TCREUR_Public/111012.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, October 12, 2011, Vol. 12, No. 202

                            Headlines



B E L G I U M

DEXIA SA: Cleary, et al., Take Advisory Role on State Rescue


D E N M A R K

FIH ERHVERVSBANK: Moody's Lowers Debt & Deposit Ratings to 'B1'


G E R M A N Y

PHORMS BERLIN: S&P Withdraws 'B' Local Currency Short-term Rating


G R E E C E

PROTON BANK: Greece Activates Bank Rescue Fund to Save Proton
YIOULA GLASSWORKS: S&P Lowers Corporate Credit Rating to 'SD'
* Greek Econ Min: Situation 'Pretty Hopeless' But No Default


I R E L A N D

ANGLO IRISH: Sale of UK & Irish Loan Books Stalls
VERSAILLES CLO: Moody's Raises Rating on Class E Notes to 'Ba3'
* IRELAND: NAMA Puts Two Loan Portfolios Up for Sale


K A Z A K H S T A N

BMB MUNAI: Deregisters Convertible Senior Notes Due 2012


L U X E M B O U R G

DEXIA BANQUE: Fitch Puts 'CC' Rating on Hybrid Securities on RWN
HARVEST CLO: Moody's Raises Ratings on Two Note Classes to 'B1'
ORCO PROPERTY: Expects to Sell Sky Office Tower by Year-End


N E T H E R L A N D S

GREEN LION: Moody's Assigns 'Ba1' Rating to EUR176.4-Mil. Notes


P O R T U G A L

* PORTUGAL: Moody's Downgrades BFSRs of Four Banks
* PORTUGAL: Moody's Downgrades Multiple Covered Bond Ratings


R U S S I A

OTP BANK: Fitch Affirms Issuer Default Rating at 'BB'
* KARELIA REPUBLIC: Fitch Affirms 'BB-' Long-Term Currency Rating
* ULYANOVSK REGION: Fitch Affirms BB- Long-Term Currency Ratings


S P A I N

AYT NOVACAIXAGALICIA: DBRS Assigns 'BB' Rating on Series B Notes
BBVA-4 FTPYME: Fitch Affirms 'CCC' Rating on Class C Notes
BBVA HIPOTECARIO: Fitch Affirms 'BBsf' Rating on EUR14.3MM Notes
HIPOCAT: Fitch Keeps 'Csf' Ratings on Two Note Classes
TDA 27: S&P Lowers Rating on Class D Notes to 'D (sf)'

THOMAS COOK: Strike Ballot Raises Further Debt Covenant Woes
* SPAIN: Moody's Reviews Notes Issued by Seven RMBS for Downgrade
* Fitch Says Spain Rating Cut Won't Hit Non-Financial Corporates


S W E D E N

FERROMET: Restructuring Deadline Extended Until End of November
NOBINA: Moody's Changes Outlook on 'B2' Rating to Negative


U N I T E D   K I N G D O M

HEX HOLDINGS: Movac Group Acquires Firm Out of Administration
MAN GROUP: Moody's Affirms (P)Ba1 Rating on US$300-Bil. Notes
MAN GROUP: Fitch Affirms Hybrid Debt Rating at 'BB+'
NORTEL NETWORKS: Prepares to Battle U.K., Irish, French Units
PINDAR PRESTON: Equipment Sale Raises GBP2 Million

PT MCWILLIAMS: In Administration, Seeks Deal With Creditors
SILVER STAR: Goes Into Administration, Cuts 12 Jobs
* Lloyds Shortlists Buyers for U.K. Commercial Property Loans


X X X X X X X X

* EUROPE: Debt-Crisis Summit Postponed to October 23
* EUROPE: ECB Supports Guarantee Option to Leverage Bailout Fund
* European Union Steps Up Response to Escalating Debt Crisis




                            *********


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B E L G I U M
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DEXIA SA: Cleary, et al., Take Advisory Role on State Rescue
------------------------------------------------------------
Suzi Ring at Legal Week reports that Cleary Gottlieb Steen &
Hamilton, LLP; Stibbe; Linklaters LLP; Clifford Chance (CC); and
Belgian firm Liedekerke Wolters Waelbroeck & Kirkpatrick are among
a raft of firms to have picked up roles on the state rescue of
Dexia bank in Belgium.

Cleary is advising Dexia, which on Monday confirmed that its
Belgian operations would be bought by the Belgian government for
EUR4 billion (GBP3.5 billion), while the Belgian, Luxembourg and
French states will guarantee a further EUR90 billion (GBP78.4
billion) to secure borrowing over the next 10 years, Legal Week
discloses.  The bank also intends to sell its Luxembourg
operations to investors, Legal Week notes.

Brussels capital markets partner Laurent Legein is leading
Cleary's team for Dexia, reprising the role he played in 2008 when
Dexia received a EUR6.4 billion (GBP5.6 billion) injection from
the Benelux governments, Legal Week says.

A team from Linklaters' Brussels and Paris offices is advising the
Caisse des Depots et Consignations as the majority shareholder in
Dexia, Legal Week notes.

Liedekerke is advising Societe Federale de Participations
Industrielles, which owns the government's stake in Dexia, led by
corporate partner Thierry Tilquin, Legal Week states.

Meanwhile, in relation to the state guarantees, CC is advising the
Belgian ministry of finance led by Brussels banking and finance
partner Yves Herinckx, while Herbert Smith alliance firm Stibbe is
acting for the Belgian Government and the National Bank of
Belgium, fielding a team comprising corporate finance partner Marc
Fyon, capital markets partner Jan Peeters and finance partner Ivan
Peeters, according to Legal Week.

Bredin Prat is advising the French state with a team led by
corporate partner Patrick Dziewolski alongside competition partner
Olivier Billard, Legal Week discloses.

Dexia SA -- http://www.dexia.com/-- is a Belgian-based bank and
insurance carrier that focuses on Public and Wholesale Banking,
providing local public finance actors with banking and financial
solutions, and on Retail and Commercial Banking in Europe, mainly
Belgium, France, Luxembourg and Turkey.


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


FIH ERHVERVSBANK: Moody's Lowers Debt & Deposit Ratings to 'B1'
---------------------------------------------------------------
Moody's Investors Service has downgraded FIH Erhvervsbank A/S's
long-term debt and deposit ratings to B1 from Ba2 and the
standalone bank financial strength rating (BFSR) to E+ (mapping to
B2 on the long-term scale) from D- (Ba3). The bank's junior
subordinated debt ratings have been downgraded to B3(hyb) from B1
(hyb), and the outlook for all the ratings is negative. The Not
Prime short-term ratings, and the Aaa rating on FIH's government
guaranteed debt issues are unaffected by this rating action.

The downgrade concludes Moody's review of FIH's ratings that was
initiated on August 8, 2011, reflecting increased concerns about
FIH's funding following an estimated DKK730 million of losses
related to its indirect investment in Danish jewellery company,
Pandora.

Following the downgrade, FIH's B1 debt and deposit ratings will
continue to benefit from one notch of rating uplift from the B2
standalone credit strength. The rating uplift reflects the
probability of support from its owners, in particular the largest
owner Arbejdsmarkedets Tillaegspension's (ATP, unrated).

RATINGS RATIONALE

The downgrade reflects Moody's increased concerns on the
successful implementation of FIH's plans to address the bank's
funding needs in the coming years, with more than DKK50 billion
(over 50% of its total funding), including government-guaranteed
debt, maturing in 2011-2013. The downgrade follows the
announcement in August of approximately DKK730 million of losses
related to the sharp decline in Pandora's share price -- one of
FIH's indirect investments -- and the consequent impact on FIH's
capitalization.

In Moody's opinion, the loss related to Pandora will add to the
difficulties that FIH already faces in the refinancing of upcoming
debt maturities, which was the main driver of the negative outlook
assigned on June 13, 2011. These difficulties include Moody's
concerns that the means by which FIH plans to reduce its
refinancing burden are problematic, for example by reducing the
loan book, where FIH's clients will also face refinancing
problems, or increasing the bank's deposit base, when competition
is increasing in the Danish deposit market.

The negative effect of Bank Package III-- the resolution
legislation under which Danish senior debt and deposits have been
allowed to take losses -- on Danish bank funding adds further to
FIH's challenges, specifically given FIH's substantial refinancing
need.

In addition to these funding pressures, Moody's notes that FIH
continues to face some intrinsic challenges. Two principal
difficulties are (i) FIH's large industry concentration in
commercial real estate (32% of total lending as of year-end 2010),
a sector that has been severely affected by the economic downturn;
and (ii) FIH's asset quality. Its problem-loan ratio -- including
non-defaulted commitments with an objective indication of
impairment -- increased further in H1 2011 to 16.6% of gross loans
from 14.6% at year-end 2010.

Offsetting this to some degree, as per H1 2011, FIH had a solvency
ratio of 16.2%, and a core Tier 1 ratio of 14.5%, compared with an
individual solvency requirement of 10.2%. FIH has indicated that
on a standalone basis, the estimated Q3 losses of DKK430 million
related to Pandora will negatively affect the solvency ratio by
approximately 0.7 percentage points. However, Moody's notes that
Pandora's share price has fallen somewhat further, since these
indications were provided.

Headquartered in Copenhagen, Denmark, FIH Erhvervsbank reported
total consolidated assets of DKK81.5 billion (EUR10.9 billion) at
end-June 2011.

METHODOLOGIES USED

The methodologies used in this rating were Incorporation of Joint-
Default Analysis into Moody's Bank Ratings: A Refined Methodology
published in March 2007, and Bank Financial Strength Ratings:
Global Methodology published in February 2007.


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G E R M A N Y
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PHORMS BERLIN: S&P Withdraws 'B' Local Currency Short-term Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services corrected an administrative
error by withdrawing its 'B' local currency short-term rating on
PHORMS Berlin gGmbH.

"The error occurred when we affirmed and withdrew our counterparty
credit ratings on the entity at the issuer's request on Dec. 18,
2009, but did not withdraw the local currency short-term rating.
(see 'Private School Operator PHORMS Berlin gGmbH 'B-' Rating
Affirmed Then Withdrawn At The Issuer's Request'). We have not
performed surveillance on the rating since December 2009," S&P
related.

The release corrects this error.


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


PROTON BANK: Greece Activates Bank Rescue Fund to Save Proton
-------------------------------------------------------------
Maria Petrakis at Bloomberg News reports that Greece's central
bank activated a rescue fund set up under an EU-led bailout in May
2010 to restructure Proton Bank SA, with the Hellenic Financial
Stability Fund becoming its sole shareholder.

Athens-based Proton will reorganize into a new lender called New
Proton Bank, which will have a 10.6% capital adequacy ratio,
according to an e-mailed statement from the Greek Finance Ministry
obtained by Bloomberg.  A separate Bank of Greece (TELL) statement
said the capital adequacy was well above regulatory thresholds,
the report notes.

"The Financial Stability Fund provided the necessary capital for
the 'good bank' and became its sole shareholder," Bloomberg cited
the central bank as saying.  "The deposits of all customers are
secured and the smooth continuation of business is guaranteed
through the new bank."

According to Bloomberg, it was the first rescue under the Greek
fund, which received EUR10 billion (US$13.5 billion) as part of
the EUR110 billion EU-led bailout, designed to provide capital and
ensure the stability of the banking system.  Proton Bank, with
assets of EUR3.5 billion, has been buffeted by the debt crisis,
combined with an investigation into possible money laundering,
Bloomberg relays.

Shares in Proton Bank were suspended from trading from October 10
on the Athens bourse, after a request from the securities
regulator. The stock has fallen 74% so far this year for a market
value of 11.3 million euros, Bloomberg says.

The central bank said that the old Proton bank, which had its
license revoked, has been placed into liquidation with the
proceeds to be used to cover the claims of third parties.  The
shareholders will rank last as claimants, Bloomberg adds.

                          About Proton Bank

Headquartered in Athens, Greece, Proton Bank S.A. (ATH:PRO) --
https://www.proton.gr/ -- is a developing bank, providing
integrated financial services.  The Bank provides private and
corporate banking, investment banking, financial services,
portfolio management, insurance and other services.  The Bank
has 32 branches across Greece. Its subsidiaries are Omega
Brokerage SA, Proton Mutual Funds SA, First Global Brokers S.A.
and Intellectron Systems SA.


YIOULA GLASSWORKS: S&P Lowers Corporate Credit Rating to 'SD'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Greece-based glass container manufacturer Yioula
Glassworks S.A. (Yioula) to 'SD' (selective default) from 'CCC+'.

"At the same time, we lowered our issue rating on Yioula's senior
unsecured notes to 'CC' from 'CCC'," S&P said.

"The downgrades follow Yioula's failure to finalize the
refinancing of its EUR15 million loan from Piraeus Bank S.A.
(Piraeus; CCC/Negative/C) before the loan's maturity on Sept. 26,
2011. We understand that the loan has matured but has not been
repaid. So far, Piraeus has not recalled it, as negotiations
surrounding a possible refinancing continue. However, Piraeus
could recall the loan at any time. Yioula did not repay the loan's
principal upon its maturity on Sept. 26, 2011. Under our criteria,
this constitutes a payment default," S&P stated.

"We assess Yioula's liquidity as weak under our criteria, due to
the group's low cash balance and immediate refinancing needs,
which are dependent on external funding from strained financial
markets in Greece. As of June 30, 2011, Yioula reported total debt
of about EUR296 million. Prospects for significant free operating
cash flow generation remain limited, in our view, due to Yioula's
heavy capital intensity, which exacerbates the group's dependence
on external funding," S&P related.

"As of the end of June 2011, Yioula had about EUR17 million of
undrawn credit lines under short-term revolving credit facilities
totaling about EUR88 million, as well as cash of about EUR2
million. In our opinion, these sources of liquidity should be
sufficient to meet short-term operating needs, provided that the
group continues to successfully renew its credit lines. However,
as Yioula's Piraeus loan has not been extended, we believe that
these liquidity sources will be insufficient to cover uses
(capital expenditures, working capital, interest, and debt
repayments) over the next 12 months," S&P said.

Management has stated that a term sheet has been drawn up to
extend the EUR15 million Piraeus loan to June 2015 on an
amortizing basis, but this extension is not yet finalized. "We
consider that successful late refinancing negotiations are not
unusual for Yioula. However, as the bank loan's maturity date has
now passed, there is a significant risk that it will not be
extended at all or that it will only be extended for the short
term. Furthermore, this failure to finalize a refinancing for the
bank loan has negative implications for Yioula's future
refinancing negotiations for its short-term credit lines,
in our view," S&P related.

