades of
the class C, D, and E notes.

As per the Lusitano 2 transaction documentation, the liquidity
facility can amortize when it has reached 6% of the outstanding
note balance and can amortize at this level while no drawings on
the facility have been made.  This amortization means there is a
greater liquidity stress in S&P's "slow default" rating scenarios
in its cash flow analysis.  In contrast, the liquidity facility in
Lusitano 1 cannot amortize below EUR30 million (currently 7.1%),
according to the transaction documentation.

In addition, the principal deficiency ledger mechanism is loss-
based in Lusitano 2 compared with a mechanism based on defaults in
Lusitano 1.  Losses are not debited to the PDL as quickly as with
defaults, so when S&P run its cash flow analysis, the liquidity
stress on the transaction is longer in Lusitano 2 compared with
Lusitano 1.

This combination of factors has led to the downgrades of Lusitano
2's class C, D, and E notes.

The class A and B notes in both transactions remain on CreditWatch
negative for both sovereign and counterparty reasons.

On Dec. 7, 2010, S&P placed the class A and B notes in Lusitano 1
and 2 on CreditWatch negative due to their exposure to heightened
country risk associated with the Republic of Portugal.

Then, on Jan. 18, 2011, S&P updated the CreditWatch status of the
ratings on these classes of notes when S&P's updated counterparty
criteria became effective.

The class A and B notes in both transactions will remain on
CreditWatch negative relating to the country risk of Portugal
while the long-term sovereign issuer credit rating on the Republic
of Portugal remains on CreditWatch negative.

Regarding the exposure to heightened counterparty risk, some
existing transaction documentation may no longer satisfy S&P's
counterparty criteria.  S&P will review this documentation and
intend to resolve this element of the CreditWatch placement before
the criteria's transition date of July 18, 2011.

Lusitano Mortgages No. 1 and No. 2 are Portuguese residential
mortgage-backed securities transactions that securitize loans
originated by Banco Espiritu Santo.  The transactions closed in
December 2002 and November 2003, respectively.

                          Ratings List

                  Lusitano Mortgages No. 1 PLC
    EUR1 Billion Residential Mortgage-Backed Floating-Rate Notes

                        Ratings Affirmed

                      Class       Rating
                      -----       ------
                      C           A (sf)
                      D           BBB+ (sf)
                      E           BB+ (sf)

            Ratings Remaining on CreditWatch Negative

                 Class       Rating
                 -----       ------
                 A           AAA (sf)/Watch Neg
                 B           AA (sf)/Watch Neg

                  Lusitano Mortgages No. 2 PLC
         EUR1 Billion Mortgage-Backed Floating-Rate Notes

                         Ratings Lowered

                                Rating
                                ------
        Class       To                          From
        -----       --                          ----
        C           BBB+ (sf)                    A (sf)
        D           BB+ (sf)                     BBB (sf)
        E           BB- (sf)                     BB (sf)

            Ratings Remaining on CreditWatch Negative

                 Class       Rating
                 -----       ------
                 A           AAA (sf)/Watch Neg
                 B           AA (sf)/Watch Neg


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


BANK OF MOSCOW: London Court Freezes Goldman Sach's 3.9% Stake
--------------------------------------------------------------
Catherine Belton at The Financial Times reports that a London
arbitration court has frozen Goldman Sach's minority stake in the
Bank of Moscow.

According to the FT, people familiar with the matter said on
Thursday that the London court had frozen a 3.9% stake in the Bank
of Moscow held by Goldman Sachs after a minority shareholder close
to the bank's management filed suit questioning its acquisition by
the asset management arm of Russian state bank VTB.

The FT relates that one person familiar with the matter said the
court had held a hearing on the merits of the case, but was yet to
issue a decision.

The stake is key for pushing VTB's overall stake in the bank,
Russia's fifth-biggest by assets, above 50%, the FT states.

As reported by the Troubled Company Reporter-Europe on Feb. 24,
2011, Catherine Belton at The Financial Times said that VTB
acquired the Moscow city government's 46.5% stake in Bank of
Moscow, bringing the Russian state bank a step closer towards
winning control over the heart of a financial empire run by allies
of ousted mayor Yury Luzhkov.  VTB said on Feb. 22 it had acquired
the city hall stake together with a 25% blocking stake in city
insurer Capital Insurance Group for RUR103 billion.

AKB Bank Moskvy OAO (Bank Moskvy OAO or Bank of Moscow OJSC) --
http://www.bm.ru/-- is a Russia-based financial institution,
which offers a wide range of services to its clients including
corporate banking, retail banking and investment banking services.
The Bank operates through numerous branches.  It is a part of the
Association of Russian Banks (ARB) and other organizations.  In
addition, AKB Bank Moskvy OAO has 13 subsidiaries and two
affiliated companies.  As of May 14, 2009, the Bank was
43.99%-owned by the Moscow City Government.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on March 3,
2011, Moody's Investors Service affirmed these ratings of JSC Bank
of Moscow: long-term local and foreign currency debt and deposit
ratings of Baa2; long-term foreign currency subordinated debt
rating of Baa3; Prime-2 short-term foreign currency deposit rating
and the Bank Financial Strength Rating of D.  Moody's maintained a
negative outlook on all long-term ratings and the BFSR.


