TCREUR_Public/111111.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Friday, November 11, 2011, Vol. 12, No. 224

                            Headlines



B E L G I U M

DEXIA CREDIT: Fitch Cuts Rating on Subordinated Debt to 'B-'
DEXIA SA: Hurt by Losses on Greek Debt


C Y P R U S

BANK OF CYPRUS: Moody's Lowers Long-term Deposit Rating to Ba2


G E R M A N Y

BASF-INEOS JV: S&P Assigns 'B+' Long-Term Corp. Credit Rating
GENERAL MOTORS: Opel Chief Picked to Turn Around GM Europe


G R E E C E

DRYSHIPS INC: Completes Merger with OceanFreight


I R E L A N D

ALPSTAR CLO: S&P Raises Rating on Class E Notes to 'CCC+'
BACCHUS 2006-1: Moody's Raises Rating on Class E Notes to 'Caa2'
EPIC PLC: Fitch Affirms Ratings on Two Note Classes at 'CCC'
ERC IRELAND: S&P Lowers Corporate Credit Rating to 'CC'
MCSWEENEY PHARMACY: Urges High Court to Confirm Examinership


I T A L Y

SEAT PAGINE: Optimistic on Debt Deal; Revenues Down 10.5%
SEAT PAGINEGIALLE: S&P Cuts Corporate Credit Rating to 'SD'
* ITALY: Draws Up Budget Measures Amid Soaring Borrowing Costs


K A Z A K H S T A N

KAZAKH AGRARIAN: S&P Affirms Issuer Credit Ratings at 'BB/B'


L A T V I A

TRASTA KOMERCBANKA: Moody's Affirms 'E+' BFSR; Outlook Negative


L U X E M B O U R G

APERAM S.A.: Moody's Lowers Corporate Family Rating to 'Ba3'
ELEX ALPHA: S&P Raises Rating on Class E Notes to 'B+ (sf)'


N E T H E R L A N D S

DUCHESS VII: Moody's Raises Rating on Class E Notes to 'B1'
E-MAC DE: S&P Affirms Rating on Class E Notes at 'B-'
LEVERAGED FINANCE: Moody's Raises Rating on EUR19.8MM Bond to B1


P O L A N D

CENTRAL EUROPEAN: Moody's Cuts Corporate Family Rating to 'B3'


R U S S I A

* REPUBLIC OF SAKHA: S&P Raises Issuer Credit Rating to 'BB'


S P A I N

IM PRESTAMOS: Moody's Lowers Rating on Class A Notes to 'Ba3'


S W E D E N

SAAB AUTOMOBILE: Can Still Enjoy Creditor Protection


S W I T Z E R L A N D

PETROPLUS HOLDINGS: Moody's Cuts CFR to 'B2'; Outlook Negative
* SWITZERLAND: Moody's Says Diversity Helps Firms Navigate Franc


U N I T E D   K I N G D O M

BIG WHEEL: Owner Apologizes for Harvest Festival Failure
CARBONDESK LTD: Put Into Company Voluntary Arrangement
LANDMARK MORTGAGE: Fitch Lifts Rating on Class D Notes to 'CCC'
SPIRIT ISSUER: Fitch Affirms Ratings on Five Note Classes to 'BB'


X X X X X X X X

* BOOK REVIEW: Abraham Zaleznik's Learning Leadership


                            *********


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B E L G I U M
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DEXIA CREDIT: Fitch Cuts Rating on Subordinated Debt to 'B-'
------------------------------------------------------------
Fitch Ratings has downgraded Dexia Credit Local's (DCL)
subordinated debt to 'B-'. At the same time, the agency has
downgraded Dexia Banque Internationale a Luxembourg's (DBIL) and
Dexia Bank Belgium's (DBB) subordinated debt to 'BBB-'.  All the
ratings have been maintained on Rating Watch Negative (RWN).

The downgrade of DCL's subordinated debt is driven by the
materially heightened risk that a debt restructuring could be
imposed by the European Commission (EC) as part of its 'burden
sharing' concept, given that Dexia has received a second round of
state aid.  Fitch would consider a potential debt restructuring
that would result in losses for subordinated bondholders as a
"distressed debt exchange".

The downgrade of DBB's and DBIL's subordinated debt reflects
increased uncertainty following EC investigations on state aid
for these two institutions given the actual recent or expected
ownership changes involving the respective domestic governments.
DBB was fully acquired by the Belgian state on 20 October 2011
while exclusive negotiations involving an international group of
investors in which the state of Luxembourg will participate are
taking place for the purchase of DBIL from Dexia.

On October 21, the EC temporarily approved the nationalization of
DBB under the European Union state aid rules.  However the EC has
announced that "at this stage, it is not able to conclude whether
the acquisition by the Belgian State complies with EU state aid
rules" and that it will assess "whether there would be adequate
burden sharing by all involved of the restructuring costs".  If
burden sharing measures are imposed by the EC on DBB's and DBIL's
subordinated bondholders, Fitch will assess their impact on the
ratings of these securities.