"We understand that management anticipates a successful extension
of the Piraeus loan by the end of October 2011. We will continue
to monitor the situation closely. We could raise the rating on
Yioula and its senior unsecured notes should the Piraeus loan be
successfully extended. The long-term corporate credit rating on
Yioula would likely be raised to the 'CCC' category; however, any
further rating actions would be dependent on our view of the
group's liquidity," S&P said.


* Greek Econ Min: Situation 'Pretty Hopeless' But No Default
------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Greece's situation
is "fairly hopeless," and the government can't yet see a light at
the end of the tunnel, Greek Economy Minister Michalis
Chrysochoidis said in a newspaper interview, but he insisted that
default isn't an option for the country and Athens still hopes to
secure the country's future through its reforms.


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I R E L A N D
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ANGLO IRISH: Sale of UK & Irish Loan Books Stalls
-------------------------------------------------
Laura Noonan at Irish Independent reports that Anglo Irish Bank
Chief Executive Mike Aynsley told his staff that developments on
the sale of Anglo's UK and Irish loan books are "not imminent" and
the bank will only proceed with disposals "when markets are
favorable."

Irish Independent notes that Mr. Aynsley also told colleagues that
the bank would not be making a decision on whether to sell its
wealth management business until December, but that the sale of
its US$9.5 billion US loan book was "approaching resolution".

At the end of September, Anglo chairman Alan Dukes told reporters
the bank would ramp up efforts to sell its UK assets once it had
completed the disposal of its US book, Irish Independent relates.
According to Irish Independent, Mr. Aynsley told staff Anglo would
"continue to explore its options regarding both the US and the UK
loan books" but stressed that "developments are not imminent."

"We are in the process of working with advisers to create a data
pool that will allow us to consider multiple options on an ongoing
basis," Irish Independent quotes Mr. Aynsley as saying.  "When
markets are favorable, we will be able to move forward with
confidence, whether it be on an individual loan or a group of
them."

Irish Independent notes that while the US book will be sold in one
deal to three purchasers, the UK sales are expected to be more
piecemeal, reflecting the weight of a EUR9.5 billion portfolio in
a market the size of the UK's.

Mr. Dukes recently revealed that "several hundred millions" of
Anglo's UK loans had already been sold, Irish Independent
recounts.

                     Irish Nationwide Merger

As reported by the Troubled Company Reporter-Europe on July 1,
2011, BreakingNews.ie related that The European Commission
cleared a bailout plan for Anglo Irish Bank and the Irish
Nationwide Building Society.  BreakingNews.ie disclosed that the
proposal, which was submitted for approval in January, provides
for the merger of the two troubled institutions and their winding
down over the next 10 years.  Anglo Irish and Irish Nationwide
jointly received EUR34.7 billion in capital injections from the
State to cover losses on property loans, BreakingNews.ie noted.

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 Sept. 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.


VERSAILLES CLO: Moody's Raises Rating on Class E Notes to 'Ba3'
---------------------------------------------------------------
Moody's Investors Service has taken rating action on these notes
issued by Versailles CLO M.E. I p.l.c.:

Issuer: Versailles CLO M.E. I p.l.c.

   -- EUR22.5M Class B Senior Secured Floating Rate Notes due
      2023, Upgraded to A2 (sf); previously on Jun 22, 2011 A3
      (sf) Placed Under Review for Possible Upgrade

   -- EUR18M Class C Deferrable Secured Floating Rate Notes due
      2023, Upgraded to Baa2 (sf); previously on Jun 22, 2011 Ba2
      (sf) Placed Under Review for Possible Upgrade

   -- EUR12.2M Class D Deferrable Secured Floating Rate Notes due
      2023, Upgraded to Ba1 (sf); previously on Jun 22, 2011 B1
      (sf) Placed Under Review for Possible Upgrade

   -- EUR14M Class E Deferrable Secured Floating Rate Notes due
      2023, Upgraded to Ba3 (sf); previously on Jun 22, 2011 Caa2
      (sf) Placed Under Review for Possible Upgrade

   -- EUR102.75M Class A-1-D Senior Delayed Draw Floating Rate
      Notes due 2023, Confirmed at Aa1 (sf); previously on
      Jun 22, 2011 Aa1 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR95.3M Class A-1-T Senior Secured Floating Rate Notes due
      2023, Confirmed at Aa1 (sf); previously on Jun 22, 2011 Aa1
      (sf) Placed Under Review for Possible Upgrade

   -- EUR33M Class A-2 Senior Variable Funding Floating Rate
      Notes due 2023, Confirmed at Aa1 (sf); previously on
      Jun 22, 2011 Aa1 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR7.5M Class S Senior Floating Rate Notes due 2023,
      Confirmed at Aaa (sf); previously on Dec 20, 2006 Assigned
      Aaa (sf)

RATINGS RATIONALE

Versailles CLO M.E. I p.l.c., issued in November 2006, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by BNP Paribas. This transaction will be in reinvestment
period until January 2013. It is predominantly composed of senior
secured loans.

According to Moody's, the rating actions taken on the notes are
primarily a result of applying Moody's revised CLO assumptions
described in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011.

The actions reflect key changes to the modeling assumptions, which
incorporate (1) a removal of the temporary 30% default probability
macro stress implemented in February 2009, (2) increased BET
liability stress factors as well as (3) change to a fixed recovery
rate modeling framework. Additional changes to the modeling
assumptions include (1) standardizing the modeling of collateral
amortization profile, and (2) changing certain credit estimate
stresses aimed at addressing the lack of forward looking
indicators as well as time lags in receiving information required
for credit estimate updates.

Moody's also notes that this action reflects the evolution of the
transaction performance since the last rating action.

Reported WARF has increased from 2459 to 3019 between September
2009 and July 2011. However, this reported WARF overstates the
actual deterioration in credit quality because of the technical
transition related to rating factors of European corporate credit
estimates, as announced in the press release published by Moody's
on September 1, 2010. Furthermore, reported defaulted securities
total about EUR2.5 million of the underlying portfolio compared to
EUR3.2 million in September 2009.

The overcollateralization ratios of the rated notes have
deteriorated since the rating action in November 2009. The Senior,
Class C, Class D and Class E overcollateralization ratios are
reported at 126.24%, 117.9%, 112.8% and 107.5%, respectively,
versus September 2009 levels of 128.9%, 117.7%, 112.7% and 107.4%,
respectively. Furthermore, and in relation to this, the proportion
of assets reported to be rated Caa1 or worse has increased from
5.4% to 12.6% since the last rating action which resulted in a
high haircut to the overcollateralization ratios. Had this haircut
not been applied, the reported overcollateralization ratios would
demonstrate an improvement. Moody's notes that and all related
overcollateralization tests are currently in compliance and have
never been in breach.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR 329.9m,
defaulted par of EUR 5.9 million, a weighted average default
probability of 24.1% (consistent with a WARF of 3009), a weighted
average recovery rate upon default of 46.6% for a Aaa liability
target rating, a diversity score of 35 and a weighted average
spread of 3.0%. The default probability is derived from the credit
quality of the collateral pool and Moody's expectation of the
remaining life of the collateral pool. The average recovery rate
to be realized on future defaults is based primarily on the
seniority of the assets in the collateral pool. For a Aaa
liability target rating, Moody's assumed that 91.6% of the
portfolio exposed to senior secured corporate assets would recover
50% upon default, while the remainder non first-lien loan
corporate assets would recover 10%. In each case, historical and
market performance trends and collateral manager latitude for
trading the collateral are also relevant factors. These default
and recovery properties of the collateral pool are incorporated in
cash flow model analysis where they are subject to stresses as a
function of the target rating of each CLO liability being
reviewed.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy especially as 16% of the
portfolio is exposed to obligors located in Ireland, Spain and
Italy and 2) the large concentration of speculative-grade debt
maturing between 2012 and 2015 which may create challenges for
issuers to refinance. CLO notes' performance may also be impacted
by 1) the manager's investment strategy and behavior and 2)
divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties are:

1) Moody's also notes that around 76% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed defaulted
recoveries assuming the lower of the market price and the recovery
rate in order to account for potential volatility in market
prices.

3) Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which may be
extended due to the manager's decision to reinvest into new issue
loans or other loans with longer maturities and/or participate in
amend-to-extend offerings.

4) Other collateral quality metrics: The deal is allowed to
reinvest and the manager has the ability to deteriorate the
collateral quality metrics' existing cushions against the covenant
levels. Moody's analyzed the impact of assuming the worse of
reported and covenanted values for weighted average rating factor,
weighted average spread, weighted average coupon, and diversity
score. However, as part of the base case, Moody's considered
spread and coupon levels higher than the covenant levels due to
the large difference between the reported and covenant levels.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record, and
the potential for selection bias in the portfolio. All information
available to rating committees, including macroeconomic forecasts,
input from other Moody's analytical groups, market factors, and
judgments regarding the nature and severity of credit stress on
the transactions, may influence the final rating decision.


* IRELAND: NAMA Puts Two Loan Portfolios Up for Sale
----------------------------------------------------
Reuters reports that the National Asset Management Agency,
Ireland's state-run "bad bank," has put two loan portfolios worth
a total of EUR800 million (US$1.1 billion) on the market.

A source familiar with the matter told Reuters that NAMA was being
advised by property consultancy Savills on the disposal of about
EUR200 million of loans that had been made to housing and hotel
developer Donal Mulryan.

Separately, real estate consultancy CBRE was marketing about
EUR600 million worth of loans to property developer Cyril Dennis,
Reuters notes.

NAMA was created to purge Irish banks of risky property loans and
is one of the world's biggest property groups, having shelled out
almost EUR31 billion on loans valued at more than 72 billion at
the height of Ireland's property boom, Reuters recounts.


===================
K A Z A K H S T A N
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BMB MUNAI: Deregisters Convertible Senior Notes Due 2012
--------------------------------------------------------
BMB Munai, Inc., filed with the U.S. Securities and Exchange
Commission a Post-Effective Amendment No. 1 to its Form S-3
registration statement, which was declared effective by the SEC on
Jan. 25, 2008.  The Registration Statement registered for resale
by the selling security holders the Company's US$60,000,000 5.0%
Convertible Senior Notes Due 2012, which were subsequently amended
and designated as the Company's US$61,399,800 10.75% Convertible
Senior Notes Due 2013, and the shares of the Company's common
stock, US$0.001 par value per share, into which the Notes were
convertible.

The Notes have been repaid and redeemed in full prior to any
conversion of the Notes into Common Stock.  As a result, the
offering contemplated by the Registration Statement has terminated
and the Company's obligation to maintain effective with the SEC
the Registration Statement covering the resale of the Notes and
the underlying Common Stock has terminated.

In accordance with the undertaking of the Company in the
Registration Statement to remove from registration, by means of a
post-effective amendment, any and all of the securities which
remained unsold at the termination of the offering, the Company
filed the Post-Effective Amendment to remove from registration the
Notes and the Common Stock registered under the Registration
Statement which remained unsold at the termination of the
offering.

                          About BMB Munai

Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada
corporation that originally incorporated in the State of Utah in
1981.  Since 2003, its business activities have focused on oil and
natural gas exploration and production in the Republic of
Kazakhstan through its wholly-owned operating subsidiary Emir Oil
LLP.  Emir Oil holds an exploration contract that allows the
Company to conduct exploration drilling and oil production in the
Mangistau Province in the southwestern region of Kazakhstan until
January 2013.  The exploration territory of its contract area is
approximately 850 square kilometers and is comprised of three
areas, referred to herein as the ADE Block, the Southeast Block
and the Northwest Block.

The Company realized a loss from continuing operations of
US$15.1 million during fiscal year 2011 compared to US$10.7
million during fiscal year 2010.  This 41% increase in loss from
continuing operations was primarily attributable to increased
general and administrative and interest expense and the foreign
exchange loss of US$415,803 incurred during fiscal year 2011.
Hansen, Barnett & Maxwell, P.C., in Salt Lake City, said that as a
result of the pending sale of Emir Oil LLP, BMB Munai will have no
continuing operations that result in positive cash flow, which
raise substantial doubt about its ability to continue as a going
concern.

The Company did not generate any revenue during the fiscal years
ended March 31, 2011, and 2010, except from oil and gas sales
through Emir Oil.

The Company's balance sheet at June 30, 2011, showed
US$326.89 million in total assets, US$103.95 million in total
liabilities, and US$222.93 million in stockholders' equity.

                        Bankruptcy Warning

The Company has disclosed that if it does not complete the sale,
it will not have sufficient funds to retire the restructured
Senior Notes when they become due.  "In this event, we would
likely be required to consider liquidation alternatives, including
the liquidation of our business under bankruptcy
protection," the Company said.


===================
L U X E M B O U R G
===================


DEXIA BANQUE: Fitch Puts 'CC' Rating on Hybrid Securities on RWN
----------------------------------------------------------------
Fitch Ratings has placed Dexia Banque Internationale a
Luxembourg's (DBIL) 'A+' Long-term Issuer Default Rating (IDR) on
Rating Watch Negative (RWN).

The RWN follows the announcement on October 6, 2011 that Dexia has
entered into exclusive negotiations to sell DBIL.  DBIL's Long-
and Short-term IDRs, Support Rating and Support Rating Floor have
been driven by an extremely high probability of support to Dexia,
and in turn to DBIL, from the states of France ('AAA'/Stable),
Belgium ('AA+'/Negative) and Luxembourg ('AAA'/Stable) if
required.  If Dexia sells DBIL, its ratings will no longer benefit
from this expected support.

The rating action takes into account the Luxembourg minister of
finance's statement about the domestic systemic importance of DBIL
and the state's intention to take a minority stake in the bank The
RWN will be resolved once the agency concludes its review of the
impact of the sale of DBIL on its ratings.