BANK OF MOSCOW: Fitch Maintains 'D' Individual Rating
-----------------------------------------------------
Fitch Ratings is maintaining Bank of Moscow's ratings, including
its 'BBB-' Long-term Issuer Default Rating on Rating Watch
Negative.

The maintained RWN reflects Fitch's view that risks remain
regarding the bank's acquisition by JSC Bank VTB ('BBB'/Stable).
However, the agency notes that the risk of BOM's Long-term IDR
being downgraded has reduced as a result of the progress VTB has
made to acquire BOM.  VTB's ratings are unlikely to be affected by
the acquisition.

Fitch placed BOM's Long-term IDR on RWN on Sept. 29, 2010,
reflecting the risk of reduced support for the bank from the City
of Moscow ('BBB'/Positive) following the dismissal of former City
mayor Yuri Luzhkov.  At the end of February 2011, VTB reportedly
acquired a direct majority stake in BOM through the purchase of a
46.48% share from the City and 3.88% from Goldman Sachs.  However,
Fitch understands that both of these transactions are subject to
actual or potential legal challenges.

In Fitch's view, the progress made by VTB in acquiring BOM means a
downgrade of BOM is less likely than when the agency initially
placed the bank on RWN.  If VTB successfully completes the
acquisition and establishes management control over BOM in the
near term, BOM's Long-term IDR will likely be affirmed, reflecting
the potential support from VTB that BOM could expect in case of
need.

However, some uncertainty remains concerning the completion of the
acquisition.  In addition, relations between VTB and BOM's
minority shareholders, which include the bank's CEO and one of his
deputies, still appear to be strained.  If VTB's acquisition is
subject to a lengthy legal challenge and/or VTB is unable to
exercise management control over BOM for an extended period, the
risk of a downgrade of BOM's Long-term IDR would increase.

In Fitch's view, such a delay with the completion of the
acquisition would also increase the risk of further asset quality
deterioration at BOM.  In an extreme scenario, if BOM's balance
sheet becomes, or turns out to be, significantly weaker than VTB's
so far limited due diligence might have suggested, Fitch would not
rule out the possibility that VTB would re-examine the case for
the acquisition.  However, this scenario does not represent
Fitch's base case at present.

The RWN on BOM's 'D' Individual rating continues to reflect the
risk that the bank's asset quality may be considerably weaker than
suggested by the low reported levels of non-performing loans, in
particular as a result of the bank's significant exposure to
companies closely associated with the previous City
administration.

VTB's 'BBB' Long-term IDRs are driven by Fitch's view of the high
probability of support for the bank from the Russian authorities.
The agency does not expect to revise this view as a result of the
BOM acquisition.  VTB's standalone financial position will likely
be moderately negatively affected by the BOM consolidation due to
downward pressure on capital ratios, while BOM's asset quality
presents potential additional downside risk.  However, the agency
views VTB's current standalone profile as relatively strong within
the 'D' Individual rating category, and therefore does not expect
any negative impact from the BOM acquisition to be sufficient to
put downward pressure on this rating.

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.

The rating actions on BOM are:

  -- Long-term foreign currency IDR: 'BBB-', maintained on RWN
  -- Short-term foreign currency IDR: 'F3', maintained on RWN
  -- National Long-term rating: 'AA+(rus)', maintained on RWN
  -- Support Rating: '2', maintained on RWN
  -- Individual Rating: 'D', maintained on RWN
  -- Senior unsecured debt: 'BBB-'/'AA+(rus)', maintained on RWN
  -- Subordinated debt: 'BB+', maintained on RWN

VTB's ratings are:

  -- Long-term foreign and local currency IDRs: 'BBB', Outlook
     Stable

  -- Short-term foreign currency IDR: 'F3'

  -- National Long-term rating: 'AAA(rus)', Outlook Stable

  -- Support Rating: '2'

  -- Support Rating Floor: 'BBB'

  -- Individual Rating: 'D'

  -- Senior unsecured debt: 'BBB'/'AAA(rus)'


BANK UNIASTRUM: Moody's Cuts Long-Term Deposit Ratings to 'Ba3'
---------------------------------------------------------------
Moody's Investors Service has downgraded the long-term global
scale local and foreign currency deposit ratings of Bank Uniastrum
to Ba3 from Ba2.  Simultaneously, Moody's affirmed the bank's E+
bank financial strength rating mapping to a Baseline Credit
Assessment of B2, and its Not Prime short-term global scale local
and foreign currency deposit ratings.  The outlook on all of
Uniastrum's long-term ratings is stable.  Concurrently, Moody's
Interfax Rating Agency has downgraded Uniastrum's National Scale
Rating to Aa3.ru from Aa2.ru.  The NSR carries no specific
outlook.