The rating actions are as follows:

Dexia:

  -- Long-term IDR: 'A+'; Outlook Stable, unaffected
  -- Short-term IDR: 'F1+', unaffected
  -- Viability Rating: 'f' unaffected
  -- Individual Rating: 'F'unaffected
  -- Support Rating: '1' unaffected
  -- Support Rating Floor: 'A+' unaffected

DCL:

  -- Long-term IDR: 'A+'; Outlook Stable, unaffected
  -- Senior debt: 'A+' unaffected
  -- Market linked notes: 'A+emr' unaffected
  -- Subordinated (lower Tier 2) debt XS0284386306, XS0307581883,
     XS0155232126: downgraded to 'B-' from 'A', remains on RWN
  -- Hybrid securities: 'CC' unaffected
  -- Short-term IDR: 'F1+' unaffected
  -- Commercial paper: 'F1+' unaffected
  -- Individual Rating: 'D', RWN unaffected
  -- Support Rating: '1' unaffected
  -- Support Rating Floor: 'A+' unaffected
  -- State guaranteed debt: 'AA+' unaffected

Dexia Banque Internationale a Luxembourg (DBIL):

  -- Long-term IDR: 'A+, RWN unaffected
  -- Short-term IDR: 'F1+', RWN unaffected
  -- Senior debt: 'A+', RWN unaffected
  -- Market linked notes: 'A+emr', RWN unaffected
  -- Subordinated (lower Tier 2) debt XS0259302585 and
     XS0254491268: downgraded to 'BBB-' from 'A', remains on RWN
  -- Hybrid securities: 'CCC', RWN unaffected
  -- Individual Rating: 'D', RWN unaffected
  -- Support Rating: '1', RWN unaffected
  -- Support Rating Floor: 'A+', RWN unaffected
  -- State guaranteed debt: 'AA+, unaffected

Dexia Funding Luxembourg:

  -- Hybrid securities: 'CC', unaffected

DBB:

  -- Long-term IDR: 'A'; Outlook Stable, unaffected
  -- Short-term IDR: 'F1' unaffected
  -- Senior debt: 'A' unaffected
  -- Subordinated (upper Tier 2) debt XS0123018557: downgraded to
     'BBB-' from 'BBB+' remains on RWN
  -- Individual Rating: 'D', RWN unaffected
  -- Support Rating: '1' unaffected
  -- Support Rating Floor: 'A' unaffected

Dexia Funding Netherlands:

  -- Senior debt: 'A', unaffected
  -- Market linked notes: 'Aemr', unaffected
  -- Subordinated (lower Tier 2) debt XS0286515621 : downgraded
     to 'BBB-' from 'A-', remains on RWN

Dexia Financial Products:

  -- Commercial paper: 'F1', unaffected

Dexia Delaware LLC:

  -- Commercial paper: 'F1', unaffected

DMA:

  -- Long-term IDR: 'A+', unaffected
  -- Support Rating: '1', unaffected
  -- Covered bonds rated 'AAA': unaffected


DEXIA SA: Hurt by Losses on Greek Debt
--------------------------------------
BBC News report that Dexia SA, the Franco-Belgian bank which was
bailed out last month, has been hit by GBP5.41 billion
(US$8.7 billion; EUR6.32 billion) of costs relating to the sale
of its Belgian bank and losses on Greek debt.

The nationalization of Dexia Bank Belgium cost it EUR4 billion,
BBC discloses.

Dexia also took a loss of EUR2.3 billion on Greek government
bonds in the third quarter, BBC says.

Dexia also detailed its exposure to government bonds in other
struggling European economies -- EUR10 billion in Italy and
EUR1.84 billion in Portugal, BBC relates.

The bank also announced that the board had agreed a capital
injection of EUR4.2 billion to comply with French financial
regulations on minimum capital levels, BBC recounts.  According
to BBC, Dexia said it would convert EUR2.5 billion of loans into
capital for this requirement.

Dexia also said it had made a EUR135 million profit on the sale
of its Turkish insurance firm, DenizEmeklilik, BBC notes.

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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C Y P R U S
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BANK OF CYPRUS: Moody's Lowers Long-term Deposit Rating to Ba2
--------------------------------------------------------------
Moody's Investors Service has downgraded the long-term deposit
and debt ratings of three Cypriot banks:

-- Bank of Cyprus (BoC) by one notch to Ba2 from Ba1

-- Hellenic Bank by one notch to Ba2 from Ba1

-- Marfin Popular Bank Public Co Ltd by three notches to B2 from
    Ba2

Moody's has also placed the ratings of the three banks on review
for further downgrade. These actions follow Moody's downgrade on
November 4 of the Cypriot government bond rating by two notches
to Baa3 (on review for possible further downgrade) from Baa1.

RATINGS RATIONALE

- DOWNGRADES DRIVEN BY REDUCED SOVEREIGN CAPACITY TO PROVIDE
  SUPPORT

The primary driver underlying the rating downgrades of these
three banks is the reduced ability of the country to support its
large banking system, which has an asset base (domestically owned
assets) equivalent to 6x the country's GDP. Moody's reassessment
of the sovereign capacity to support the banking system reflects
a weakening in the strength of the country's balance sheet, as
indicated by the two-notch downgrade of Cyprus's government bond
ratings to Baa3 from Baa1 on November 4.

- MARFIN'S MORE PRONOUNCED DOWNGRADE DRIVEN BY WEAKENING
  STANDALONE CREDIT PROFILE

Moody's multi-notch downgrade of Marfin reflects a weakening of
the banks' standalone credit strength, in addition to the above-
mentioned reduction in the country's capacity to provide support.
Compared to its peers, Marfin's higher exposures to Greek
government bonds (GGBs), at around 91% of Tier 1 capital, render
it particularly vulnerable to losses under the revised deal on
greater private-sector involvement (PSI) announced on October 27.
This would imply a haircut of 50%, and thereby more than double
the losses contemplated under the initial July 21 PSI deal.