The rating actions are as follows:

Dexia Banque Internationale a Luxembourg (DBIL):

  -- Long-term IDR: 'A+' placed on RWN
  -- Short-term IDR: 'F1+' placed on RWN
  -- Senior debt: 'A+' placed on RWN
  -- Market linked notes: 'A+emr' placed on RWN
  -- Subordinated debt: 'A' remains on RWN
  -- Hybrid securities: 'CCC' placed on RWN
  -- Individual Rating: 'D' remains on RWN
  -- Support Rating: '1' placed on RWN
  -- Support Rating Floor: 'A+' placed on RWN
  -- State guaranteed debt: affirmed at 'AA+'


HARVEST CLO: Moody's Raises Ratings on Two Note Classes to 'B1'
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Harvest CLO II S.A.:

   -- EUR249.45M Class A-2 Senior Floating Rate Notes, Upgraded
      to Aaa (sf); previously on Jun 22, 2011 Aa1 (sf) Placed
      Under Review for Possible Upgrade

   -- EUR66.15M Class B Senior Floating Rate Notes, Upgraded to
      A1 (sf); previously on Jun 22, 2011 Baa1 (sf) Placed Under
      Review for Possible Upgrade

   -- EUR32.1M Class C-1 Senior Subordinated Deferrable Floating
      Rate Notes, Upgraded to Baa3 (sf); previously on Jun 22,
      2011 Ba2 (sf) Placed Under Review for Possible Upgrade

   -- EUR3M Class C-2 Senior Subordinated Deferrable Fixed Rate
      Notes, Upgraded to Baa3 (sf); previously on Jun 22, 2011
      Ba2 (sf) Placed Under Review for Possible Upgrade

   -- EUR17.25M Class D-1 Senior Subordinated Deferrable Floating
      Rate Notes, Upgraded to Ba2 (sf); previously on Jun 22,
      2011 B2 (sf) Placed Under Review for Possible Upgrade

   -- EUR3M Class D-2 Senior Subordinated Deferrable Fixed Rate
      Notes, Upgraded to Ba2 (sf); previously on Jun 22, 2011 B2
      (sf) Placed Under Review for Possible Upgrade

   -- EUR11.5M Class E-1 Senior Subordinated Deferrable Floating
      Rate Notes, Upgraded to B1 (sf); previously on Jun 22, 2011
      Caa2 (sf) Placed Under Review for Possible Upgrade

   -- EUR2M Class E-2 Senior Subordinated Deferrable Fixed Rate
      Notes, Upgraded to B1 (sf); previously on Jun 22, 2011 Caa2
      (sf) Placed Under Review for Possible Upgrade

   -- EUR2.6M Class R Combination Notes, Upgraded to Ba2 (sf);
      previously on Jun 22, 2011 Caa1 (sf) Placed Under Review
      for Possible Upgrade

   -- EUR6M Class S Combination Notes, Upgraded to Ba1 (sf);
      previously on Jun 22, 2011 B3 (sf) Placed Under Review for
      Possible Upgrade

   -- EUR5M Class V Combination Notes, Upgraded to Baa3 (sf);
      previously on Jun 22, 2011 Ba3 (sf) Placed Under Review for
      Possible Upgrade

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Class R,
Class S and Class V, the 'Rated Balance' is equal at any time to
the principal amount of the Combination Note on the Issue Date
increased by the Rated Coupon of Euribor, 2% and Euribor+1.5% per
annum respectively, accrued on the Rated Balance on the preceding
payment date minus the aggregate of all payments made from the
Issue Date to such date, either through interest or principal
payments. The Rated Balance may not necessarily correspond to the
outstanding notional amount reported by the trustee.

RATINGS RATIONALE

Harvest CLO II S.A., issued in April 2005, is a single currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European loans. The portfolio is managed by 3i
Debt Management Investments Ltd. This transaction will be in
reinvestment period until May 2012. It is predominantly composed
of senior secured loans.

According to Moody's, the rating actions taken on the notes are
primarily a result of applying Moody's revised CLO assumptions
described in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011. The actions also reflect
consideration of credit improvement of the underlying portfolio
and an increase in the transaction's overcollateralization ratios
since the rating action in December 2009.

The actions reflect key changes to the modeling assumptions, which
incorporate (1) a removal of the temporary 30% default probability
macro stress implemented in February 2009, (2) increased BET
liability stress factors as well as (3) change to a fixed recovery
rate modeling framework. Additional changes to the modeling
assumptions include (1) standardizing the modeling of collateral
amortization profile, and (2) changing certain credit estimate
stresses aimed at addressing the lack of forward looking
indicators as well as time lags in receiving information required
for credit estimate updates, and (3) adjustments to the equity
cash-flows haircuts applicable to combination notes.

Moody's also notes that this action also reflects improvements of
the transaction performance since the last rating action.

In particular, Class A-1A and Class A-2 notes have been paid down
by approximately 1.34% or EUR4.77 million since the rating action
in December 2009.

The overcollateralization ratios of the rated notes have improved
since the rating action in December 2009. The Class A/B, Class C,
Class D and Class E overcollateralization ratios are reported at
124.0%, 114.4%, 109.5% and 106.5%, respectively, versus November
2009 levels of 119.0%, 109.9%, 105.3% and 102.4%, respectively,
and all related overcollateralization tests are currently in
compliance.

The reported WARF has increased from 2737 to 2786 between November
2009 and August 2011. However, the change in reported WARF
understates the actual credit quality improvement because of the
technical transition related to rating factors of European
corporate credit estimates, as announced in the press release
published by Moody's on 1 September 2010. In addition, securities
rated Caa or lower make up approximately 3.37% of the underlying
portfolio versus 12.47% in November 2009. Additionally, defaulted
securities total about EUR5.8 million of the underlying portfolio
compared to EUR29.9 million in November 2009.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR516.4 million,
defaulted par of EUR5.8 million, a weighted average default
probability of 20.93% (consistent with a WARF of 2812), a weighted
average recovery rate upon default of 44.59% for a Aaa liability
target rating, a diversity score of 43 and a weighted average
spread of 3.165%. The default probability is derived from the
credit quality of the collateral pool and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority of the assets in the collateral pool. For a Aaa
liability target rating, Moody's assumed that 86.48% of the
portfolio exposed to senior secured corporate assets would recover
50% upon default, while the remainder non first-lien loan
corporate assets would recover 10%. In each case, historical and
market performance trends and collateral manager latitude for
trading the collateral are also relevant factors. These default
and recovery properties of the collateral pool are incorporated in
cash flow model analysis where they are subject to stresses as a
function of the target rating of each CLO liability being
reviewed.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy and 2) the large
concentration of speculative-grade debt maturing between 2012 and
2015 which may create challenges for issuers to refinance. CLO
notes' performance may also be impacted by 1) the manager's
investment strategy and behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Sources of additional performance uncertainties are:

1) Moody's also notes that around 73% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed defaulted
recoveries assuming the lower of the market price and the recovery
rate in order to account for potential volatility in market
prices.

3) Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which may be
extended due to the manager's decision to reinvest into new issue
loans or other loans with longer maturities and/or participate in
amend-to-extend offerings.

4) Other collateral quality metrics: The deal is allowed to
reinvest and the manager has the ability to deteriorate the
collateral quality metrics' existing cushions against the covenant
levels. Moody's analyzed the impact of assuming lower of reported
and covenanted values for weighted average rating factor, weighted
average spread, and diversity score. However, as part of the base
case, Moody's considered spread and coupon levels higher than the
covenant levels due to the large difference between the reported
and covenant levels.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record, and
the potential for selection bias in the portfolio. All information
available to rating committees, including macroeconomic forecasts,
input from other Moody's analytical groups, market factors, and
judgments regarding the nature and severity of credit stress on
the transactions, may influence the final rating decision.


ORCO PROPERTY: Expects to Sell Sky Office Tower by Year-End
-----------------------------------------------------------
Lenka Ponikelska at Bloomberg News reports that Orco Property
Group SA Chief Executive Officer Jean-Francois Ott said the
company expects to sell its Sky Office tower in Dusseldorf before
the end of the year.

"There has been a lot of interest from investors and I'm confident
the transaction will take place before the end of the year,"
Bloomberg quotes Mr. Ott as saying in a phone interview from
Paris.  The company expects to receive a net EUR40 million
(US$54.3 million) to EUR50 million from the sale.

Orco is disposing assets in an effort to find cash to refinance
its EUR300 million loan for Berlin's GSG housing portfolio and
another EUR100 million of bonds at its German unit before the mid-
2012, Bloomberg discloses.  The company already agreed to sell
Russian assets worth EUR53 million to a local investor in
September and will receive parts before the bonds' maturity,
Bloomberg states.

Orco operates under a so-called safeguard plan approved by a Paris
Court in May 2010, Bloomberg notes.  The program, according to
French law, temporarily protects companies from creditors and
allows management to renegotiate debt, Bloomberg says.  Orco
pledged to overhaul the company and use some of cash from
disposals on existing projects to revive the business, Bloomberg
relates.

Bloomberg notes that Mr. Ott said Orco is in talks with a number
of German banks to refinance the loan for GSG.  He said that a
group of as many as six lenders has a "reasonable appetite" to
take part in the transaction, Bloomberg recounts.  Still, the
total amount the company may raise is less than the EUR300 million
needed to refinance the loan, Bloomberg says.

"We're at a level of EUR225 million to EUR250 million, so I'm
aware that there might be a gap," Bloomberg quotes Mr. Ott as
saying.  The executive expects to reach an agreement with lenders
in January.

Orco isn't considering selling GSG or a part of the asset,
Mr. Ott, as cited by Bloomberg, said, adding that the company
doesn't "intend to break up the essential part of our portfolio."

Orco Property Group SA -- http://www.orcogroup.com/-- is a
Luxembourg-based real estate company, specializing in the
development, rental and management of properties in Central and
Eastern Europe.  Through its fully consolidated subsidiaries, Orco
Property Group SA operates in several countries, including the
Czech Republic, Slovakia, Germany, Hungary, Poland, Croatia and
Russia.  The Company rents and manages real estate and hotels
properties composed of office buildings, apartments with services,
luxury hotels and hotel residences; it also develops real estate
projects as promoter.


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


GREEN LION: Moody's Assigns 'Ba1' Rating to EUR176.4-Mil. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned definitive credit ratings
to the following classes of notes issued by Green Lion III B.V.:

Aaa (sf) to Euro 1,469.2 million floating rate Senior Class A1
Mortgage-Backed Notes 2011 due 2043

Aaa (sf) to Euro 1,469.2 million floating rate Senior Class A2
Mortgage-Backed Notes 2011 due 2043

Aaa (sf) to Euro 1,469.2 million floating rate Senior Class A3
Mortgage-Backed Notes 2011 due 2043

Aaa (sf) to Euro 1,057.9 million floating rate Senior Class A4
Mortgage-Backed Notes 2011 due 2043

Aa3 (sf) to Euro 117.5 million floating rate Mezzanine Class B
Mortgage-Backed Notes 2011 due 2043

A2 (sf) to Euro 117.5 million floating rate Mezzanine Class C
Mortgage-Backed Notes 2011 due 2043

Ba1 (sf) to Euro 176.4 million floating rate Subordinated Class D
Mortgage-Backed Notes 2011 due 2043

RATINGS RATIONALE

The transaction represents the second securitization rated by
Moody's of Dutch prime mortgage loans backed by residential
properties located in the Netherlands and originated by
WestlandUtrecht Bank N.V. ("WestlandUtrecht"; not rated). The
portfolio will be serviced by WestlandUtrecht.

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,
as well as the transaction structure and any legal considerations
as assessed in Moody's cash flow analysis.

The expected portfolio loss of 0.90% of the portfolio at closing
and the MILAN Aaa required Credit Enhancement of 7.80% served as
input parameters for Moody's cash flow model. This model is based
on a probabilistic lognormal distribution as described in the
report "The Lognormal Method Applied to ABS Analysis", published
in July 2000.

The MILAN Aaa Credit Enhancement number is higher than other
recently closed prime Dutch RMBS transactions. The key drivers for
the metric are (i) Moody's assessment of the originator and
servicer which were perceived as weaker when compared with other
Dutch transactions, (ii) the proportion of self employed borrowers
(16.0%) which is higher compared to the proportion in other Dutch
RMBS transactions and (iii) the weighted average loan-to-
foreclosure-value (LTFV) of 92.8% which is in line with other
Dutch RMBS transactions. This pool is also characterized by some
regional concentration, with higher concentrations in Noord-
Brabant and Utrecht compared to other pools in the Dutch market.
Moody's addressed this regional concentration in the MILAN model
as per the standard methodology.

Furthermore, the pool also contains loans backed by properties
with a high property value, which distinguishes this pool from
other prime pools in the Dutch market. Moody's applied an
additional adjustment in the MILAN model for these loans, because
Moody's views these loans to be riskier than the benchmark loan.
Moody's is concerned about higher property value decline in a
stressed environment because of reduced liquidity in this segment
of the market. 5.7% of the pool is backed by properties with an
estimated market value of more than EUR750,000 and 2.2% of the
pool is backed by properties with an estimated market value of
more than EUR1,000,000.

The key drivers for the portfolio expected loss are (i) the
performance of the seller's book, (ii) the performance of the
seller's precedent transaction (not rated by Moody's) and (iii)
benchmarking with comparable transactions and originators in the
Dutch market. The arrears levels in the originator's book are
significantly higher than the levels Moody's generally sees in the
Dutch market. Moody's therefore expects higher losses for this
portfolio in comparison to other pools in Dutch RMBS transactions.

Furthermore, approximately 8.6% of the portfolio is linked to life
insurance policies (life mortgage loans), which are exposed to
set-off risk in case an insurance company goes bankrupt. The
seller has provided loan-by-loan insurance company counterparty
data, which Moody's used in the analysis of the set-off risk.

An unusual feature of this transaction is that from October 2017,
every six months the issuer has the option to partially redeem the
Class A notes by EUR 300,000,000. This redemption will be applied
sequentially to the outstanding Class A notes. Normally, Moody's
does not assume that call options are exercised. However, for this
transaction, because the redemption are partial, Moody's was
concerned about the potential reduced value of excess spread
following these partial optional redemptions. Moody's therefore
accounted for these partial optional redemptions in the cash flow
analysis.

A reserve account is funded at 1.0% per cent of the total notes
outstanding at closing. After the first optional redemption date
in October 2021, the reserve account will amortize to 0.5% of the
original note balance.

ING Bank N.V. ("ING Bank", rated Aa3/P-1) acts as back-up servicer
in this transaction. If the servicing by WestlandUtrecht is
terminated, ING will take over the servicing of the mortgage
loans. WestlandUtrecht also performs the role of issuer
administrator, which includes cash management activities. There is
no back-up arrangement in place for the issuer administration
activities. If the issuer administration activities are
terminated, the issuer will appoint a new issuer administrator. In
analyzing the operational risks in this transaction, Moody's
relied on the fact that WestlandUtrecht is wholly owned by ING
Bank. Should the ownership of WestlandUtrecht change, this might
result in a review of the ratings for operational risk.

The rating addresses 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 V-Score for this transaction is Low/Medium, which is in line
with the V-Score assigned for the Dutch RMBS sector, mainly due to
the fact that it is a standard Dutch prime RMBS structure. The
primary source of uncertainty surrounding Moody's assumptions is
regarding the quality of historical data received on the
originator's book and the level of arrears. Furthermore, the
partial optional redemptions in this structure required additional
analysis on the cash flow modelling, which was slightly more
complex than the standard Dutch transaction.