                        Ratings Rationale

According to Moody's, Uniastrum's downgrade was triggered by
Moody's recent rating action on Uniastrum's parent -- Bank of
Cyprus (BoC, which owns an 80% stake in Uniastrum) -- whereby the
parent's ratings have been downgraded to D+/Baa2/Prime-2 from C-
/A3/Prime-2.

The rating agency said that it continues to maintain an assumption
of a high probability of parental support from BoC to its Russian
subsidiary, in case of need, but this assumption now results in a
two-notch uplift of Uniastrum's long-term deposit ratings of Ba3
from the bank's BCA of B2 in accordance with Moody's Joint-Default
Analysis Methodology, as opposed to three-notch uplift previously,
due to lower BCA of the bank's parent.

Uniastrum's E+ BFSR is constrained by the material concentration
levels in the bank's corporate loan portfolio, whereby the bank's
20 largest exposures together exceed 150% of its Tier 1 capital.
The bank's asset quality also weighs on its ratings: as of 31
December 2010, 90+ days overdue loans accounted for 8.5% of the
gross loan book, while the loan loss reserve accrued under Russian
Accounting Standards as at the same date stood at just 4.6%, and
Moody's expects the YE2010 IFRS reserves to be around the same
level, thus covering only half of problem loans.

Moreover, in 2009 and 2010, Uniastrum demonstrated high growth of
the loan book - by more than 40% and 30%, respectively, year on
year.  Moody's, therefore, expects elevated provisioning needs to
materialize going forward, as the bank's rapidly augmented loan
book seasons.  These expectations raise capital adequacy concerns:
despite the fresh capital injection in the amount of US$50 million
completed in early 2010, Uniastrum's statutory capital adequacy
ratio (N1) stood at a modest 12.5% at Dec. 31, 2010, and the
rating agency believes this ratio will remain under pressure due
to potential further provisioning charges, as well as the still
significant (compared to the bank's asset size) administrative
costs relating to Uniastrum's expanded branch network.  Moody's
expects further capital support to be rendered to Uniastrum by its
parent in 2011.

At the same time, Uniastrum's stand-alone ratings are underpinned
by the bank's growing (although not yet sizeable) franchise, as
well as its wide territorial coverage in the context of Russia.
Moody's notes that Uniastrum's relatively stable customer funding
base is further complemented and strengthened by liquidity
facilities provided by the bank's parent, BoC.

Moody's assessment of Uniastrum's stand-alone credit strength is
based on the bank's audited financial statements for 2009 prepared
under IFRS, the bank's unaudited (management) IFRS accounts for
2010, as well as its 2010 monthly accounting statements prepared
under local statutory accounting rules (local GAAP).

Moody's explained that the above-mentioned rating drivers,
reflecting Uniastrum's stand-alone credit quality, are
commensurate with the bank's E+ BFSR.  The rating agency further
notes that these ratings currently have limited upward potential.
In the longer term, Moody's might consider raising Uniastrum's BCA
if there is a consistent diversification of the bank's assets and
liabilities, sustainable growth of its recurring income and
optimization of business costs combined with consistently good
asset quality and adequate capitalization levels.  Conversely,
Uniastrum's inability to manage risks stemming from the currently
volatile operating environment in Russia and fierce competition in
its business niche, if it results in a material worsening of the
bank's financial fundamentals, might exert negative pressure on
the bank's stand-alone ratings.

Moody's previous rating action on Uniastrum was on May 31, 2010,
when the rating agency affirmed the bank's Ba2 deposit ratings
(with stable outlook) and its Aa2.ru NSR.

Headquartered in Moscow, Russia, Uniastrum reported -- under local
GAAP -- total assets (unaudited) of US$2.8 billion as at
Dec. 31, 2010, and net profits of US$15.6 million for the year
then ended.


SOTSGORBANK OJSC: S&P Junks Counterparty Credit Rating From 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
long-term counterparty credit rating on Russia-based SOTSGORBANK
to 'CCC' from 'B-'.  S&P also lowered its Russia national scale
rating on the bank to 'ruB-' from 'ruBBB'.  At the same time, S&P
affirmed the short-term counterparty credit rating at 'C'.  The
outlook is negative.

"The downgrade reflects Standard & Poor's opinion regarding
SOTSGORBANK's corporate governance, including the reliability of
information the bank provides us, and an accelerating risk of
potential liquidity erosion and possible asset quality problems,"
said Standard & Poor's credit analyst Sergey Voronenko.