After accounting for this 50% haircut on GGB holdings, losses
already taken and tax benefits, Moody's estimates that Marfin
would require capital of more than EUR1 billion to meet the
central bank's minimum Core Tier 1 capital requirement of 8% and
conform with the European Banking Authority's 9% minimum Core
Tier 1. While the bank is exploring various options to address
this gap, given the current difficult market conditions, the task
of raising such a substantial amount of capital (equivalent to
around 5% of Cypriot GDP) by June 2012 significantly increases
the likelihood that the bank will require a large capital
injection from the government.

Based on Moody's analysis, the other two rated banks could cover
the capital shortfall triggered by the currently proposed GGB
impairments without any external assistance. While the Bank of
Cyprus's exposures to GGBs, at 53% of Tier 1, imply material
impairment losses, its ability to replenish core capital is
supported by EUR887 million worth of Convertible Enhanced Capital
Securities (CECS) that can be converted into Core Tier 1 capital.
Hellenic's exposures to GGBs at 18% of Tier 1 are considered
moderate. Moody's notes, however, that further haircuts to GGB
holdings, beyond the recently accounted 50%, cannot be ruled out
in the future, which would exert additional pressure on the
banks.

FACTORS TO BE CONSIDERED IN THE REVIEW

The greater-than-expected weakening in the macroeconomic
conditions in both Cyprus and Greece -- the banks' two main
markets -- will pose operating challenges for the three banks
over the near to medium term. Moody's review of the ratings on
the three Cypriot banks will focus on the impact of this
weakening operating environment on three primary areas:

(1) The banks' ability to sustain their current funding and
liquidity profiles. Cypriot banks' funding bases have shown
resilience since the Greek crisis began; however, a relatively
high reliance on deposits from foreign-owned corporate entities -
- accounting for around one third of total deposits for the three
rated banks -- exposes these banks to potential negative shifts
in market confidence and the risk of deposit outflows. These
negative shifts in market confidence could arise from a range of
factors, such as any further adverse developments in Greece, a
potential further weakening in the Cypriot government's fiscal
position or concerns regarding individual banks. The review will
also focus on the fragility of the banks' deposits in their Greek
operations.

(2) Further deterioration in the banks' non-performing assets,
triggered by the ongoing deterioration in the payment capacity of
Greek households and corporates, which account for a significant
part of the banks' loan books (18% of loans for Hellenic, 35% for
BoC and 46% for Marfin), as well as the increasing risk of the
underperformance of loans to the Cypriot private sector. Real GDP
growth for Cyprus in 2012 has been revised down by Moody's to
0.2% from 1% previously. In addition to these pressures, the
review will also assess the banks' capacity to absorb further
potential losses stemming from their GGB exposures, as additional
haircuts to GGBs, beyond the recently accounted 50%, cannot be
ruled out in the future.

(3) Pressure on the banks' profitability, despite their strong
domestic franchises and solid record of pre-provision
profitability. In addition to Moody's expectation of losses on
the banks' Greek operations, the rating agency is concerned that
the profitability of the banks' Cypriot operations will also be
weakened by higher provisioning and lower business volumes.

Although all three banks have been placed on review for similar
reasons, Moody's review will assess on a case-by-case basis each
bank's expected performance and differing individual ability to
perform in the current environment.

THE RATINGS OF CYPRIOT BANKS ARE:

Marfin Popular Bank Public Co Ltd:

- Deposit and senior debt ratings of B2/Not Prime;

- Subordinated debt rating of B3;

- Standalone BFSR of E+ (mapping to B3 on the long-term rating
   scale);

- All ratings, except the NP short term ratings, are on review
   for downgrade.

Egnatia Finance plc (the funding subsidiary of Marfin Popular
Bank):

- Senior unsecured debt ratings of (P) B2

- Subordinated debt ratings of (P) B3

- All ratings are on review for downgrade.

Bank of Cyprus Public Co Ltd:

- Deposit and senior debt ratings of Ba2/Not Prime;

- Subordinated debt rating of (P) Ba3;

- Junior subordinated notes rating of (P) B1;

- Standalone BFSR of D- (mapping to Ba3 on the long-term rating
   scale);

- All ratings, except the NP short term ratings, are on review
   for downgrade.

Hellenic Bank Public Co Ltd:

- Deposit ratings of Ba2/Not Prime;

- Standalone BFSR of D- (mapping to Ba3 on the long-term rating
   scale);

- All ratings, except the NP short term ratings, are on review
   for downgrade.

PRINCIPAL METHODOLOGIES

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 2008.

All three banks covered in this press release are headquartered
in Nicosia, Cyprus. As of June 2011, Bank of Cyprus Public Co Ltd
reported total consolidated assets of EUR41.8 billion, Hellenic
Bank Public Co Ltd reported EUR8.8 billion, and Marfin reported
EUR39.4 billion.


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BASF-INEOS JV: S&P Assigns 'B+' Long-Term Corp. Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Germany-based styrenics producer
Styrolution Group GmbH, a new joint venture (JV) combining the
global styrenic polymer production activities of BASF SE
(A+/Stable/A-1) and INEOS Group Holdings PLC (B-/Positive/--).
The outlook is stable.