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: If the MILAN Aaa CE was increased
from 7.8% to 12.5% (a stress of 1.6 times) and the portfolio
expected loss increased from 0.90% to 2.70% (a stress of 3 times),
the model output indicates that the class A1 and A2 notes would
still achieve Aaa assuming and all other factors remain equal.
Furthermore, the model output indicated that classes A3 and A4
would have achieved Aa3 if the MILAN Aaa CE increased to 12.5% and
the expected loss increased to 2.70% and all other factors remain
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.

Definitive 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 methodologies used in this rating were Moody's Approach to
Rating RMBS in Europe, Middle East, and Africa published in
October 2009 and Moody's Updated MILAN Methodology for Rating
Dutch RMBS published in October 2009.


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


* PORTUGAL: Moody's Downgrades BFSRs of Four Banks
--------------------------------------------------
Moody's Investors Service has taken rating actions on Portuguese
banks, involving downgrades by one or two notches of the senior
debt and deposit ratings of nine banks and downgrades by one or
two notches of the standalone ratings of six of these banks. All
of the banks' ratings carry a negative outlook with the exception
of Banco Portugues de Negocios (BPN), which has a developing
outlook on all of its ratings.

The rating actions conclude the review for downgrade initiated on
July 15, 2011, following the downgrade of the Republic of Portugal
to Ba2, outlook negative, from Baa1.

The key driver for the downgrades of most banks' debt and deposit
ratings is Moody's assessment of the deterioration of their
unsupported financial strength as a consequence of these factors:

(i) The increased asset risk as a direct consequence of the banks'
holdings of Portuguese government debt and the sovereign's
downgraded rating;

(ii) The expected further deterioration of the banks' domestic
asset quality as a consequence of the weak outlook for economic
growth in the context of the government's austerity measures;

(iii) The liquidity strains of the banks that currently lack
access to wholesale funding.

The six banks which experienced downgrades of both their
standalone ratings and their debt and deposit ratings are Caixa
Geral de Depositos (CGD), Banco Comercial Portugues (BCP), Banco
Espirito Santo (BES), Banco BPI (BPI), Banco Santander Totta
(BST), and Caixa Economica Montepio Geral (Montepio).

Banco Internacional do Funchal (Banif SA) and Banco Portugues de
Negocios (BPN) had their debt and deposit rating downgraded as a
consequence of the weaker Portuguese sovereign, resulting in a
lower rating uplift for these banks' debt ratings. The debt
ratings of Espirito Santo Financial Group (ESFG) follow the lower
rating of its operating company, BES.

At the same time, the downgrades of banks' standalone ratings and
debt ratings also triggered downgrades of their dated subordinated
debt, junior subordinated debt, and preference share ratings. In
those cases where the banks' standalone ratings are no longer
higher than the government's ratings, their government-guaranteed
debt has also been downgraded.

RATINGS RATIONALE

RATIONALE FOR DOWNGRADE OF STANDALONE RATINGS

The standalone ratings of all rated Portuguese banks (except Banif
SA and BPN and the holding company of BES, ESFG) have been
downgraded by one notch as a result of the above listed factors,
i.e., the increased asset risk from the banks' holding of
Portuguese government debt, the expected further deterioration of
the banks' domestic asset quality and the banks' liquidity
strains.

In addition, the standalone ratings of BES, BCP and BPI have each
been downgraded by an additional notch to reflect the following
idiosyncratic risks:

(i) The two-notch downgrade of BES's standalone ratings to Ba3 on
the long-term scale (equivalent to a Bank Financial Strength
Rating (BFSR) of D-) from D+/Ba1 incorporates Moody's concern that
BES's business model may be particularly affected by Portuguese
banks' loss of market access: BES has traditionally been the most
active Portuguese bank in the capital markets as well as a
wholesale-oriented bank displaying a high reliance on market-
sensitive funding.

(ii) The two-notch downgrade of BCP's standalone ratings to B1 on
the long term scale (equivalent to the BFSR of E+) from D/Ba2
reflects concerns over the bank's particularly vulnerable funding
profile due to its high reliance on wholesale funds; the weaker
than average asset quality of its domestic assets; its exposure to
Greece via its Greek subsidiary; and weak profitability that
provides it with little financial flexibility to manage these
challenges.

(iii) The two-notch downgrade of BPI's standalone ratings to Ba2
from Baa3 on the long-term scale (mapping to a downgrade on the
BFSR scale from D+ to D) was caused by its direct exposure to
Greece. Furthermore, Moody's is concerned that - despite its
relatively strong liquidity, asset quality performance and
management throughout the crisis so far - it will be challenging
for BPI to immunize itself against the pressures within the
Portuguese banking sector that stem from the above described
causes, resulting in a standalone rating at the same level as the
Portuguese government.

The standalone ratings of Banif SA at D-/Ba3 have been confirmed
and BPN at E/Caa1 have been affirmed; although they share similar
vulnerabilities as the other banks, these risks were already
incorporated into their relatively low standalone ratings.

Moody's acknowledges that the recapitalization and deleveraging
plans imposed by the regulator in conjunction with the European
Union, the European Central Bank and the IMF (the "Troika") as
part of their support package for Portugal should, if successful,
help to restore confidence in the banking system. However, Moody's
believes that these plans face significant implementation risks.
For example, deleveraging plans would be threatened should market
conditions remain fragile, and any material growth in retail
deposits would rely in part on an upturn in the economic
environment. The rating action incorporates those implementation
risks.

All Portuguese banks' standalone ratings have a negative outlook
(with the exception of BPN), reflecting the very challenging
operating environment in the country, which will continue exerting
negative pressure on the banks.

RATIONALE FOR DOWNGRADE OF DEBT RATINGS

In the case of six banks (CGD, BCP, BES, BPI, BST and Montepio),
the downgrades in long term debt ratings reflect the downgrades of
the banks' standalone ratings. Banif SA's and BPN's debt ratings
were respectively reduced by one and two notches to reflect the
weakened position of the Portuguese sovereign.

In addition, ESFG's (holding company of BES) debt ratings have
been downgraded by two notches to B1/Not Prime from Ba2/Not Prime
reflecting the two-notch downgrade of BES' standalone BFSR to D-
(mapping to Ba3 on the long-term scale) from D+ (Ba1). The ratings
of ESFG reflect the structural subordination to its operating
company BES.

Banco Santander Totta has higher ratings at Baa2 based on its
higher standalone rating at D+/Ba1 and on Moody's assessment of
parental support from Banco Santander S.A., rated Aa2/B-. All
banks' debt ratings carry a negative outlook reflecting the
current negative outlook of the Portuguese Republic's Ba2 bond
rating and the negative outlook on the banks' standalone BFSR.

RATIONALE FOR DOWNGRADE OF SUBORDINATED DEBT RATINGS

Moody's has downgraded the senior subordinated debt ratings of
eight Portuguese banks in line with the downgrade of these banks'
senior unsecured debt ratings. This rating approach implies that
if a bank's senior debt rating benefits from an assumption of
systemic support, its subordinated debt will benefit similarly.
Moody's does, however, intend to reassess its systemic support
assumptions for subordinated debt in Portugal , alongside other
European countries, during the remainder of this year in response
to prospective European banking legislation. This reassessment is
not captured in the rating actions.

RATIONALE FOR DOWNGRADE OF HYBRID INSTRUMENTS

The downgrade of six banks' junior subordinated debt and of five
banks' preference shares ratings -- for which Moody's does not
assume any systemic support -- follows the downgrade of these
banks' standalone ratings. All of these instruments' ratings have
a negative outlook, in line with the outlook on the banks'
standalone ratings.

RATIONALE FOR DOWNGRADE OF GOVERNMENT-GUARANTEED DEBT

Moody's has downgraded the government guaranteed debt of two
banks, CGD and BES. The rating action has been triggered by the
downgrade of these banks' BFSRs to Ba2/Ba3 from Ba1. Moody's rates
Portuguese government-guaranteed debt at either the sovereign
rating or the bank's standalone rating, depending on which is
higher. Following the downgrade of CGD's and BES's BFSRs, their
standalone rating assessments are now Ba2 and Ba3, respectively,
in line (or below) the sovereign's rating. The outlook on the
banks' government- guaranteed debt is negative in line with the
negative outlook of the Portuguese Republic's Ba2 bond rating.

RATING ACTIONS

(i) Caixa Geral de Depositos (CGD): the BFSR was downgraded to D
(mapping to Ba2 on the long term scale) from D+ (Ba1) and the debt
and deposit ratings were downgraded to Ba2/Not Prime from Ba1/Not
Prime.

(ii) Banco Comercial Portugues (BCP): the BFSR was downgraded to
E+ (B1) from D (Ba2) and the debt and deposit ratings were
downgraded to Ba3/Not Prime from Ba1/Not Prime.

(iii) Banco Espirito Santo (BES): the BFSR was downgraded to D-
(Ba3) from D+ (Ba1) and the debt and deposit ratings were
downgraded to Ba2/Not Prime from Ba1/Not Prime.

(iv) Banco BPI (BPI): the BFSR was downgraded to D (Ba2) from D+
(Baa3) and the debt and deposit ratings were downgraded to Ba2/Not
prime from Baa3/Prime-3.

(v) Banco Santander Totta (BST): the BFSR was confirmed at D+, the
baseline credit assessment (BCA) was downgraded to Ba1 from Baa3
and the debt and deposit ratings were downgraded to Baa2/Prime-2
from Baa1/Prime-2.

(vi) Caixa Economica Montepio Geral (Montepio): the BFSR was
downgraded to D- (Ba3) from D (Ba2) and the debt and deposit
ratings were downgraded to Ba3/Not Prime from Ba2/Not Prime.

(vii) Banco Internacional do Funchal (Banif SA): the BFSR was
confirmed at D- (Ba3) and the debt and deposit ratings were
downgraded to Ba3/Not Prime from Ba2/Not Prime.

(viii) Espirito Santo Financial Group (ESFG): the debt ratings
were downgraded to B1/Not Prime from Ba2/Not Prime.

(ix) Banco Portugues de Negocios (BPN): the BFSR was affirmed at E
(Caa1) and the deposit ratings were downgraded to B3/Not Prime
from B1/Not Prime. The outlook on all of the bank's ratings is
developing.

THE METHODOLOGIES USED

The methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank Ratings:
A Refined Methodology published in March 2007, and Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated Debt
published in November 2009.

Headquartered in Lisbon, Portugal, CGD reported total unaudited
consolidated assets of EUR123.7 billion as of 30 June 2011.

Headquartered in Oporto, Portugal, BCP reported total unaudited
consolidated assets of EUR99.7 billion as of 30 June 2011.

Headquartered in Lisbon, Portugal, BES reported total unaudited
consolidated assets of EUR80.2 billion as of 30 June 2011.

Headquartered in Lisbon, Portugal, BPI reported total unaudited
consolidated assets of EUR43.2 billion as of 30 June 2011.

Headquartered in Lisbon, Portugal, BST reported total audited
consolidated assets of EUR38.8 billion as of 30 June 2011.

Headquartered in Funchal, Portugal, Banif SA reported total
audited assets of EUR17.5 billion as of 30 June 2011.

Headquartered in Lisbon, Portugal, Montepio reported total audited
consolidated assets of EUR21.7 billion as of 30 June 2011.

Headquartered in Lisbon, Portugal, BPN reported total audited
consolidated assets of EUR7.0 billion as of 31 December 2010.

Headquartered in Luxembourg, ESFG reported total audited
consolidated assets of EUR83.8 billion as of 30 June 2011.


* PORTUGAL: Moody's Downgrades Multiple Covered Bond Ratings
----------------------------------------------------------
Moody's Investors Service has taken these rating actions on
covered bonds issued by various Portuguese banks, prompted by
Moody's downgrades on 7 October 2011 of the senior unsecured
ratings of the banks supporting the affected covered bond
programs:

- Mortgage covered bonds issued by Banco BPI (BPI): downgraded to
  Baa3; previously, on 15 July 2011 downgraded to A3 on review
  for downgrade

- Public-sector covered bonds issued by Banco BPI (BPI):
  downgraded to Baa3; previously, on 15 July 2011 downgraded to
  A3 on review for downgrade

- Mortgage covered bonds issued by Banco Santander Totta (BST):
  downgraded to A2; previously, on 20 September 2011 downgraded
  to A1 on review for downgrade

- Mortgage covered bonds issued by BANIF - Banco Internacional do
  Funchal, S.A. (Banif): ratings confirmed at Baa3; previously,
  on 29 July 2011 assigned Baa3 on review for downgrade

- Mortgage covered bonds issued by Caixa Economica Montepio Geral
  (Montepio): ratings confirmed at Baa3; previously, on 15 July
  2011 downgraded to Baa3 on review for downgrade

- Mortgage covered bonds issued by Banco Comercial Portugues,
  S.A. (BCP): ratings confirmed at Baa3; previously, on 15 July
  2011 downgraded to Baa3 on review for downgrade

- Mortgage covered bonds issued by Banco de Investimento
  Imobiliario, S.A. (BII): ratings confirmed at Baa3; previously,
  on July 15, 2011 downgraded to Baa3 on review for downgrade

- Mortgage covered bonds issued by Banco Espirito Santo, S.A.
  (BES): ratings confirmed at Baa3; previously, on 15 July 2011
  downgraded to Baa3 on review for downgrade

- Mortgage covered bonds issued by Caixa Geral de Depositos
(CGD): ratings confirmed at Baa3; previously, on 15 July 2011
  downgraded to Baa3 on review for downgrade

- Public sector covered bonds issued by CGD: ratings confirmed at
  Baa3; previously, on 15 July 2011 downgraded to Baa3 on review
  for downgrade.

RATINGS RATIONALE

The rating actions on the covered bonds follow Moody's downgrade
on October 7, 2011 of the relevant issuer's senior unsecured
ratings. For further information, please refer to "Moody's takes
rating actions on Portuguese banks; outlook negative" published 7
October 2011. These rating actions on the issuers conclude the
review for downgrade that Moody's initiated on 15 July 2011,
following the downgrade of the rating of the Republic of Portugal
to Ba2 from Baa1. For further information, please refer to
"Moody's takes rating actions on Portuguese banks further to
sovereign downgrade" published on 15 July 2011 and "Moody's
downgrades Portugal to Ba2 with a negative outlook from Baa1"
published on 5 July 2011.