According to information provided by the bank's management and on
the bank's Web site, in October 2010, five Russian private
investors acquired 89.8% of the bank from its previous owners.
Subsequently, according to the public data, a new proposed CEO and
board of directors were appointed and some changes within top and
middle management were also made.  S&P's view regarding the bank's
corporate governance is underpinned by the continuing delay in
regulatory approval by the Central Bank of Russia of the new
proposed CEO and completion of a strategic review by the bank.  In
addition, S&P believes that the quality of the information the
bank provides us has decreased.

Furthermore, in S&P's view, SOTSGORBANK's funding and liquidity
could face potential short-term strain from restricted retail
deposit taking activity and from negative market noise regarding
the bank's corporate governance.  In S&P's opinion, this adds to
diminishing financial flexibility inherent in the already
decreasing availability of cash resources.

In January 2011, SOTSGORBANK reported a ratio of nonperforming
loans of about 10% of the gross loan portfolio.  However, given
S&P's view on the worsening quality of information and the bank's
current corporate governance, S&P sees a risk that these asset
quality metrics may underestimate the actual level of problematic
assets.

At the 'CCC' level, S&P's long-term rating now reflects its view
of a heightened liquidity risk in particular, which S&P believes
might accelerate due to corporate governance and potential asset
quality issues.  It also reflects S&P's view of a high level of
sector risks, limited diversity, and weak profitability.  S&P
considers these negative factors to be only partly mitigated by
adequate capitalization.  If asset quality should decrease, it
could negatively affect S&P's assessment of SOTSGORBANK'S credit
quality.

The ratings incorporate SOTSGORBANK's stand-alone credit profile
and do not include any uplift for extraordinary external support,
either from the shareholders or the government.

The negative outlook reflects the uncertainty S&P perceive about
the bank's ability to sustain its liquidity standing in the near
term (up to one year).

"S&P could lower the ratings further if the bank is unable to
increase its liquid resources and S&P's is not confident that the
risk of liquidity drain is abating," said Mr. Voronenko.

S&P will assess the actions management may take to tackle the
bank's liquidity risk, and the sustainability of improvements that
may arise from these actions.

All else being equal, S&P could revise the outlook to stable if
S&P received timely, comprehensive, reliable, and transparent
information, along with evidence of improved governance practices
and signs that the risk of accelerating liquidity risk is
reducing.

Standard & Poor's could suspend all its ratings on SOTSGORBANK if
S&P fail to receive sufficient, timely, reliable information from
the bank.


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


FINANCIACION BANESTO: S&P Puts 'BB' Rating on CreditWatch Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch negative
its credit ratings on Financiacion Banesto 1, Fondo de
Titulizacion de Activos' class A, B, and C notes.

Based on the latest investor reports, the transaction experienced
a rapid increase in defaulted loans during 2010.  The transaction
defines defaults as loans being delinquent for more than 12
months.  The level of defaulted assets is now 3.87% of the closing
portfolio balance versus a level of 3.13% in January 2010.

While the increase in the level of cumulative defaults hasn't
reached the most junior class' interest deferral trigger (set at
7%), S&P has observed a weakening of the structural features.
Since January 2010, the reserve fund has been fully depleted due
to the rising default levels.  Also from January 2010 the
transaction has been exposed to class C principal deficiencies.
These features have lowered the level of credit enhancement
available to the rated notes.

Equally, while the evolution of delinquencies is now stabilizing,
S&P's is concerned that this could be associated with a rapid
transition of severe delinquencies into defaulted loans.

S&P will monitor any steps taken by the servicer to address this
credit risk and S&P will conduct a credit and cash flow analysis
to assess whether the ratings on the class A, B, and C notes are
appropriate.  S&P intends to resolve the CreditWatch placements
following this analysis.

The transaction closed in June 2007, with the collateral backing
this transaction comprising a portfolio of Spanish consumer loans
originated by Banco Espanol de Credito, S.A.  (Banesto).  The
transaction documents intended for it to revolve for two years
from closing, but the replenishment period stopped early due to a
delinquency trigger breach.

                          Ratings List

    Financiacion Banesto 1, Fondo de Titulizacion de Activos
          EUR800 Million Asset-Backed Floating-Rate Notes

             Ratings Placed on CreditWatch Negative

                             Rating
                             ------
         Class      To                        From
         -----      --                        ----
         A          AA (sf)/Watch Neg          AA (sf)
         B          BBB+ (sf)/Watch Neg        BBB+ (sf)
         C          BB (sf)/Watch Neg          BB (sf)


IM BANKOA: Moody's Assigns 'Ba2 (sf)' Rating on Class C Notes
-------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to the
notes issued by IM Bankoa MBS 1 FTA:

  -- EUR492.9M A Notes, Definitive Rating Assigned Aaa (sf)
  -- EUR21.2M B Notes, Definitive Rating Assigned A3 (sf)
  -- EUR15.9M C Notes, Definitive Rating Assigned Ba2 (sf)

                        Ratings Rationale

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, from which Moody's determined
the MILAN Aaa Credit Enhancement and the portfolio expected loss.