"At the same time, we assigned a debt rating of 'B+' and a
recovery rating of '4' to the EUR480 million senior secured notes
issued in May by Styrolution. The '4' recovery rating indicates
our expectation of 'average' (30%-50%) recovery in the event of a
payment default," S&P related.

"We assigned final ratings after the joint venture gained final
competition clearance in various regions and after the JV
officially launched on Oct. 1, 2011. The ratings are in line with
the preliminary ratings we assigned on May 6, 2011," said
Standard & Poor's credit analyst Oliver Kroemker. "Although the
macroeconomic environment has significantly deteriorated since
then, our ratings factor in the significant cyclicality to which
styrenics markets are exposed. The company's adequate liquidity
and long debt maturity profile also offer credit headroom within
the rating, in our view, given that 2012 will likely be a much
more challenging year than we previously assumed."

"For 2011, we estimate Styrolution will achieve EBITDA close to
EUR350 million-EUR400 million, bearing in mind the favorable
market environment in the first half of the year. In the first
six months of 2011, Styrolution's pro forma EBITDA before special
items reached EUR259 million. This was up 39% on the same period
of 2010 and led to a comparably high EBITDA margin of 7.3%. Pro
forma revenues were EUR3.5 billion, up 9.3% year on year. We
nevertheless factor in a significantly weaker second half of the
year. In view of the deteriorated macroeconomic environment and
severe cyclicality of Styrolution's activities, we foresee a much
weaker fourth quarter of 2011 and full year 2012. However, our
ratings factor in the downside possibility that EBITDA could
easily fall to EUR200 million-EUR250 million in adverse market
conditions," S&P related.

"The stable outlook reflects our expectation that Styrolution has
adequate liquidity," said Mr. Kroemker. "It also takes account of
Styrolution's long-term debt maturity profile and significant
further cost synergies, which should allow it to weather likely
challenging conditions in 2012, given the deteriorated European
and U.S. economic environment and the industry's sensitivity to
supply-and-demand imbalances."


GENERAL MOTORS: Opel Chief Picked to Turn Around GM Europe
----------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that General Motors
Co. said the head of its Opel unit in Germany will take over all
European operations on Jan. 1, the latest move by the auto maker
to speed a turnaround in a long-troubled region.

As reported by the Troubled Company Reporter on May 10, 2011,
Neil Hodgson at Daily Post said General Motors expects its
European arm to break even this year.  The US auto group went
into administration in 2009 but opted to retain GM Europe (GME),
including its Ellesmere Port Vauxhall Astra plant, rather than
dispose of it in a cost cutting drive, Daily Post recounted.
Daily Post related that first quarter results released by
GM showed a more than tripling of profits for the group, and a
continuing trend of falling losses in Europe, which should lead
to break even by the year end.  GME's results improved by GBP363
million on an earnings before interest and tax-adjusted (EBIT)
basis, compared with the same quarter last year, and the group
said it achieved a "significant milestone" by delivering break-
even results on that basis, Daily Post disclosed.

                       About General Motors

With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries.  GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling.  GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy.  GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.

General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing.  The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity.  The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.

On Nov. 1, 2011, Moody's Investors Service raised New GM's
Corporate Family Rating and Probability of Default Rating to Ba1
from Ba2, and its secured credit facility rating to Baa2 from
Baa3.  Moody's also raised the Corporate Family Rating of GM's
financial services subsidiary -- GM Financial -- to Ba3 from B1.

On Oct. 7, 2011, Fitch Ratings upgraded the Issuer Default
Ratings of New GM, General Motors Holdings LLC, and General
Motors Financial Company Inc., to 'BB' from 'BB-'.

On Oct. 3, 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on New GM to 'BB+' from 'BB-'; and
revised the rating outlook to stable from positive. "We also
raised our issue-level rating on GM's debt to 'BBB' from 'BB+';
the recovery rating remains at '1'," S&P said.

                     About Motors Liquidation

General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009.  The Honorable Robert E. Gerber presides over the
Chapter 11 cases.  Harvey R. Miller, Esq., Stephen Karotkin,
Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts.  Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company.  GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel.  Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors.  GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP.  Garden City Group is the claims and notice
agent of the Debtors.

The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims.  Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee.  Attorneys at Butzel Long served as counsel
on supplier contract matters.  FTI Consulting Inc. served as
financial advisors to the Creditors Committee.  Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee.  Legal Analysis Systems, Inc., served as asbestos
valuation analyst.

The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011.  The Plan
was declared effect on March 31.


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DRYSHIPS INC: Completes Merger with OceanFreight
------------------------------------------------
DryShips Inc. and OceanFreight Inc. announced that following
approval by OceanFreight's shareholders at a special meeting, the
companies have completed the merger and OceanFreight has become a
wholly-owned subsidiary of DryShips.  Under the terms of the
merger agreement, OceanFreight shareholders will be entitled to
receive US$11.25 in cash and 0.52326 of a share of common stock
of Ocean Rig UDW Inc., a global provider of offshore ultra
deepwater drilling services, for each share of OceanFreight
common stock owned by them.

As a result of the merger, OceanFreight's common shares will
cease trading on the NASDAQ Global Market, and OceanFreight
expects to deregister and suspend its reporting obligations under
the Securities and Exchange Act of 1934, as amended.