Based on the current Timely Payment Indicator (TPI) of "Very
Improbable" for BPI, BST, Montepio, BCP, BII, BES, CGD, and
"Probable-High" for Banif, the combination of the lower issuer
ratings and TPIs now constrains the ratings of the covered bonds
of the following programs as follows:

- BPI's mortgage covered bond ratings capped at Baa3, given BPI's
  long-term unsecured debt of Ba2

- BPI's public-sector covered bond ratings capped at Baa3, given
  BPI's long-term unsecured debt rating of Ba2

- BST's mortgage covered bond ratings capped at A1, given BST's
  long-term unsecured debt rating of Baa2

- BCP's mortgage covered bond ratings capped at Baa3, given BCP's
  long-term unsecured debt rating of Ba3

- BII's mortgage covered bond ratings (guaranteed by BCP) capped
  at Baa3, given BCP's (guarantor) long-term unsecured debt
  rating of Ba3

- BES's mortgage covered bond ratings capped at Baa3, given BES's
  long-term unsecured debt rating of Ba2

- CGD's mortgage covered bond ratings capped at Baa3, given CGD's
  long-term unsecured debt rating of Ba2

- CGD's public-sector covered bond ratings capped at Baa3, given
  CGD's long-term unsecured debt rating of Ba2

- Montepio's mortgage covered bond ratings capped at Baa3, given
  Montepio's long-term unsecured debt rating of Ba3

- Banif's mortgage covered bond ratings capped at A3, given
  Banif's long-term unsecured debt rating of Ba3

Furthermore, for BST and Banif, the covered bond ratings are
assigned below their above-mentioned respective TPI Caps, because
the current level of over-collateralization available within the
programs is lower than that necessary to attain a higher rating.

The ratings actions on the covered bonds reflect Moody's analysis
of the negative impact caused by the downgrades of the issuers
ratings through a two step process:

(1) Expected Loss

Moody's expected loss analysis is negatively affected by the
downgrade of the issuer's rating. As the credit strength of the
issuer is incorporated into Moody's expected loss methodology, any
downgrade of the issuer's ratings will increase the expected loss
on the covered bonds.

(2) Timely Payment Indicators

The current TPI for BPI, BST, Montepio, BCP, BII, BES, CGD is
"Very Improbable". The current TPI for Banif is "Probable-high",
due to structural features that mitigate some of the refinancing
risk that exists in some of the other Portuguese covered bond
programs. Under the TPI framework, the covered bond ratings are
capped if any of the senior unsecured ratings of the issuers are
downgraded below a certain level. Moody's will assess whether the
weakened credit position of the banks reflected in the recent
downgrades has materially reduced the likelihood that the
financial system would be willing and able to support the
refinancing of the covered bonds of any defaulted bank.

RATING METHODOLOGY

Moody's rating for any covered bond is determined after applying a
two-step process:

(1) Moody's determines a rating based on the expected loss on the
bond. This is modeled as a function of the issuer's probability of
default and the stressed losses on the cover pool assets following
issuer default; and

(2) Moody's assigns a TPI, which indicates the likelihood that
timely payment will be made to covered bondholders following
issuer default. The effect of the TPI is to limit the covered bond
rating to a certain number of notches above the issuer's rating.

The methodologies used in these rating were Moody's Rating
Approach to Covered Bonds, published in March 2010, and Assessing
Swaps as Hedges in the Covered Bond Market, published in December
2009.

The rating assigned by Moody's addresses the expected loss posed
to investors. Moody's ratings address only the credit risks
associated with the transaction. Other non-credit risks have not
been addressed, but may have a significant effect on yield and to
investors.


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


OTP BANK: Fitch Affirms Issuer Default Rating at 'BB'
-----------------------------------------------------
Fitch Ratings has affirmed OTP Bank Plc's (OTPH) Support Rating at
'3' and its Russian subsidiary OJSC OTP Bank's (OTPR) Long-term
Issuer Default Rating at 'BB' with a Stable Outlook.

OTPH's Support Rating reflects the moderate probability of support
from domestic authorities given its high domestic systemic
importance.  At end-H111, OTPH was the largest bank in Hungary,
with a dominant market share of about 25% in total assets and
deposits.  The ability to support OTPH and therefore the bank's
Support Rating is limited by the Hungary's Long-term Issuer
Default Rating ('BBB'/Stable).

OTPR's Long- and Short-term IDRs and Support Rating are driven by
potential support from OTPH, which holds a 95.8% stake in OTPR.
Fitch believes that the parent would have a high propensity to
support OTPR in case of need in light of the ownership, quite high
level of integration, and the significant importance of the
Russian subsidiary, which has become an important contributor to
the group's results.

The affirmation of OTPR's Viability Rating reflects its solid
liquidity and capital positions, the improving quality of recently
issued loans and sizeable pre-impairment results, which provide a
considerable buffer to absorb loan losses.  The ratings remain
constrained by the high credit risk inherent in unsecured consumer
lending in the highly cyclical Russian economy, very rapid loan
growth and relatively limited track record.

The bank focuses on short-term consumer lending to mostly lower
income individuals of which the bulk is extended in Russian
regions.  Point-of-sale lending is the leading client acquisition
channel; OTPR was the second-largest player in this segment with
an approximately 19.5% share of receivables at end-8M11.

The cost of risk reduced to a relatively low 4.1% of average gross
loans in H111 compared with 8.4% in 2009.  The reduction in credit
costs was mainly driven by the generally favorable operating
environment, while the newly-adopted risk-based pricing approach
to underwriting may help the bank to better price risk.  Despite
the improving quality of recently originated loans, the stock of
non-performing loans remains high, totalling 13% of gross loans at
end-H111.  This reflects the high-risk nature of the business it
writes and the fact that OTPR keeps delinquent loans on balance
sheet until they become over two years overdue.

Fitch acknowledges improvements in the risk management function
and stronger profitability in 2010-H111.  However, OTPR bears
notable downside risk due to the highly cyclical nature of the
Russian economy.  Its lower income clientele is more financially
stretched than higher earners, and is prone to deterioration of
the macro environment.

Fitch's core capital ratio was 17.6% at end-2010, and the bank
reported a solid 19.6% total regulatory capital adequacy ratio at
end-H111, which allows non-performing loans to more than double
for OTPR to breach regulatory requirements.  This should provide
an adequate cushion even for the stress case scenario.  Liquidity
is linked to the stability of the retail deposit base, which is
price-sensitive and thus could be flighty.  The risk is mitigated
by the short-term retail book's strong liquidity.  Monthly cash
inflow totalled almost RUB5.5 billion (7% of its end-H111
liabilities) on average in H111.  In addition, OTPR could attract
as much US$200 million (another 8% of liabilities) from the parent
bank.

The rating actions are as follows:

OTPH

  -- Support Rating: affirmed at '3'

OTPR

  -- Long-term foreign currency IDR: affirmed at 'BB'; Outlook
     Stable
  -- Short-term foreign currency IDR: affirmed at 'B'
  -- Local currency Long-term rating: affirmed at 'BB'; Outlook
     Stable
  -- National Long-term rating: affirmed at 'AA-(rus)'; Outlook
     Stable
  -- Viability Rating: affirmed at 'b+'
  -- Individual Rating: affirmed at 'D'
  -- Support Rating: Affirmed at '3'
  -- Senior unsecured debt long-term rating affirmed at 'BB'
  -- Senior unsecured debt National rating affirmed at 'AA-(rus)'


* KARELIA REPUBLIC: Fitch Affirms 'BB-' Long-Term Currency Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed the Russian Republic of Karelia's Long-
term foreign and local currency ratings at 'BB-'.  The agency has
also affirmed the region's National Long-term rating at 'A+(rus)'
and Short-term foreign currency rating at 'B'.  The Outlooks on
the Long-term ratings are Stable.  The rating action also affects
Karelia's outstanding domestic bonds of RUB2.3 billion.

The affirmation reflects Fitch's expectation of a stable operating
performance at around 10% over the medium term, despite volatility
due to high tax concentration, and a manageable level of direct
risk.

Fitch notes that an improvement in the operating margin to above
10% level and stabilization of direct risk at below 40% of current
revenue in the medium term in tandem with shrinking annual debt
servicing would be positive for the rating.  Conversely, a sharp
deterioration of operating performance leading to significant
worsening of debt and debt coverage ratios would lead to downward
rating pressure.

The local economy rebounded with an estimated 8.5% growth of GRP
in 2010 after declining by 12.4% a year earlier.  However, the
region's budget remains exposed to volatile business cycles in
metals and pulp and paper industries.  Karelia experienced
significant volatility of corporate income tax (CIT) proceeds in
2009-2010.  CIT proceeds dropped by more than three times in 2009
and rebounded by more than three times in 2010.  The region's
budgetary performance is highly dependent on federal financial
support during such negative shocks.

Based on actual budget execution results for H111, Fitch expects
continued improvement of Karelia's budgetary performance from 2011
onwards with the operating margin exceeding 9%, underpinned by
continued growth of tax proceeds.  In 2010, tax revenue increased
by 40%, compensating for an 11% decrease of current transfers from
the federal budget, and led to a swift recovery of the operating
margin to 8.6% from -0.6% a year earlier.

Simultaneously, the administration has managed to limit the growth
of operating expenditure in 2010 at 4.5% below the annual
inflation rate.  Fitch notes that sustaining a sound operating
margin at above 10% in the medium term is subject to the
administration's commitment to limit growth of operating
expenditure below the growth of operating revenue.

Fitch expects direct risk to gradually decline to about 30% of
current revenue by 2013.  Karelia's direct risk increased to
RUB8.5 billion in 2010 from RUB6 billion in 2009.  In relative
terms, direct risk remained at a manageable level of 39% of
current revenue in 2010.  Fitch assesses the region's immediate
refinancing needs as moderate at RUB1.3 billion or 19% of direct
risk in 2011, fully countered by cash reserves accumulated by the
region.

The republic of Karelia is located in the northwest of the Russian
Federation and accounted for 0.3% of Russia's GDP in 2009.
Karelia's 646,000 inhabitants represented about 0.5% of the
national population.


* ULYANOVSK REGION: Fitch Affirms BB- Long-Term Currency Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed Ulyanovsk Region's Long-term foreign
and local currency ratings at 'BB-' and Short-term foreign
currency rating at 'B'.  The agency also affirmed the region's
National Long-term rating at 'A+(rus)'.  The Outlooks on the Long-
term ratings are Stable.

The affirmations reflect satisfactory budgetary performance, low
direct risk and low contingent liabilities.  However, the ratings
also factor in a weak socio-economic profile and modest self-
financing capacity of capital outlays.

Fitch notes that an improvement of the region's operating balance
to about 10% of operating revenue, coupled with maintenance of
moderate indebtedness, would be positive for the ratings.
Conversely, downward rating pressure would arise from
deterioration of budgetary performance leading to unfavorable debt
and debt coverage ratios.

Fitch expects restoration of Ulyanovsk's budgetary performance
with margins improving to 8%-9% in 2011-2013.  The region's
budgetary performance temporarily deteriorated with operating
balance dropping to 1.8% of operating revenue in 2010 (2009: 9%),
due to increased pressure from the spending side of the budget,
despite healthy growth of taxes.  Fitch notes that the
administration's ability to control operating expenditure below
the annual growth rate of operating revenue in the medium term
will support the ratings.

Capital outlays amounted to 20% of total spending in 2010,
decreasing from 27% in 2009.  Despite completion of its major
infrastructure projects, Ulyanovsk maintained a relatively healthy
level of capex in 2010 among its 'BB-' rated peers.  However the
region's self-financing capacity on capital investment projects
remained low as the current balance covered only 5.6% of capex in
2010, while federal capital transfers contributed 70.4% of capex
funding.

Fitch expects the region's direct risk to moderately increase in
2011-2013, remaining at about 15%-18% of current revenue.  The
region's direct risk increased insignificantly to RUB2.7 billion
in 2010 from RUB2.1 billion in 2009, remaining at a relatively low
level of 10.3% of current revenue.  Low-cost federal budget loans
represented 71% of the region's direct risk stock in 2010, with
the remainder comprising credit lines from commercial banks.

Fitch assesses the region's immediate refinancing risk as low due
to extended maturities of both budget and bank loans stretching
till 2012-15.  The region's contingent risk is low and solely
composed of the debt of region's public-sector entities.  This
totalled a negligible RUB24 million in 2010 and is fully self-
serviced by the companies.

Ulyanovsk, in the centre of European Russia, is part of the
Privolzhskiy Federal District.  It contributed 0.5% of national
GDP in 2009 and accounted for 0.9% of the country's population.


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


AYT NOVACAIXAGALICIA: DBRS Assigns 'BB' Rating on Series B Notes
----------------------------------------------------------------
DBRS, Inc. has assigned the following ratings to notes issued by
AyT NOVACAIXAGALICIA HIPOTECARIO I, FTA:

-- EUR1,290 million Series A rated AAA (sf)
-- EUR210 million Series B rated BB (sf)

The receivables securitized in the transaction consist of
obligations arising under mortgage loans to individuals secured by
residential properties.  The mortgages were originated by Caixa de
Aforros de Galicia, Vigo, Ourense e Pontevedra
("Novacaixagalicia").

The ratings are based upon review by DBRS of the following
analytical considerations:

    * The transaction's capital structure and the form and
sufficiency of available credit enhancement.

    * Relevant credit enhancement in the form of subordination, a
reserve fund and excess spread.  Credit enhancement levels are
sufficient to support DBRS projected expected cumulative net loss
(CNL) assumption under various stress scenarios for the rated
Series.

    * Novacaixagalicia's capabilities with respect to
originations, underwriting, servicing, and financial strength.

    * The credit quality of the collateral and ability of the
Servicer to perform collection activities on the collateral.

    * The ability of the transaction to withstand stressed cash
flow assumptions and repay investors according to the terms of the
transaction documents.

    * The legal structure and presence of legal opinions
addressing the assignment of the assets to the issuer and the
consistency with the DBRS Legal Criteria for European Structured
Finance Transactions.


BBVA-4 FTPYME: Fitch Affirms 'CCC' Rating on Class C Notes
----------------------------------------------------------
Fitch Ratings has affirmed BBVA-3 FTPYME and BBVA-4 PYME as
follows:

BBVA-3 FTPYME

  -- EUR55m Series A2(G) (ES0310110012) affirmed at 'AAAsf';
     Outlook Stable
  -- EUR18m Series B (ES0310110020) affirmed at 'A+sf', Outlook
     revised to Stable from Negative
  -- EUR8m Series C (ES0310110038) affirmed at 'BBsf'; Outlook
     Negative

BBVA-4 PYME

  -- EUR46m Class A2 (ISIN ES0370458012) affirmed at 'AAAsf';
     Outlook Stable
  -- EUR18m Class B (ISIN ES0370458020) affirmed at 'AAsf',
     Outlook revised to Stable from Negative
  -- EUR27m Class C (ISIN ES0370458038) affirmed at 'CCC', 'RR5'

The affirmation of BBVA-3 reflects its stable performance and
increased levels of credit enhancement (CE) due to structural
deleveraging.  The current level of CE for the notes stands at
42%, 20% and 10%, respectively.  Defaults have declined to
EUR7 million currently versus EUR8.3 million a year ago.  Long
dated delinquencies have also decreased and are at low levels.
The reserve fund has increased over the past year to EUR8 million
currently but is still below the required minimum of EUR10.8
million.