Moody's analyzed the portfolio based upon two sub-pools factoring
the debtor characteristics (individuals & SME).  For the SME
subpool (9.8% of the outstanding pool), Moody's derived its
default distribution using its ABS SME approach, based on the
default probability contribution of each single borrower, and the
correlation among the different industries represented in the
portfolio.  For the RMBS subpool, Moody's ran its MILAN analysis
for RMBS.  Moody's combined the loss distributions for the
subpools in its cashflow analysis assuming 100% correlation
between both pools.

The expected portfolio loss of 4.4% of the current portfolio
balance and the MILAN Aaa Credit Enhancement of 15.0% served as
input parameters for Moody's cash flow model, which was based on a
probabilistic lognormal distribution as described in the report
"The Lognormal Method Applied to ABS Analysis", published in
September 2000.

The key drivers for the MILAN Aaa Credit Enhancement number, which
is higher than MILAN Aaa Credit Enhancement in Spanish RMBS
transactions, are (i) 9.8% of the portfolio are loans granted to
SMEs, (ii) the relatively low pool granularity, with the top 20
borrowers representing 6.0% of the portfolio, (iii) non
residential properties represent 11.1% of the portfolio and (iv)
the very high concentration in the Basque Country region (86.6%).

The key drivers for the portfolio expected loss which is in line
with similar transactions are (i) the performance of mortgage
loans granted to individuals and SMEs in the sellers' book, and
(ii) the expected higher volatility on non residential property
prices.  The assumed expected loss corresponds to an assumption of
approximately 12.5% cumulative default rate in the portfolio.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes.  In Moody's opinion, the
structure allows for timely payment of interest and principal with
respect of the notes by the legal final maturity.  Moody's ratings
only address the credit risk associated with the transaction.
Other non-credit risks have not been addressed, but may have a
significant effect on yield to investors.

The transaction closed in June 2009 and was initially not rated by
Moody's.  The initial amount of the Class A notes issued at
closing was EUR492.9 million.  The outstanding Class A balance as
of the last payment date in December 2010 is approximately EUR430.

The Reserve Fund was initially funded at 5.0% of the portfolio
amount as of closing.  The Reserve Fund is currently funded at
5.7% of the total notes outstanding (100% of its target level) and
may start to amortize three years after closing (18 months from
now) to 10.0% of the outstanding balance of the notes, subject to
performance conditions.  The total credit enhancement, excluding
excess spread, for the Class A notes is currently 13.7%.

The notes are backed by a pool of prime Spanish mortgages granted
to individuals (90.2%) and SMEs (9.8%) by Bankoa (A1, Prime-1).
The properties are mainly residential (88.9%), with the remaining
part being commercial properties.  As of 31 December 2010 the
mortgage pool balance consists of approximately EUR 460.5 million.

The V Score for this transaction is Medium, which is in line with
the score assigned for the Spanish RMBS sector.  The V Score was
negatively impacted by the exposure of this transaction to SMEs.
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
"V-Scores and Parameter Sensitivities in the Major EMEA RMBS
Sectors" published in April 2009.

Moody's Parameter Sensitivities: At the time the rating was
assigned, the model output indicated that Class A notes would have
achieved a Aaa even if the expected loss was as high as 6.6% and
the MILAN Aaa CE as high as 18.0% and all other factors were
constant.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.  The
analysis assumes that the deal has not aged and is not intended to
measure how the rating of the security might migrate over time,
but rather how the initial rating of the security might have
differed if key rating input parameters were varied.  Parameter
Sensitivities for the typical EMEA RMBS transaction are calculated
by stressing key variable inputs in Moody's primary rating model.

Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or
financial instruments in this transaction.


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


CPW ACQUISITION: U.S. Court Won't Hear Dispute Over Fortress Fees
-----------------------------------------------------------------
CPW Acquisition Corp. objects to compensation and reimbursement of
expenses paid to Dewey & LeBouef, LLP, and Arnold & Porter, LLP,
as counsel to Fortress Credit Corp., and seeks remittance of those
fees to the estate.  CPW submits that US$301,216 of the legal
fees, which have been paid out of proceeds from the sale of
property in London, England, are objectionable.

Fortress contends that the Bankruptcy Court lacks jurisdiction
over the proceeds from the sale of the London Property.

Chief Bankruptcy Judge Arthur J. Gonzalez held that when Fortress
filed a claim against the estate, it conferred "core" jurisdiction
on the Bankruptcy Court.  Nevertheless, Judge Gonzalez said, the
Bankruptcy Court also recognizes that in "certain international
disputes the prudent and just action for a federal court is to
abstain from the exercise of jurisdiction," citing In re Regus
Business Centre Corp., 301 B.R. at 128 (citing Turner
Entertainment Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518 (11th
Cir. 1994)).  Judge Gonzalez concluded that the Bankruptcy Court
will exercise its discretion to abstain from deciding the
objections under the permissive abstention doctrine of 28 U.S.C.
Sec. 1334(c)(1). Therefore, CPW's Motion Objecting to Compensation
and Reimbursement of Expenses Paid to Dewey & Lebouef LLP and
Arnold & Porter LLP as Counsel to Fortress Credit Corp. is denied
without prejudice for the Debtor to bring an appropriate claim
consistent with the Court's opinion.