American Stock Transfer & Trust Company has been appointed to
serve as the agent for payment of the merger consideration to
OceanFreight shareholders, and will promptly mail to shareholders
instructions on how to surrender their stock certificates and
receive payment for their shares.  Banks, brokerage firms or
other nominees will provide those shareholders who hold their
shares in "street name" with their proceeds from the transaction.
For more information, shareholders who hold their shares in
"street name" should contact their bank, broker or other holder
of record, and shareholders of record may contact American Stock
Transfer & Trust Company at (877) 248-6417 (toll free).
Shareholders of record should wait to receive the letter of
transmittal before surrendering their shares.

                        About DryShips Inc.

Based in Greece, DryShips Inc. -- http://www.dryships.com/--
owns and operates drybulk carriers and offshore oil
deep water drilling units that operate worldwide.  As of
Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers
(including newbuildings), comprising 7 Capesize, 31 Panamax and 2
Supramax, with a combined deadweight tonnage of over 3.6 million
tons and 6 offshore oil deep water drilling units, comprising of
2 ultra deep water semisubmersible drilling rigs and 4 ultra deep
water newbuilding drillships.

DryShips's common stock is listed on the NASDAQ Global Select
Market where it trades under the symbol "DRYS".

On Nov. 25, 2010, DryShips Inc. entered into a waiver letter
for its US$230.0 million credit facility dated Sept. 10, 2007,
as amended, extending the waiver of certain covenants through
Dec. 31, 2010.

In its audit report on the Company's financial statements for the
year ended Dec. 31, 2010, Deloitte, Hadjipavlou Sofianos &
Cambanis S.A., noted that the Company's inability to comply with
financial covenants under its original loan agreements as of
Dec. 31, 2009, its negative working capital position and other
matters raise substantial doubt about its ability to continue as
a going concern.

The Company's balance sheet at June 30, 2011, showed
US$7.86 billion in total assets, US$4.03 billion in total
liabilities, and US$3.83 billion in total equity.


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ALPSTAR CLO: S&P Raises Rating on Class E Notes to 'CCC+'
---------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
the class A2, B, C1, C2, D, and E notes in Alpstar CLO 1 PLC. "At
the same time, we affirmed our 'AAA (sf)' rating on the
class A1 notes," S&P related.

Alpstar CLO 1 is a cash flow collateralized loan obligation (CLO)
transaction that securitizes loans to primarily speculative-grade
corporate firms.

"The rating actions follow our assessment of the transaction's
performance and the application of relevant criteria for
transactions of this type. The upgrades reflect the transaction's
improved performance and the correction of an error," S&P said.

"From our analysis, we have observed that the credit quality of
the portfolio has improved. There has also been a reduction in
assets we consider to be defaulted in our analysis (those rated
'CC', 'SD' [selective default], or 'D'). Credit enhancement for
all classes of notes, and the weighted-average spread earned on
the collateral pool, have increased. We have also observed
from the trustee report that the overcollateralization test
results for all classes have improved since the last time we took
rating action on all tranches; however, the class C
overcollateralization ratio continues to perform below the
minimum trigger," S&P said.

"These factors, in our view, support higher ratings on the class
A2, B, C1, C2, D, and E notes," S&P related.

"At the same time, we have affirmed our rating on the class A1
notes to reflect our view that credit support available to this
senior tranche remains commensurate with the current 'AAA (sf)'
rating," S&P said.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate for each rated class. In
our analysis, we used: the reported portfolio balance that we
consider to be performing; cash; the current weighted-average
spread; and the weighted-average recovery rates that we
considered appropriate. We incorporated various cash flow stress
scenarios using various default patterns, levels, and timing for
each liability rating category, in conjunction with different
interest rate stress scenarios," S&P said.

"The upgrades reflect the improved performance mentioned above,
but also the correction of an error. We have now discovered that
at the time of our last rating action, we included in our
analysis a lower cash balance than we should have used. As a
result, we lowered the ratings by between one and three notches,
more than we should have in January 2010 (see 'Transaction
Update: Alpstar CLO 1 PLC,' published on Jan. 14, 2010). As a
result of this, we have raised our ratings on the class A2, B,
C1, C2, D, and E notes by more notches than if the error had not
occurred," S&P said.

"The class E notes were constrained by the application of the
largest obligor default test, a supplemental stress test we
introduced in our 2009 criteria update for corporate
collateralized debt obligations (CDOs) (see 'Update To
Global Methodologies And Assumptions For Corporate Cash Flow And
Synthetic CDOs,' published Sept. 17, 2009)," S&P said.

"We have applied our 2010 counterparty criteria and, in our view,
the participants to the transaction are appropriately rated to
support the ratings on the notes (see 'Counterparty And
Supporting Obligations Methodology And Assumptions,' published on
Dec. 6, 2010)," S&P related.