The affirmation of BVA-4 PYME reflects sufficient levels of CE to
support the ratings of the notes.  The long dated delinquency
buckets have reduced due to impairments rolling into default.  The
transaction reserve fund has declined to EUR3.4 million from
EUR7.7 million over the past year as a result of provisioning for
rising defaults.  However, the Class A2(G) and B notes have built
up strong CE, 53% and 33% respectively, and could withstand a
number of loans defaulting, including the largest borrowers.  In
addition, the Class A2 notes are expected to pay down within a
year as their current balances represent only 5% of the original
value.

Fitch notes that as the transactions have almost amortized,
exposure to tail risk as well as real estate and construction
sectors is a concern.  Additionally, obligor concentration is
rising as the portfolios continue to delever.  The top 10 obligors
account for 16% of BBVA-3 and 21% of BBVA-4 outstanding balance.
However, the current levels of CE are sufficient to withstand
Fitch's obligor concentration stresses with conservative recovery
assumptions.

Fitch has revised the Issuer Report Grade (IRG) for BBVA-4 PYME to
"Poor" (one star) the issuer, based on the provided reports.  The
reports do not meet several standards for a higher grade including
information on portfolio stratification and counterparties
triggers.


BBVA HIPOTECARIO: Fitch Affirms 'BBsf' Rating on EUR14.3MM Notes
----------------------------------------------------------------
Fitch Ratings has affirmed BBVA Hipotecario 3, FTA's notes as
follows:

  -- EUR210,266,460 class A2 notes (ISIN ES0314227010): affirmed
     at 'AAAsf', Outlook Stable
  -- EUR46,525,861 class B notes (ISIN ES0314227028): affirmed at
     'Asf', Outlook revised to Stable from Negative
  -- EUR14,300,000 class C notes (ISIN ES0314227036): affirmed at
     'BBsf', Outlook revised to Stable from Negative

The affirmation reflects the notes' increasing credit enhancement
levels due to the structural deleveraging alongside the
transaction's improved performance since the last rating action in
November 2010.  Additionally, the transaction benefits from a
EUR18.2 million subordinated line of credit agreement with Banco
Bilbao Vizcaya Argentaria (BBVA; 'AA-'/Stable/'F1+'), which may be
drawn to account for any defaults in the collateral portfolio.

Fitch has also revised the class B and C notes' Outlooks to Stable
from Negative, as their credit enhancement levels can withstand
the agency's 'A' and 'BB' rating stress scenarios respectively,
with a significant cushion.

The current defaults on principal in the portfolio have decreased
to EUR12.88 million from EUR13.68 million since the last rating
action and represent 4.7% of the outstanding balance.  Both 90+
day and 180+ day loans in arrears have also decreased to EUR2.38
million and EUR1.03 million from EUR4.92 million and EUR1.45
million, respectively, since the last rating action.  Currently,
90+ and 180+ delinquent loans account for 0.87% and 0.38% of the
outstanding portfolio balance, respectively.

100% of the collateral portfolio is secured on first-ranking
mortgages, allowing for potentially high recovery rates on the
defaulted assets.  Total recoveries currently account for 38% of
the total defaults since closing.  However, this figure has been
increasing since the last rating action as recoveries are realized
on defaulted loans.

The transaction benefits from 50bps guaranteed excess spread via
an interest rate swap agreement between the issuer and BBVA.

BBVA Hipotecario 3 FTA is a securitization of loans originated by
BBVA and granted to Spanish SMEs and self employed individuals.
The transaction is relatively granular at an obligor level with
the 10 largest obligors accounting for 7.8% of the outstanding
balance, whereas 22% of the portfolio is originated in Andalucia.

Fitch has assigned an Issuer Report Grade (IRG) of One Star "poor"
to reflect the quality of investor reporting.  Fitch notes that
the investor reports provide sufficient details on a monthly basis
regarding the transaction, but lack information concerning the
portfolio's industry stratification and the counterparty rating
triggers.


HIPOCAT: Fitch Keeps 'Csf' Ratings on Two Note Classes
------------------------------------------------------
Fitch Ratings has maintained four Hipocat transactions (Hipocat 7-
10), a series of Spanish RMBS transactions, on Rating Watch
Negative (RWN).

Following its review of the transactions in July 2011, the agency
maintained the RWN due to concerns over payment interruption in
these transactions.  The originator, Caixa d'Estalvis de
Catalunya, Tarragona i Manresa (Catalunya Banc) acts as the
servicer in these transactions, and is not a Fitch-rated entity.
The RWN on the eight tranches of Hipocat 7-10 that are rated above
'Asf' reflect Fitch's concern over the increased payment
interruption risk to which these deals may be exposed, should
Catalunya Banc default.  The transactions have been utilizing
their reserve funds to provision for defaulted loans and therefore
such funds may not be available to provide liquidity to support
timely note payments in the event of a default of Catalunya Banc.

Fitch understands that Catalunya Banc has made progress in the
implementation of remedial actions to mitigate the payment
interruption concerns. However, these are not yet finalized, so
the RWN is being maintained. The agency will continue to closely
monitor the process and will take further rating actions as deemed
necessary.

The rating actions are as follows:

Hipocat 7, Fondo de Titulizacion de Activos:

  -- Class A2 (ISIN ES0345783015) 'AAAsf'; RWN maintained
  -- Class B (ISIN ES0345783023) 'AAAsf'; RWN maintained
  -- Class C (ISIN ES0345783031) 'AAsf'; RWN maintained
  -- Class D (ISIN ES0345783049) 'BBB+sf'; Outlook Negative;
     rating unaffected

Hipocat 8, Fondo de Titulizacion de Activos:

  -- Class A2 (ISIN ES0345784013) 'AAAsf'; RWN maintained
  -- Class B (ISIN ES0345784021) 'AA+sf'; RWN maintained
  -- Class C (ISIN ES0345784039) 'Asf'; Outlook Stable; rating
     unaffected
  -- Class D (ISIN ES0345784047) 'BBsf'; Outlook Negative; rating
     unaffected

Hipocat 9, Fondo de Titulizacion de Activos:

  -- Class A2a (ISIN ES0345721015) 'AAAsf'; RWN maintained
  -- Class A2b (ISIN ES0345721023) 'AAAsf'; RWN maintained
  -- Class B (ISIN ES0345721031) 'Asf'; Outlook Negative; rating
     unaffected
  -- Class C (ISIN ES0345721049) 'BBBsf'; Outlook Stable; rating
     unaffected
  -- Class D (ISIN ES0345721056) 'CCCsf'; Recovery Rating 'RR4';
     rating unaffected
  -- Class E (ISIN ES0345721064) 'Csf'; Recovery Rating 'RR6';
     rating unaffected

Hipocat 10, Fondo de Titulizacion de Activos:

  -- Class A2 (ISIN ES0345671012) 'Asf'; Outlook Negative; rating
     unaffected
  -- Class A3 (ISIN ES0345671020) 'Asf'; Outlook Negative; rating
     unaffected
  -- Class A4 (ISIN ES0345671038) 'AA-sf'; RWN maintained
  -- Class B (ISIN ES0345671046) 'BBsf'; Outlook Negative; rating
     unaffected
  -- Class C (ISIN ES0345671053) 'CCsf'; Recovery Rating 'RR5';
     rating unaffected
  -- Class D (ISIN ES0345671061) 'Csf'; Recovery Rating 'RR6';
     rating unaffected


TDA 27: S&P Lowers Rating on Class D Notes to 'D (sf)'
------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CCC
(sf)' its credit rating on TDA 27, Fondo de Titulizacion de
Activos' class D notes, following an interest payment default on
the September 2011 payment date. The ratings on all other classes
of notes in this transaction are unaffected.

In September 2009, TDA 27 completely depleted its cash reserve as
a result of the rapid growth of defaults and a structural
mechanism that requires a full provisioning for defaulted loans
(defined in this transaction as loans in arrears for more than 12
months).

The class B, C, D, and E notes' interest-deferral trigger levels
are 11.4%, 8.6%, 5.5%, and 4.2%. As of August 2011, the ratio of
cumulative defaults over the original balance was 5.60% (compared
with 4.38% a year earlier). "As a result, the class D notes missed
their interest payment on this latest payment date. We have
therefore lowered our rating on the class D notes to 'D (sf)',"
S&P related.

TDA 27 is a residential mortgage-backed securities (RMBS)
transaction that closed in December 2006. It securitizes a
portfolio of residential mortgage loans secured over properties in
Spain. The originators of this transaction are four Spanish
financial entities: Caixa d'Estalvis de Terrassa, Caja General de
Ahorros de Granada, Caja Vital Kutxa, and Union de Credito para la
Financiacion Mobiliaria e Inmobiliaria, Credifimo, E.F.C., S.A.U.
(Credifimo). The loans were mainly originated in Andalucia,
Catalonia, and Madrid.

Ratings List

TDA 27, Fondo de Titulizacion de Activos
EUR930.6 Million Mortgage-Backed Floating-Rate Notes

Class            Rating
           To               From

Rating Lowered

D          D (sf)           CCC (sf)

Ratings Unaffected

A2         AA (sf)
A3         AA (sf)
B          A (sf)
C          BB (sf)
E          D (sf)
F          D (sf)


THOMAS COOK: Strike Ballot Raises Further Debt Covenant Woes
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the U.K.'s largest
union said it will hold a strike ballot for the cabin crew
employees of Thomas Cook Group PLC, as workers seeks better
severance terms for up to 498 workers who may lose their jobs,
even though potential strike action and disruptions could raise
concerns about the tour operator's ability to meet its debt
obligations.


* SPAIN: Moody's Reviews Notes Issued by Seven RMBS for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade certain classes of notes issued by seven Spanish
residential mortgage-backed securities (RMBS) transactions
following performance concerns. The transactions affected are:

- Bankinter 12 FTH, Bankinter 13 FTA and Bankinter 16 FTA.

- Foncaixa Hipotecario 9 FTA and Foncaixa Hipotecario 10 FTA.

- FTA Santander Hipotecario 2 and

- Hipotebansa XI FTA.

RATINGS RATIONALE

Moody's considered these four indicators when evaluating the
performance of the deals: (i) the amount and evolution of
cumulative defaults that have already occurred; (ii) delinquency
levels; (iii) the evolution of credit enhancement since closing;
and (iv) the comparison between projected defaults or losses and
the credit enhancement level. As part of the analysis Moody's
stress-tested its current assumption for these transactions,
considering collateral performance to date and the future outlook
for the Spanish RMBS sector.

In addition to the transaction-specific analysis, Moody's also
considered the macroeconomic factors that influence borrowers'
ability to repay their debt, such as GDP growth and the evolution
of the real-estate market. Spanish GDP contracted by 3.7% in 2009
and 0.1% in 2010. Moody's expects only 0.7% growth in GDP in 2011
and believes that Spain will not have the same level of GDP that
it had in 2008, until at least 2013.

The Spanish government is under significant pressure to tighten
its budgetary position. Higher taxes on companies will place
negative pressure on SME profitability, which will be negative for
unemployment. Higher taxes on consumers will reduce household
disposable income. House prices fell 5.2% year on year in Q2 2011
and are currently 16.6% below their Q2 2008 peak. Moody's expects
that house prices will continue to fall in 2011 and 2012, which
will reduce the recovery value of defaulted mortgages. In light of
the economic environment, Moody's outlook for Spanish RMBS
collateral performance remains negative.

The seven transactions placed on review for possible downgrade are
showing weaker-than-expected performance and current credit
enhancement under the flagged tranches may not be sufficient to
withstand performance deterioration. As a result, Moody's has
placed some notes of these transactions on review for possible
downgrade.

In order to complete the review, Moody's will reassess the
portfolios lifetime loss expectations, taking into account the
collateral performance to date and the future macro-economic
environment. Moody's will also request updated loan-by-loan
information to revise its Milan Aaa credit enhancement. Loan-by-
loan information will also be used to validate its assumptions
with regards to which loans have a higher propensity to default.
The lifetime loss and the Milan Aaa credit enhancement are the key
parameters that Moody's uses to calibrate its loss distribution
curve, which is one of the core inputs into Moody's cash-flow
model.

TRANSACTION PERFORMANCE

Bankinter 12 FTH, Bankinter 13 FTA and Bankinter 16

Moody's has placed the relevant notes in these transactions on
review for possible downgrade because of the low levels of credit
enhancement in the face of deteriorating performance. The three
deals correspond to securitization of Spanish RMBS loans
originated by Bankinter S.A. (A2/P-1).

Performance in these deals is weaker compared to other RMBS deals
within the series. 90+ delinquency levels stood at 0.76%, 0.58%
and 0.87% as of June in the case of Bankinter 12 and 16 and July
2011 in the case of Bankinter 13, when cumulative default rate as
reported by the gestora plus outstanding repossessions had reached
0.44%, 0.73% and 0.66%, respectively (please note that some of the
loans corresponding to repossessions may be included in cumulative
default figure reported by the gestora). Pool factors stood at
57.73%, 63.67% and 78.25% as of the same date.

Foncaixa Hipotecario 9 FTA and Foncaixa Hipotecario 10 FTA

Moody's has placed the relevant notes in these transactions on
review for possible downgrade because of the low levels of credit
enhancement in the face of deteriorating performance. The two
deals correspond to securitization of Spanish RMBS loans
originated by La Caixa (now Caixabank Aa2/P-1 on review for
downgrade).

Performance in these deals is weaker compared to other RMBS deals
within the series. 90+ delinquency levels stood at 1.13% and 0.60%
as of June 2011, when cumulative default rate had reached 0.58%
and 0.40% respectively. Pool factors stood at 50.38% and 63.46% as
of the same date.

FTA Santander Hipotecario 2

Moody's has placed the relevant notes in this transaction on
review for possible downgrade because of the decreasing levels of
credit enhancement, insufficient to absorb potential increase of
loss assumption. The reserve fund is fully drawn and there was an
unpaid PDL of EUR 11.83 million as of August 2011. This deal
corresponds to securitization of Spanish RMBS loans originated by
Banco Santander S.A. (Aa2/P-1).