A copy of the Court's March 3, 2011 Opinion is available at
http://is.gd/5rr8flfrom Leagle.com.

Attorneys for CPW Acquisition Corp. are:

          Sanford P. Rosen, Esq.
          Jeffrey S. Davis, Esq.
          ROSEN & ASSOCIATES, P.C.
          747 Third Avenue
          New York, NY 10017-2803
          Telephone: (212) 223-1100
          Facsimile: (212) 223-1102
          E-mail: srosen@rosenpc.com
                  jdavis@rosenpc.com

Counsel for Fortress Credit Corp. is:

          Lisa Hill Fenning, Esq.
          ARNOLD & PORTER LLP.
          44th Floor
          777 South Figueroa Street
          Los Angeles, CA 90017-5844
          Telephone: 213-243-4019
          Facsimile: 213-243-4199
          E-mail: Lisa.Fenning@aporter.com

CPW Acquisition Corp. and its affiliate, Robert Lane Estates, Inc.
each commenced a voluntary chapter 11 case (Bankr. S.D.N.Y. Case
Nos. 08-14623 and 08-14625) on Nov. 20, 2008, represented by
Sanford P. Rosen, Esq., and Jeffrey S. Davis, Esq., at Sanford P.
Rosen & Associates, P.C.  The Robert Lane case was dismissed by
Court order dated Nov. 24, 2009.  Robert Lane listed US$1 million
to US$10 million in both assets and debts.


GEMINI PLC: S&P Downgrades Rating on Class E Notes to 'D'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CCC
(sf)' its credit rating on GEMINI (ECLIPSE 2006-3) PLC's class E
notes.

GEMINI is a single-borrower secured-loan transaction backed by a
portfolio of what S&P considers average-quality retail, office,
warehouse/industrial, and leisure properties in England and
Scotland.  As a result of tenant lease breaks and insolvencies,
cash flow generated by the portfolio has declined; since the
October 2009 interest payment date, the issuer has been required
to draw on a liquidity facility provided by Danske Bank A/S
(A/Negative/A-1), to fund the shortfall in interest due under the
loan.  Total drawings under the liquidity facility now amount to
approximately GBP11.1 million.

As a result, liquidity fees (which comprise the liquidity
commitment fee, and interest on liquidity drawings) have
accumulated.  Specifically, total fees payable to the liquidity
facility provider have increased to approximately GBP133,000 on
the January 2011 IPD, from approximately GBP75,000 on the January
2010 IPD.

In this transaction, the liquidity facility can be drawn on to
fund a shortfall in interest paid under the loan, but cannot be
drawn on for interest accrued on liquidity drawings.  In addition
to the fees payable to the liquidity facility provider on the
January 2011 IPD, annual third-party fees totaling approximately
50,000 were charged to the issuer.  Together, the liquidity
facility provider fees and annual third-party fees caused an
interest shortfall on the class E notes.

S&P understands that the special servicer, CB Richard Ellis Loan
Servicing Ltd., continues to implement an asset management
strategy that aims to improve portfolio cash flow generation over
the medium term.  In the meantime, however, S&P expects that the
liquidity facility will continue to be drawn on to fund shortfalls
in interest payable under the loan.  As such, S&P expects the fees
payable to the liquidity facility provider to accumulate, and in
instances where other fees become due--such as the annual third-
party fees paid on the January 2011 IPD--S&P believes interest
shortfalls on the class E notes could recur.

In S&P's view, absent a significant deterioration in portfolio
income, it is possible that the shortfall on the class E notes
will be repaid on the next IPD and that a further shortfall may
not recur on the next few IPDs.  Nonetheless, in view of the
accumulation of interest on liquidity facility drawings and
annually charged third-party fees, S&P expects interest shortfalls
to occur on this class of notes again.  Furthermore, S&P believes
that full principal recovery of this class of notes is unlikely.
Accordingly, S&P has lowered the rating on the class E notes to 'D
(sf)'.


M&K: Goes Into Administration, Harboro Hotel Still in Business
--------------------------------------------------------------
Insider Media Limited reports that the Harboro Hotel in Melton,
Mowbray has said it is still open for business, despite its
operating company, M&K Cotton, entering administration.  Chris
Stevens and Ian Vickers, partners at insolvency firm FRP Advisory
LLP, were appointed joint administrators to M&K Cotton late last
month.

The company was placed into administration following financial
difficulties, said the administrators, according to Insider Media
Limited.  The report relates FRF Advisory said it is also
conducting an extensive marketing campaign for the sale of the
business.