Ratings List

Alpstar CLO 1 PLC
EUR330.00 Million Secured Fixed- And Floating-Rate Notes

Class            Rating
         To                   From

Ratings Raised

A2       AA- (sf)             A+ (sf)
B        A (sf)               BB+ (sf)
C1       BBB- (sf)            BB (sf)
C2       BBB- (sf)            BB (sf)
D        BB+ (sf)             CCC+ (sf)
E        CCC+ (sf)            CCC- (sf)

Rating Affirmed

A1       AAA (sf)


BACCHUS 2006-1: Moody's Raises Rating on Class E Notes to 'Caa2'
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Bacchus 2006-1 plc CLO:

   -- EUR195.8MM Class A-1 Senior Secured Floating Rate Notes due
      2022, Upgraded to Aa1 (sf); previously on Jun 22, 2011 A1
      (sf) Placed Under Review for Possible Upgrade

   -- EUR67.5MM Class A-2A Senior Secured Floating Rate Notes due
      2022, Upgraded to Aaa (sf); previously on Jun 22, 2011 Aa1
      (sf) Placed Under Review for Possible Upgrade

   -- EUR7.5MM Class A-2B Senior Secured Floating Rate Notes due
      2022, Upgraded to Aa2 (sf); previously on Jun 22, 2011 A3
      (sf) Placed Under Review for Possible Upgrade

   -- EUR34MM Class B Senior Secured Floating Rate Notes due
      2022, Upgraded to A3 (sf); previously on Jun 22, 2011 Ba1
      (sf) Placed Under Review for Possible Upgrade

   -- EUR25.54MM Class C Senior Secured Deferrable Floating Rate
      Notes due 2022, Upgraded to Ba1 (sf); previously on
      Jun 22, 2011 B1 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR19.66MM Class D Senior Secured Deferrable Floating Rate
      Notes due 2022, Upgraded to B1 (sf); previously on
      Jun 22, 2011 Caa2 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR10MM Class E Senior Secured Deferrable Floating Rate
      Notes due 2022, Upgraded to Caa2 (sf); previously on
      June 22, 2011 Caa3 (sf) Placed under Review for Possible
      Upgrade;

   -- EUR5MM (current rated balance of EUR3,990,523) Class W
      Combination Notes, Upgraded to Ba1 (sf); previously on
      Jun 22, 2011 Ba3 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR14.8MM (current rated balance of EUR10,281,795) Class X
      Combination Notes, Upgraded to Ba3 (sf); previously on
      Jun 22, 2011 Caa1 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR69MM (current rated balance of EUR47,927,202) Class Y
      Combination Notes, Upgraded to Ba3 (sf); previously on
      Jun 22, 2011 Caa1 (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 W,
Class X and Class Y, the 'Rated Balance' is equal at any time to
the principal amount of the Combination Note on the Issue 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.

Bacchus 2006-1 plc CLO, issued in March 2006, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by IKB Deutsche Industriebank AG. This transaction will
be in reinvestment period until April 12, 2012. It is
predominantly composed of senior secured loans.

RATINGS RATIONALE

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 last rating action in February 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) 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 (2) adjustments to the equity
cash-flows haircuts applicable to combination notes.

The overcollateralization ratios of the rated notes have improved
since the rating action in February 2011. Based on the trustee
report dated as of October 5, 2011 (the September trustee
report), the Class A/B, Class C, Class D and Class E
overcollateralization ratios are reported at 124.23%, 113.80%,
106.90% and 103.28%, respectively, versus December 2010 levels of
119.74%, 109.83%, 103.07% and 99.62%, respectively, and all
related overcollateralization tests are currently in compliance.
Moody's also notes that, after the October 17, 2011 payment date,
the Class D and Class E Notes are no longer deferring interest
and that all previously deferred interest has been paid in full.

Reported WARF increased slightly from 2903 to 2907 between
December 2010 and September 2011. 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 September 1, 2010. In addition,
securities rated Caa or lower make up approximately 5.16% of the
underlying portfolio versus 10.96% in December 2010.
Additionally, defaulted securities has been reduced to zero
compared to EUR9 million in December 2010.

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 EUR346.5
million, defaulted par of zero, a weighted average default
probability of 22.51% (consistent with a WARF of 2907), a
weighted average recovery rate upon default of 47.4% for a Aaa
liability target rating, a diversity score of 37 and a weighted
average spread of 3.08%. 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 94% 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.

The deal is allowed to reinvest and the manager has the ability
to deteriorate the collateral quality metrics' existing cushions
against the covenant levels. However, in this case given the
limited time remaining in the deal's reinvestment period, Moody's
analyzed the impact of assuming weighted average spread
consistent with the midpoint between reported and covenanted
values.

In addition, because of the large concentration of participation
loans with IKB as the sole counterparty (5.71% as per the
September Trustee report), as well as the involvement of IKB as
sole servicer for 3.5% the loans, Moody's ran stressed bivariate
risk scenarios and supplemented its base case analysis with a
scenario assuming 10% recovery rate instead of 50% for the
proportion of senior secured participation loans and assuming
weighted average spread at covenanted value.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, 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 either positively or negatively
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 described
below:

(1) Moody's also notes that around 75% 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) 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.

(3) 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.

(4) Uncertainty on IKB: Moody's withdrew IKB's public ratings on
July 14, 2011. Large uncertainty arises around its ability to
service its debt obligations and being a counterparty of
participation loans. Moody's tested a scenario by stressing the
credit quality of IKB as participation counterparty.

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 EMEA
Cash-Flow 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.