90+ delinquency levels stood at 1.72% as of July 2011, when
cumulative default rate (inclusive of repossessions) had reached
3.19%. Pool factor stood at 54.39% as of the same date.

Hipotebansa XI FTA

Moody's has placed tranche B on review for downgrade because of
the very low level of credit enhancement to absorb potential
increase of loss assumption. This deal corresponds to
securitization of Spanish RMBS loans originated by Banco Santander
S.A. (Aa2/P-1).

90+ delinquency levels stood at 0.70% as of August 2011, when the
cumulative default rate (taking cumulative delinquencies over 6
months as a proxy, as the deal does not include a default
definition) had reached 0.63%. Pool factor stood at 25.73% as of
the same date. In spite of a relative stable performance observed
in this transaction so far Moody's believes that the current
expected loss assumption is low in consideration of the current
macroeconomic environment.

RATING METHODOLOGIES

The principal methodology used in this rating was Moody's Approach
to Rating RMBS in Europe, Middle East, and Africa published in
October 2009. Please see the Credit Policy page on www.moodys.com
for a copy of this methodology.

Other methodologies used include "Revising Default/Loss
Assumptions Over the Life of an ABS/RMBS Transaction" published in
December 2008.

AFFECTED TRANCHES

Issuer: BANKINTER 12 FONDO DE TITULIZACION HIPOTECARIA

   -- EUR655.1M A2 Notes, Aaa (sf) Placed Under Review for
      Possible Downgrade; previously on Mar 7, 2006 Definitive
      Rating Assigned Aaa (sf)

   -- EUR13.1M B Notes, Aa3 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 7, 2006 Definitive Rating
      Assigned Aa3 (sf)

   -- EUR11.9M C Notes, A3 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 7, 2006 Definitive Rating
      Assigned A3 (sf)

   -- EUR11.3M D Notes, Ba1 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 7, 2006 Definitive Rating
      Assigned Ba1 (sf)

Issuer: BANKINTER 13 FONDO DE TITULIZACION DE ACTIVOS

   -- EUR24.1M C Notes, A3 (sf) Placed Under Review for Possible
      Downgrade; previously on Nov 22, 2006 Definitive Rating
      Assigned A3 (sf)

   -- EUR20.5M D Notes, Ba1 (sf) Placed Under Review for Possible
      Downgrade; previously on Nov 22, 2006 Definitive Rating
      Assigned Ba1 (sf)

Issuer: Bankinter 16 Fondo de Titulizacion de Activos

   -- EUR46M B Notes, Aa2 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 11, 2008 Definitive Rating
      Assigned Aa2 (sf)

   -- EUR38M C Notes, A3 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 11, 2008 Definitive Rating
      Assigned A3 (sf)

   -- EUR34M D Notes, Ba2 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 11, 2008 Definitive Rating
      Assigned Ba2 (sf)

Issuer: FONCAIXA HIPOTECARIO 9 Fondo de Titulizacion de Activos

   -- EUR29.2M B Notes, A1 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 30, 2006 Definitive Rating
      Assigned A1 (sf)

   -- EUR7.6M C Notes, Baa2 (sf) Placed Under Review for Possible
      Downgrade; previously on Mar 30, 2006 Definitive Rating
      Assigned Baa2 (sf)

Issuer: Foncaixa Hipotecario 10 Fondo de Titulizacion de Activos

   -- EUR30M B Notes, Aa3 (sf) Placed Under Review for Possible
      Downgrade; previously on May 25, 2007 Definitive Rating
      Assigned Aa3 (sf)

   -- EUR12M C Notes, Baa2 (sf) Placed Under Review for Possible
      Downgrade; previously on May 25, 2007 Definitive Rating
      Assigned Baa2 (sf)

Issuer: Fondo de Titulizacion de Activos SANTANDER HIPOTECARIO 2

   -- EUR51.8M B Notes, Aa3 (sf) Placed Under Review for Possible
      Downgrade; previously on Nov 12, 2009 Confirmed at Aa3 (sf)

   -- EUR32.3M C Notes, A3 (sf) Placed Under Review for Possible
      Downgrade; previously on Nov 12, 2009 Confirmed at A3 (sf)

   -- EUR49.8M D Notes, Ba2 (sf) Placed Under Review for Possible
      Downgrade; previously on Nov 12, 2009 Downgraded to Ba2
      (sf)

   -- EUR19.6M E Notes, Caa2 (sf) Placed Under Review for
      Possible Downgrade; previously on Nov 12, 2009 Downgraded
      to Caa2 (sf)

Issuer: HIPOTEBANSA 11 FONDO DE TITULIZACION DE ACTIVOS

   -- EUR15.5M B Notes, A2 (sf) Placed Under Review for Possible
      Downgrade; previously on Dec 9, 2002 Definitive Rating
      Assigned A2 (sf)


* Fitch Says Spain Rating Cut Won't Hit Non-Financial Corporates
----------------------------------------------------------------
Fitch Ratings says that its two-notch downgrade of Spain to 'AA-
'/Negative will not directly result in any rating action for non-
financial Spanish corporates.  Similarly, the agency noted today
that no actions on Italian corporate ratings would be taken as a
direct result of the downgrade of Italy's Long-term IDR to
'A+/Negative'.

Fitch laid out its expectations for the interaction between
peripheral euro zone corporate ratings and sovereign ratings in
'Euro-zone Sovereign Pressures and Corporates - April 2011.'  This
recognised that entities in the euro zone periphery benefit from a
number of factors which allow them to potentially be rated well
above the rating of their sovereign, especially if this falls into
the 'B' category or below.  These include supranational legal
frameworks and a common currency.

This expectation does not preclude companies in these countries
being downgraded for performance reasons that may be linked to
economic growth.  Weak Spanish growth expectations were a factor
in the recent downgrade of Telefonica SA from 'A-'/Negative to
'BBB+'/Stable.

Fitch rates the following companies in Spain:

  -- Abengoa S.A. ('BB'/Stable)
  -- Cableuropa S.A. ('B'/Stable)
  -- Enagas S.A. ('A+'/Stable)
  -- Endesa S.A. ('A-'/Stable)
  -- Ferrovial S.A. ('BBB-'/Stable)
  -- Gas Natural SDG, S.A. ('A-'/Stable)
  -- Hidroelectrica del Cantabrico - Hidrocantabrico ('BBB+'/RWN)
  -- Iberdrola S.A. ('A-'/Stable)
  -- Obrascon Huarte Lain ('BB-'/Stable)
  -- Red Electrica Corporacion ('A'/Stable)
  -- Repsol YPF ('BBB+'/Stable)
  -- Telefonica SA ('BBB+'/Stable)


===========
S W E D E N
===========


FERROMET: Restructuring Deadline Extended Until End of November
---------------------------------------------------------------
Metal Bulletin reports that a Ferromet spokesman said the deadline
for the company to complete its restructuring has been extended
until the end of November to allow more time for potential buyers
to carry out due diligence on its chrome assets.

The company -- which has outstanding debts to suppliers, customers
and a bank -- received approval for a restructuring in June, Metal
Bulletin recounts.  The spokesman told Metal Bulletin in August
that it will sell its underperforming chrome assets -- a
concentrator plant and a mine in Kosovo and Albania -- and it
intends to pay all its creditors.

The spokesman, as cited by Metal Bulletin, said that the company
does have potential buyers for the assets but an initial deadline
at the end of August did not allow sufficient time for them to
carry out due diligence.

Ferromet had debts totalling SEK52.7 million (US$7.8 million),
Metal Bulletin says, citing documents filed with Sweden's
bankruptcy court and dated June 23.  However, it has already paid
its debts to warehousing companies to ensure the free movement of
material, Metal Bulletin notes.  Some other debts may have already
been settled, MB understands.  The chrome assets are valued at
SEK20.5 million and the subsidiary owes the parent company SEK8.3
million, Metal Bulletin discloses.

Ferromet is a trading house.


NOBINA: Moody's Changes Outlook on 'B2' Rating to Negative
----------------------------------------------------------
Moody's Investors Service has changed the outlook on Nobina's B2
Corporate family rating (CFR) and Probability of default rating
(PDR) to negative from stable.

RATINGS RATIONALE

The outlook change to negative was prompted by concerns about the
company's tightened liquidity profile as a result of the
approaching maturity of its EUR85 million senior notes in
August 2012 and the high execution risk of a successful
refinancing in the current market environment and in absence of
sufficient alternative liquidity sources. In Moody's view, Nobina
might eventually consider an exchange offer for the senior notes
which could result in an impaired position of the noteholders. The
EUR85 million senior notes are not rated by Moody's.

In addition, the negative outlook considers the company's
relatively weak operating performance and cash flow generation in
Q2 2011/12 (fiscal year ends February 28) and the risk that this
development cannot be reversed in the second half of 2011/12.

While Nobina's revenues increased by 9.9% y-o-y in Q2 2011/12
benefiting from an overlap from new and terminated contracts,
Nobina's reported operating profit declined by SEK23 million y-o-y
to SEK67 million mainly as a result of high contract migration
which lead to higher start-up and maintenance costs, continued
weak operating results in Norway and Denmark as well as declining
passenger demand affecting its interregional traffic company
Swebus. Driven by lower operating cash flow generation and a
seasonal working capital build-up, cash on balance sheet reduced
to only SEK124 million compared to SEK225 million at fiscal year-
end 2011/2012.

As a result, credit metrics such as net debt/EBITDA of 5.9x and
interest cover (EBIT/interest expense) of 0.9x at 31 August 2011
continue to position the company weakly in its rating category.

The B2 rating assumes that the company will be able to gradually
improve profitability and free cash flow generation in the second
half of 2011/12 driven by (i) a lower contract migration rate
which should reduce start-up and maintenance costs compared to the
first half of 2011/12, (ii) cost improvements from implemented
measures to improve overall operating efficiency, (iii) no
material extraordinary costs expected from severe winter
conditions compared to around SEK60 million in the previous year,
(iii) and a reversion of the seasonal working capital build-up
which should facilitate positive FCF generation. Overall, this
should result in stable reported EBIT margin of around 3.5%,
positive FCF generation and modest improvements in net debt/EBITDA
in fiscal year 2011/12.

In absence of any committed long-term revolving credit facilities,
the company's liquidity is limited to available cash on balance
sheet of SEK124 million at 31 August 2011 and operating cash flow
generation. These cash sources are currently insufficient to cover
debt maturities of SEK1,098 million for the next 12 months of
which SEK762 million relate to the senior notes due 01 August 2012
and the remainder to short-term financial leasing liabilities.

Moody's points out that leverage improvements are limited due to
the inherent characteristics of Nobina's business model, as a
significant proportion of debt is linked to fleet leasing
liabilities that closely correlate to the size of a company's
contract portfolio and are easily reduced in case of a contract
loss.

TRIGGERS FOR A POTENTIAL DONWGRADE/UPGRADE

Further rating pressure would arise in case of (i) the company's
inability to successfully refinance the EUR85 million senior notes
due August 2012 in the next six months and to improve its weak
liquidity profile as well as in case of (ii) an continued erosion
in the group's operating performance leading to negative free cash
flow generation, net debt/EBITDA above 6.0x and (EBITDA-
capex)/interest expense not staying materially above 1.0x (1.4x
per last twelve months August 2011).

A rating upgrade is currently unlikely and would require longer-
term improvements in Nobina's credit profile, reflected in an
(EBITDA-capex)interest expense ratio towards 2.0x and net
debt/EBITDA trending towards 4.5x. Longer-term rating improvements
also require that the company's liquidity profile will be further
strengthened by the establishment of an alternative back-up
liquidity facility. Furthermore, longer-term improvements in the
company's business profile, such as more balanced geographic
diversification and segmental diversification, could result in an
upgrade.

Other factors considered in Nobina's B2 rating are (i) the
company's position as the largest Nordic bus transportation group
with a significant proportion of business with local Scandinavian
communities with relatively high revenue visibility and
predictability due to limited transportation volume exposure; (ii)
the group's track record of improving operating performance from
the lows in 2007, which was supported by the defensive character
of the public bus transportation industry; (iii) but also the
group's limited scale with revenues and profit generation being
concentrated on the Swedish market.

Nobina is the largest Nordic bus transportation company, operating
in Sweden, Norway, Finland and Denmark. Its revenues for fiscal
year 2010/11 (ending February 28) totaled SEK6.5 billion and were
mostly generated from public bus services. Over 70% of the group's
revenues are generated in Sweden, although this reflects the more
advanced stage of deregulation in this country, where almost all
local and regional bus services have been tendered since 1989, in
contrast to the situation in Norway and Finland, where less than
50% of the traffic has been tendered so far. In Sweden, the public
bus transportation needs of Contractual Public Transportation
Associations (CPTAs) are put up for tender via a competitive
bidding process and the tenor of such contracts is typically five
to eight years. The majority of contracts are priced with cost
indexation levels adjusted on monthly, quarterly or annual basis.

Nobina's ratings were assigned by evaluating factors that Moody's
believed to be relevant to the issuer's credit profile, such as
(i) the issuer's business risk and competitive position; (ii) its
capital structure and financial risk; (iii) the issuer's projected
performance over the near to intermediate term; and (iv) its
history of achieving consistent operating performance and meeting
budget or financial plan goals. These attributes were compared
with other issuers both within and outside of Nobina's core peer
group. Moody's believes that Nobina's ratings are comparable to
ratings assigned to other issuers of comparable credit risk.


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


HEX HOLDINGS: Movac Group Acquires Firm Out of Administration
-------------------------------------------------------------
coventrytelegraph.net reports that Movac Group acquired Hex
Holdings just weeks after administrators were called in to find a
buyer for the company's business.

As reported in the Troubled Company Reporter-Europe on Sept. 12,
2011, AM Online said administrators from MCR have been called in
to Hex Holdings.  Matt Ingram and John Whitfield, partners at
corporate restructuring firm MCR, were appointed joint
administrators for the company.

All four members of staff have kept their jobs at the plant, based
on the Bilton Industrial Estate, and the new owners have created
an additional two new positions as well as promising more jobs in
the future, according to coventrytelegraph.net.

Movac Group sells both vehicle refinishing materials as well as a
wide range of industrial products to the wood finishing, metal
coating and general industrial sectors.

Leicestershire-based Hex Holdings is a nationwide distributor of
refinish materials to bodyshops.


MAN GROUP: Moody's Affirms (P)Ba1 Rating on US$300-Bil. Notes
-------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Man Group
plc; Man's current long term credit rating is Baa2 with a stable
outlook.