"Trading is ongoing and the hotel and restaurant are continuing to
welcome guests as usual, with no plans to close.  Meanwhile, we
are hopeful of finding a purchaser in the near future, to protect
the business and its employees," Insider Media Limited quotes Mr.
Stevens as saying.

M&K Cotton operates both The Harboro Hotel in Melton Mowbray and
Sandpipers Hotel in the Isle of Wight.


PETER & SCOTT: 117 Former Workers Get Compensation
--------------------------------------------------
Steven Vass at Herald Scotland reports that more than 100 former
employees of Peter Scott & Co. have been awarded compensation
totaling more than GBP350,000 for illegally being made redundant.

Herald Scotland relates that an employment tribunal in Edinburgh
has decided that the 117 former staff were entitled to
compensation after the firm summoned them to its factories in
Hawick and Kelso last year to be told that they were being made
redundant with immediate effect.

Employment judge Joseph D'Inverno awarded every worker the
statutory maximum of 90 days' pay, although they will each only
receive 40 days at up to GBP380 a week because the firm went into
administration before being bought by South Korean Gloverall last
summer, Herald Scotland discloses.

According to Herald Scotland, the judge found that the company
should have entered into a 90-day consultation with the workforce,
rejecting arguments that it had no choice because takeover
negotiations with an unnamed Korean suitor had collapsed at the
last minute.  He said management had been aware of difficulties
for several years and had done nothing to reduce costs, Herald
Scotland notes.  In addition, the banks would not lend the firm
money, Herald Scotland states.

The case was brought on behalf of the workers by the GMB union and
Citizens Advice Bureau (CAB), Herald Scotland discloses.

Peter Scott & Co. is a Borders-based knitwear firm.


PRESBYTERIAN MUTUAL: Church Seeks Ruling on Bail-Out Donation
-------------------------------------------------------------
BBC News reports that The Presbyterian Church is seeking a High
Court ruling to allow it to donate to the Presbyterian Mutual
Society (PMS) bail-out.

According to BBC, the church has agreed to contribute at least
GBP1 million to a fund established by the Government to rescue PMS
savers.

Nearly 10,000 Presbyterians lost access to their savings when the
PMS was forced into administration in 2008, BBC recounts.

BBC says, to protect against a legal challenge, the church needs
the court to state the donation is a lawful use of its funds.  As
the church is a charity, its funds can only be used for charitable
purposes, BBC states.  There is potential doubt about whether the
bail-out donation meets that legal definition, according to BBC.
However, there is a provision of the Charities Act which allows a
court to make an order in connection with the administration of
any charity, BBC notes.

The case is listed for hearing at the High Court in Belfast today,
BBC discloses.

As reported by the Troubled Company Reporter-Europe, the Financial
Times said the society had assets of around EUR300 million when it
was forced into administration in 2008 after suffering a run of
withdrawals at the onset of the global financial crisis.

Presbyterian Mutual Society is based in Belfast, Northern Ireland.


RETALLACK RESORT: Goes Into Administration
------------------------------------------
Business Cornwall reports that Simon Girling and Tony Nygate of
BDO LLP in Bristol have been appointed Joint Administrators of
Retallack Resort & Spa and are currently managing all aspects the
company's affairs following the fall its fall into administration.

"Like everyone in the industry we have been facing a number of
challenges with the current recession, however as a company we are
determined to meet this all head on, hence us asking BDO to act as
administrators to give the breathing space to take the business
forward," Business Cornwall quotes Retallack Resort Director Amy
Keyter as saying.

Joint administrator Simon Girling commented: "I can confirm that
we are working with the Retallack team and the focus of our
actions is to make sure the business is in strong and efficient
shape and for us to work together to plan the most successful
future for the business.  No immediate decisions have been made
and as Amy and Jason Keyter have said, the resort and its
facilities are in full operation and with the support of the
Resort's staff it is all business as usual," according to Business
Cornwall.

Retallack Resort & Spa is a North Cornwall-based luxury self
catering holiday specialist.


W A HILLS: Falls Into Administration on Cash Flow Problems
----------------------------------------------------------
W A Hills Limited was placed into administration on Feb. 14 2011,
following cash flow difficulties arising from contractual
disputes, delays in receipt of debtor monies, and adverse trading
conditions.

Jeremy French and Glyn Mummery, partners at FRP Advisory LLP, the
national specialist restructuring, recovery and insolvency firm
with offices in Hornchurch, Essex, were appointed Joint
Administrators.

Glyn Mummery provided the following comment: "Unfortunately, it
was not viable to trade on the business due to a lack of existing
contracts and, more critically, an absence of sufficient funding
compounded by existing debtors not settling outstanding and
overdue accounts.  Regrettably, we therefore had to close the
business immediately and make 20 staff redundant.

W A Hills Limited is a building and joinery business based in
Essex.