EPIC PLC: Fitch Affirms Ratings on Two Note Classes at 'CCC'
------------------------------------------------------------
Fitch Ratings has affirmed Epic (Brodie) plc's EUR243.3 million
commercial mortgage-backed floating-rate notes, due 2016, as
follows:

  -- EUR133.3mm class A: affirmed at 'AAA'; Outlook revised to
     Negative from Stable

  -- EUR29.6mm class B: affirmed at 'AA'; Outlook revised to
     Negative from Stable

  -- EUR20.1mm class C: affirmed at 'A'; Outlook revised to
     Negative from Stable

  -- EUR23.6mm class D: affirmed at 'BBB'; Outlook revised to
     Negative from Stable

  -- EUR20.0mm class E: affirmed at 'B'; Outlook Negative

  -- EUR12.0mm class F: affirmed at 'CCC'; RR4

  -- EUR6.4mm class G: affirmed at 'CCC'; RR6

At the last rating action in November 2010, two loans remained in
this transaction, the Terry loan and the Kenmore loan.  The
Kenmore loan repaid in full in December 2010 with funds being
applied against the notes in a modified pro rata manner.

The Terry loan reached its scheduled maturity date in April 2011.
An inability to refinance the loan has resulted in the servicer
agreeing to three short-term extensions, the last of which will
expire on January 20, 2012.  Fitch understands that the extension
periods have been provided to allow time for an exit strategy to
be formulated which would maximize the returns to noteholders.  A
cash sweep, which was previously exclusively repaying non-
securitized junior debt, switched solely to the securitized
portion in time for the July interest payment date (IPD).  This
resulted in repayment of EUR4.1m over the last two IPDs.

The collateral supporting the loan was revalued in March 2011,
reducing the reported loan-to-value ratio (LTV) to 93.4% from
100.1%.  The interest cover ratio (ICR) has increased markedly to
3.19x, from 1.52x at the time of the last rating action,
following the maturity of the interest rate swap in April 2011.
This increased coverage has allowed for the level of cash sweep
noted above.

Despite the improved interest coverage of the Terry loan,
concerns still remain about the loan's future beyond the current
maturity date extension.  The failure of the borrower to
refinance the loan at its original maturity date reflects its
high leverage, and this is driving the Negative Outlooks on the
Class A to E notes.  In addition, with no interest rate hedging
in place, any future benefit from the cash sweep would be negated
(or even reversed) should interest rates rise in the future.

Without significant progress in the short-to-medium term with
either finalizing restructuring terms or a gradual disposal of
the portfolio, the ratings are reliant on cash sweep continuing
to de-lever the loan.  If neither materializes sufficiently,
these concerns may result in a downgrade of the notes.


ERC IRELAND: S&P Lowers Corporate Credit Rating to 'CC'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CC' from 'CCC+'
its long-term corporate credit ratings on ERC Ireland Preferred
Equity Ltd. (ERCIPE), ERC Ireland Finance Ltd. (ERCIF), and ERC
Ireland Holdings Ltd. (ERCIH), together, the eircom group. These
entities are the parent companies of leading Ireland-based
telecommunications provider eircom Group Ltd. (not rated). The
outlook is negative.

"The downgrades follow the eircom group's recent confirmation of
a breach of the leverage covenant under its senior facility
agreement on June 30, 2011. The group obtained a temporary waiver
until Dec. 15, 2011. However, in our view, the eircom group is
likely to breach this covenant again in December 2011, after the
expiry of the temporary waiver and absent any remedial measures.
In addition, we believe that the eircom group's capital structure
may not be sustainable over the long term. This is due to the
combination of the eircom group's financial risk profile -- which
we assess as highly leveraged -- and extremely challenging market
conditions in Ireland, including stiff competition and a
depressed economy. In our opinion, management could try to
address the long-term sustainability of the capital structure. We
therefore believe that management could decide both to alleviate
the risk of breaching the covenant again and to reorganize, in a
credit-dilutive manner, the capital structure at the same time,"
S&P said.

"We do not rule out the possibility that management could
alleviate covenant pressure for a number of quarters including
and beyond December 2011 without implementing credit-dilutive
restructuring measures. However, we see this possibility as less
likely, especially as the recent temporary waiver was granted to
provide the eircom group with the stability to develop a
permanent solution to the sustainability of its balance sheet,"
S&P related.

Management anticipates that there will be a significant reduction
in total EBITDA in the first quarter of 2012 (ended Sept. 30,
2011) compared with the same period the previous year, although
there are no precise figures available at this stage. "In our
opinion, revenues and EBITDA will likely remain under pressure in
the next few quarters, but with further efforts to cut costs
likely to soften the effect of lower sales," S&P said.

"In our opinion, the eircom group's capital structure is likely
to become unsustainable, especially in light of the currently
adverse trading environment in Ireland. We think that the
upcoming expiry of the recent temporary waiver of the covenant
breach increases the possibility that the group might undertake
debt restructuring measures that would be tantamount to a default
under our criteria," S&P said.

"Given our view of the pressure on the eircom group's revenues
and profits in 2012, and management's aim to address the long-
term sustainability of the capital structure, we are unlikely to
revise the outlook to stable over the next few months," S&P
related.


MCSWEENEY PHARMACY: Urges High Court to Confirm Examinership
------------------------------------------------------------
The Irish Times reports that eleven companies in the McSweeney
Pharmacy Group have urged the High Court to confirm examinership
for them while a proposed survival scheme is finalized.

The group's companies in Northern Ireland are not affected, The
Irish Times notes.  According to The Irish Times, the companies
have debts of about EUR17 million, with more than EUR13 million
owed to Allied Irish Banks.