RATINGS RATIONALE

Despite the 8% decline in estimated funds under management (FUM)
including the US$2.6 billion in net outflows during the quarter
ended September 30, 2011 announced at the pre-close trading update
on September 28, 2011, Moody's believes that the fundamentals for
Man Group remain largely unchanged, while recognizing that macro-
economic conditions and market volatility present challenges in
the near to medium term. In Moody's opinion, the weaknesses that
Man experienced in the recent quarter reflect near term concerns
about market volatility and investor sensitivity over the mounting
Euro-zone crisis, which put pressure on performance and
exacerbated outflows primarily in GLG's equity side of the
business.

Moody's believes that Man is still facing some headwinds in terms
of outflows, pressure on profit margins and challenges in
connection with the completion of GLG's integration. However, in
Moody's opinion, the recent debt reduction, strengthened liquidity
position and increased product and revenue diversification offset
the negative pressures on the company. In addition, in Moody's
view, the negative impact on Man's financial performance has not
been outsized relative to other industry players.

Part of the drop in estimated FUM in this quarter was attributed
to FX movements (US$1.9 billion) and the rest due to net outflows
(US$2.6 billion) and negative performance (US$1.5 billion). The
net outflows were primarily from GLG's long only and open-ended
funds, given the general market risk aversion, equity market
volatility and nature of these products. Moody's believes that the
rationale for Man's acquisition of GLG, which centered around
product and revenue diversification away from its AHL-centric
platform, and increased diversification of its investor base
should strengthen Man's position in the long term, despite the
evident near term market volatility and the current challenges.

Man is also in a strong liquidity position with a healthy net cash
position which is estimated at US$700 million as at September
2011. The recent debt buyback, which was completed in September
2011, has also served to reduce its overall level of indebtedness
by approximately US$345 million and annualized gross interest
expense by approximately US$20 million. Man has reported estimated
net management fee income of US$200 million for the six months
ending September 2011, down from US$242 million from the previous
six month period, which includes a reduction in associate income
following the sale of Man's interest in BlueCrest in March 2011.

Man continues to maintain a strong market position in the hedge
fund industry along with a strong underlying earnings stream,
which is backed by variable performance fees, coming from various
hedge fund products offering a diversity of investment styles.

Man Group plc is an asset management company domiciled in the UK,
specialized in the alternative investment management business. The
company had estimated total funds under management of US$65
billion as at September 30, 2011 and reported shareholders' equity
of US$4.3 billion at March 31, 2011.

Moody's rating rationale is detailed in Moody's Credit Opinion on
Man Group dated August 2011.

These ratings were affirmed:

- Man Group plc -- Long Term Credit Rating -- Baa2;

- Man Group plc - Subordinated Debt -- Baa3;

- Man Group plc - Perpetual Subordinated Capital Securities -
  Ba1(hyb)

- Man Group plc US$3 billion EMTN programme - Senior Notes -
  (P)Baa2;

- Man Group plc US$3 billion EMTN programme - Dated Subordinated
  Notes -- (P)Baa3;

- Man Group plc US$3 billion EMTN programme - Undated
  Subordinated Notes -- (P)Baa3;

- Man Group plc US$3 billion EMTN programme - Junior Subordinated
  Notes -- (P)Ba1

- Man Group plc US$3 billion EMTN programme - Short-Term Notes -
  (P)P-2.

The principal methodology used in this rating was Moody's Global
Rating Methodology for Asset Management Firms published in October
2007.


MAN GROUP: Fitch Affirms Hybrid Debt Rating at 'BB+'
----------------------------------------------------
Fitch Ratings has affirmed Man Group plc's Long-term Issuer
Default Rating (IDR) at 'BBB'.  The Outlook is Stable.

The ratings reflect Man's strong franchise in alternative
investment fund management, prudent liquidity management, a long
track record of solid, if volatile, cash generation, and the
expected synergies arising from its acquisition of GLG Partners,
Inc. in 2010.  The ratings consider the market, credit and
liquidity risks arising from exposures Man takes to its funds,
although these have been significantly reduced.  The ratings also
reflect Man's reduced financial flexibility and net cash position
following the acquisition of GLG and challenges facing the wider
hedge fund industry over fund performance and fund flows.

The most significant threat to the IDR would be material damage to
the franchise if Man suffered major losses of funds under
management (FUM) or key staff, from persistent poor fund
performance and any subsequent reputational damage or as the
result of sector-wide developments. Downward pressure would arise
from a material increase in leverage.

Fitch believes the acquisition of GLG should reinforce Man's
strong franchise through the diversification of its client base,
geographical reach and investment products, and its improved
scale.  However, the acquisition of GLG has also increased market
earnings volatility in Man's overall performance.  Margins remain
stable, reflecting Man's strong franchise and track record.
Although operating profitability improved in the year ending
March 31, 2011 (FY11), recent market volatility, leading to net
outflows of FUM will adversely affect profits. This is likely to
more than offset the benefits of cost restructuring and large new
institutional mandates.

Man has substantially reduced its risk appetite for and levels of
loans to its funds and seed capital investments since FY09.  The
agency views this as a positive move to cut exposure to credit and
market risks.  Man remains exposed to some contingent liquidity
risk from uncommitted credit lines to its funds.  The integration
of GLG appears to have been well managed, with no material loss of
FUM or key staff.

After the US$1.7 billion acquisition of GLG in October 2010, Man's
regulatory capital surplus, cash position and gross leverage have
weakened, but the group still maintains a net cash position.
Outstanding debt is fairly substantial at US$1.1 billion (end-FY11
adjusted for debt buyback), but did not rise on the acquisition.

The US$2.4 billion revolving credit facility (RCF) was replaced by
a five year committed US$1.5 billion RCF in July 2011.  It is
mainly used to extend short-term liquidity to funds during
redemptions.  The reduction is acceptable as it reflects the fall
in Man's stressed funding requirement due to the relatively low
need in the crisis and the shift towards more liquid content.

The rating actions are as follows:

Long-term IDR: affirmed at 'BBB'; Outlook Stable
Senior unsecured debt: affirmed at 'BBB'
Dated subordinated debt: affirmed at 'BBB-'
Hybrid debt: affirmed at 'BB+'


NORTEL NETWORKS: Prepares to Battle U.K., Irish, French Units
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that dishonest
assistance, unlawful means conspiracy, unconscionable receipt,
aiding and abetting breach of fiduciary duty--the charges being
hurled in Nortel Networks Corp.'s U.S. bankruptcy proceeding are
the stuff of which corporate potboilers are made.

                       About Nortel Networks

Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.

Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List).  Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.

The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164).  Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as the Chapter 15
petitioner's counsel.

Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case.  James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel.  The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.  Fred S. Hodara, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, in New York, and
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, represent the Official Committee of
Unsecured Creditors.

Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection.  On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A.  On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.

Nortel Networks divested off key assets while in Chapter 11.
Nortel has raised US$3.2 billion by selling its operations as it
prepares to wind up a two-year liquidation due to insolvency.

In June 2011, Nortel added US$4.5 billion to its cash pile after
agreeing to sell its remaining patent portfolio to Rockstar Bidco
LP, a consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation.  The consortium defeated a
US$900 million stalking horse bid by Google Inc. at an auction.
The deal closed in July.

Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court.  The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.


PINDAR PRESTON: Equipment Sale Raises GBP2 Million
--------------------------------------------------
Adam Hooker at PrintWeek reports that after Pindar went into
administration in July, a number of its businesses, including the
Preston plant, were closed with no buyer found.

The report notes that administrator KMPG appointed property
consultant Jones Lang LaSalle (JLL) to sell the plant and
machinery.  PrintWeek relates that three Heidelberg presses -- a
three-year-old, six-colour Speedmaster XL105 with double coater, a
four-year-old, 12-colour Speedmaster SM 102 with Cutstar and a
five-year-old, 10-colour Speedmaster SM 102 with Cutstar -- were
sold via a private treaty sale, raising around GBP1.5 million.
The report relays that the rest of the plant was sold in a one-day
online auction, which featured 380 lots, and which raised more
than GBP500,000.

PrintWeek notes that JLL said the disposal generated strong
domestic and international interest, with bids from as far afield
as Lebanon, Pakistan, Hong Kong, Spain, Germany and Romania.

However, Spencer Chapman, director of machinery and business
assets, said that the majority of the machinery was sold to UK
businesses, the report says.

GA Pindar Preston runs a sheet-fed printing facility and employs
72 people in total.  The firm produces a variety of work including
magazine and catalogue covers.  The Pindar Group also owns the
worldwide print shop franchise Alphagraphics Inc, headquartered in
Salt Lake City, Utah, in the US, and Pindar North America, the
multi-channel software provider.


PT MCWILLIAMS: In Administration, Seeks Deal With Creditors
-----------------------------------------------------------
4ni.co.uk reports that PT McWilliams has gone into administration
but it is hoped that the company will survive.

BBC News reported that PT McWilliams is trying to reach an
agreement with creditors, according to 4ni.co.uk.

The report relates that this agreement would see the creditors
accepting less than the full amount they are owed but it would
allow the firm to keep trading will little disruption.

4ni.co.uk notes that the administrators said they believe the firm
is likely to be profitable in the future.

But it is due to a lack of working capital that the company cannot
survive without the protection of an administration order, the
report says.

"This has been a difficult time for the company, but we are
heartened by the many expressions of support we have received in
recent days. . . . We wish to reassure our clients that they will
see no disruption to their contracts," the report quoted Martin
McWilliams, managing director of PT McWilliams, as saying.

PT McWilliams is a civil engineering firm based in County Tyrone.


SILVER STAR: Goes Into Administration, Cuts 12 Jobs
---------------------------------------------------
Louise Williams at Coach News reports that Silver Star Holidays
has gone into administration cutting 12 jobs in the process.

The company has blamed rising fuel costs and the knock on effect
of the economic downturn for its demise, according to Coach News.

The report discloses that in an official statement Silver Star
Holidays described how they were "devastated" at the closure and
how they had tried everything to prevent the business from going
into administration but have been forced to admit defeat due to
the economic climate and also spiraling fuel costs which were
squeezes their profit margins further.

The coach holiday operator is currently working with a consumer
protection service to help secure a refund for all customers who'd
paid for holidays with the coach trip provider, Coach News notes.

Silver Star Holidays is a Welsh coach holiday firm.  Silver Star
Holidays was a member of Bonded Coach Holidays (BCH).


* Lloyds Shortlists Buyers for U.K. Commercial Property Loans
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Lloyds Banking
Group PLC has shortlisted around four buyers for a GBP1 billion
($1.6 billion) portfolio of commercial property loans that the 41%
state-owned bank put on the block last month, a person familiar
with the situation said.


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


* EUROPE: Debt-Crisis Summit Postponed to October 23
----------------------------------------------------
James G. Neuger and Gabi Thesing at Bloomberg News report that
European leaders pushed back a debt-crisis summit amid opposition
to Germany's drive for deeper-than-planned Greek bond writedowns
that Luxembourg's Jean-Claude Juncker says may exceed 60%.

When asked on Austrian television late on Sunday to comment on
speculation investors may lose between 50% and 60% of the value of
their holdings, Luxembourg's prime minister, as cited by
Bloomberg, said "we're talking about even more."  He didn't
comment further.

The Oct. 18 meeting was postponed to Oct. 23 as Europe gropes
toward a master plan for dealing with Greece's oversized debt,
insulating the Spanish and Italian markets, and shielding banks
from the fallout, Bloomberg relates.

Bloomberg notes that Belgian Prime Minister Yves Leterme said
Europe needs a strategy for shoring up banks before unstitching a
July accord to cut Greek bond values by an average of 21%.

"It is a very sensitive item," Mr. Leterme said in a Bloomberg
Television interview at his Brussels residence on Sunday.  "You
can't at every European Council change the percentages and bring
supplementary problems to banks."

According to Bloomberg, a central bank official said on Sunday
opposition to bigger Greek debt writedowns is coming from the
European Central Bank, which is against any backsliding from the
July 21 accord on a second Greek bailout.  The official, as cited
by Bloomberg, said that an appeal to "fully implement all aspects"
of the July roadmap was inserted into last week's monthly policy
statement as a warning to Germany.


* EUROPE: ECB Supports Guarantee Option to Leverage Bailout Fund
----------------------------------------------------------------
Jeff Black at Bloomberg News reports that the European Central
Bank says the firepower of Europe's bailout fund should be
magnified by using government guarantees rather than the central
bank's money market operations.

The ECB says governments should use the EUR440-billion (US$603
billion) European Financial Stability Facility to insure a portion
of new bonds issued by debt-strapped nations, Bloomberg discloses.
That would leverage the amount available to protect member states
from the region's debt crisis, Bloomberg states.

EFSF resources "should be dedicated to enhance sovereign debt new
issuance of securities, thus multiplying their effect," Bloomberg
quotes ECB Vice President Vitor Constancio as saying in a speech
in Milan on Sunday.

According to Bloomberg, policy makers are trying to build a
"firewall" around large European countries like Italy and Spain
whose size would make them difficult to rescue if their debt
became unsustainable.  Bloomberg notes that ECB President Jean-
Claude Trichet opposes suggestions that the central bank should
lend to the EFSF to boost its capacity, saying such a move would
not be "appropriate."

The Frankfurt-based central bank maintains any such arrangement
would constitute monetary financing of governments, Bloomberg
notes.  A guarantee program would allow countries to access more
capital without the EFSF exhausting its finite capital reserves,
Bloomberg states.

"You could basically guarantee a country's issuance through a so-
called zero-coupon bond, assuring investors their capital is not
at risk," Bloomberg quotes James Nixon, chief European economist
at Societe Generale SA in London, as saying.  "The great advantage
is that it is leverage.  It is possible it amounts to four or five
times the size of the EFSF.  The disadvantage is that it is
essentially double or quits."

European leaders may discuss leveraging the EFSF during an
Oct. 23 meeting that gropes toward dealing with Greece's oversized
debt, insulating the Spanish and Italian markets, and shielding
banks from the fallout, Bloomberg says.

Bloomberg notes that while European Union Economic and Monetary
Affairs Commissioner Olli Rehn said on Oct. 3 that including the
ECB in leveraging plans was still on the table, the ECB has
underlined its resistance.  Economists Daniel Gros and Thomas
Mayer have suggested that the EFSF should operate like a bank and
borrow from the ECB, using the bonds it purchases as collateral,
Bloomberg discloses.


* European Union Steps Up Response to Escalating Debt Crisis
------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that European Union
governments are adding new urgency to their response to the
escalating debt crisis, taking a number of steps to prepare the
region's economies and banks to withstand a potential sovereign
debt default.


                            *********

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 * * *