* UK: Eurosail Court Ruling Limits Balance Sheet Insolvency
-----------------------------------------------------------
According to The Financial Times' Jennifer Hughes, lawyers have
claimed that a court has rejected a "mechanical" definition of
balance sheet insolvency in a ruling that could deter creditors
from using this route to push struggling companies into collapse.

The FT relates that on Monday the Court of Appeal upheld a lower-
court ruling against bondholders in a Lehman Brothers mortgage-
backed securitization deal known as Eurosail-UK 2007-3BL.

The ruling was being closely followed by securitization experts
but lawyers said its greater significance was its interpretation
of balance sheet insolvency, one of the rarer tests by which a
company can be deemed bust, the FT notes.

According to the FT, although most companies become insolvent
because of their inability to meet debts as they come due -- cash
flow insolvency -- the law also allows for a "balance sheet test"
of whether current assets are outweighed by existing and future
liabilities.

However, Monday's decision essentially ruled out reducing that
test to a straightforward summation of a company's books, the FT
states.

Lord Neuberger, sitting with Lord Toulson and Lord Wilson, as
cited by the FT, said the balance sheet test did not amount to "a
wholly new, relatively mechanical assets-based, basis for seeking
to wind up a company".  The FT notes that he instead said it could
only be used for a company that had reached "the end of the road",
adding "imprecise, judgment-based and fact-specific as such a test
may be".

Alan Newton, global head of the finance practice at Freshfields,
said the decision made clear the limits of balance sheet
insolvency, according to the FT.

"It's a high hurdle to get over," the FT quotes Mr. Newton as
saying.  "It's very different from simply saying it can be based
on some calculation, or even just on audited accounts."

The case on which the decision was based was originally brought
last year by a group of Eurosail bondholders who claimed the
vehicle housing their deal was balance sheet insolvent, the FT
recounts.


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


* EUROPE: More Robust Bank Stress Test Process Planned
------------------------------------------------------
Patrick Jenkins and Brooke Masters at The Financial Times report
that European banking regulators are preparing to introduce a
"near fail" category into the new stress test process as part of a
mechanism to force recapitalizations on weaker banks.

The European bank stress tests of a year ago saw all but seven of
the 91 banks in the exercise pass a 6% tier one capital threshold,
a measure of financial strength, the FT recounts.  But their
credibility was called into question when two Irish banks that had
passed the test had to be bailed out only four months later, the
FT discloses.

According to the FT, this time, the tests, being administered by
the new European Banking Authority, which replaced the Committee
of European Banking Supervisors, will be designed to be more
robust.

The FT relates that the EBA said last week that it planned to test
the banks against both a baseline and an extremely negative
macroeconomic situation, as well as country-specific shocks on
property prices, interest rates and government borrowing.

Details of those scenarios, and the methodology by which they will
be applied, are to be made public in coming weeks, following
discussions with the banks and national regulators, the FT notes.
The actual testing is due to begin next month, with the results
set to be made public in June, the FT says.


* Moody's: Credit Insurers' Profits to Remain Constrained
---------------------------------------------------------
The challenging economic environment and relaxed underwriting
discipline will constrain credit insurers' profitability in
2011, says Moody's Investors Service in a new Special Comment on
European Credit Insurance.  Credit insurers also have to prepare
for Solvency II, which is expected to drive an increased focus on
capital management and an increased demand for reinsurance.

Despite a recovery in loss ratios in 2010, the earnings potential
of credit insurers has been impacted by the financial crisis.
Both sluggish economic growth and the potential for increased
levels of self-insurance in reaction to the tightening of
underwriting implemented during the crisis will serve to constrain
credit insurers' revenue going forward.

"The recovery in loss ratios reported in 2010 is unsustainable, as
insurers have started to relax their underwriting discipline in
order to stimulate demand and mitigate pressures on revenue,"
notes Benjamin Serra, a Moody's Assistant Vice President-Analyst
and author of the report.  "Moreover, the fragile and uneven
economic outlook also exposes credit insurers to large claims and
potential local crises."

Moreover, Moody's notes that in the short term, low financial and
reinsurance results will also constrain credit insurers'
profitability.

Reserves development and costs management will be important
drivers of future profitability, and these factors may vary
amongst industry participants.

Moody's also notes the challenges presented by Solvency II.
"Although legislation is not yet finalized, QIS 5 specifications
suggest that regulatory capital requirements for credit insurers
are likely to rise," notes Mr. Serra.  "This is a challenge for
the industry, which itself has just recovered from the crisis and
is expected to drive an increased focus on capital management in
the coming years."

Moody's report, entitled "European Credit Insurance: A Cycle Is
Ending, The Sector Has to Adapt to a New Era", is available on
http://www.moodys.com/


                            *********

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

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

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

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


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Psyche A. Castillon, Julie Anne G. Lopez,
Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman,
Editors.

Copyright 2011.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


                 * * * End of Transmission * * *