As previously reported by the Troubled Company Reporter-Europe on
Nov. 9, 2011, The Irish Times related that AIB is to oppose a
petition for examinership brought by 11 companies in the
McSweeney pharmacy group.  James Doherty, for AIB, said while
there was an underlying business in the companies, the bank
believed it would be better served by receivership, The Irish
Times disclosed.

McSweeney pharmacy group employs 95 people across Ireland.


=========
I T A L Y
=========


SEAT PAGINE: Optimistic on Debt Deal; Revenues Down 10.5%
---------------------------------------------------------
Valentina Za at Reuters reports that Seat Pagine Gialle said it
was confident that a debt restructuring accord could be reached
that would allow it to continue operating, as it reported a 17.7%
fall in nine-month core earnings.

Seat, which is in the process of restructuring its EUR2.7 billion
debt, said nine-month revenues fell 10.5% to EUR695.6 million
from a restated 2010 figure, Reuters relates.

The group expects Italian revenues to fall between 5% and 7% this
year, despite strong growth in online products, Reuters says.

Seat posted an attributable loss of EUR33.9 million for the first
nine months, from a restated income of EUR42.2 million last year,
Reuters discloses.

                          About Seat Pagine

Seat Pagine Gialle SpA (PG IM) -- http://www.seat.it/-- is an
Italy-based company that operates multimedia platform for
assisting in the development of business contacts between users
and advertisers.  It is active in the sector of multimedia
profiled advertising, offering print-voice-online directories,
products for the Internet and for satellite and ortophotometric
navigation, and communication services such as one-to-one
marketing.  Its products include EuroPages, PgineBianche,
Tuttocitta and EuroCompass, among others.  Its activity is
divided into four divisions: Directories Italia, operating
through, Seat Pagine Gialle; Directories UK, through TDL
Infomedia Ltd. and its subsidiary Thomson Directories Ltd.;
Directory Assistance, through Telegate AG, Telegate Italia Srl,
11881 Nueva Informacion Telefonica SAU, Telegate 118 000 Sarl,
Telegate Media AG and Prontoseat Srl, and Other Activitites
division, through Consodata SpA, Cipi SpA, Europages SA, Wer
liefert was GmbH and Katalog Yayin ve Tanitim Hizmetleri AS.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Nov. 4,
2011, Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Italy-based international publisher of
classified directories SEAT PagineGialle SpA to 'CC' from 'CCC+'.
S&P said that the outlook is negative.


SEAT PAGINEGIALLE: S&P Cuts Corporate Credit Rating to 'SD'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Italy-based international publisher of
classified directories SEAT PagineGialle SpA to 'SD' (Selective
Default) from 'CC'.

"At the same time, we lowered the issue rating on the EUR1.3
billion subordinated notes issued by related entity Lighthouse
International Co. S.A. to 'D' (Default) from 'C'. The recovery
rating on these notes is '5', indicating our expectation of
modest (10%-30%) recovery for creditors in the event of a payment
default," S&P said.

"All our other ratings on SEAT remain unchanged," S&P related.

The downgrade follows SEAT's delayed interest payment (about
EUR52 million) on the subordinated bonds issued by Lighthouse
International beyond the fifth business day after the scheduled
due date. The payment due date fell on Oct. 31, 2011, and SEAT is
using the 30-day grace period provided in the notes' indentures
because it is in the process of restructuring its balance sheet.

"Under our criteria 'Timeliness of Payments: Grace Periods,
Guarantees, And Use Of 'D' And 'SD' Ratings,' published Dec. 23,
2010, we consider the extension of a payment maturity as
tantamount to a default scenario if the payment falls later than
five business days after the scheduled due date. This is
irrespective of the grace period stipulated in the notes'
indentures," S&P related.

"Although we believe that SEAT's liquidity would be sufficient to
cope with upcoming interest payments, with reported balance-sheet
cash of approximately EUR149 million, we nevertheless take a
strict view on any payment deferral, in accordance with our
criteria outlined above. We consider an extension of a due
payment of interest as equivalent to a debt restructuring below
par by a distressed issuer, and therefore a default," S&P said.

"We could lower the rating on SEAT to 'D' (Default) if the
company fails to pay substantially all its obligations under its
current indebtedness when these obligations fall due," S&P
related.


* ITALY: Draws Up Budget Measures Amid Soaring Borrowing Costs
--------------------------------------------------------------
Chiara Vasarri and Lorenzo Totaro at Bloomberg News report that
Italy's government presented lawmakers with the budget measures
pledged to European Union allies, paving the way for
parliamentary votes this week that will lead to Prime Minister
Silvio Berlusconi's resignation.

Finance MinisterGiulio Tremonti delivered the legislation, to the
Senate on Wednesday in Rome in the form of an amendment to the
budget law, Bloomberg relates.  The measures are aimed at
convincing investors Italy can overhaul its economy to reduce the
euro-region's second biggest debt, Bloomberg notes.  The Senate
will vote on the plan on Nov. 11, and the Chamber of Deputies
will seek to pass it by Nov. 13.

Italy's bond yields surged past the 7% threshold that prompted
Greece, Portugal and Ireland to seek bailouts after Mr.
Berlusconi's majority unraveled on Tuesday and LCH Clearnet SA
said it would demand additional collateral on Italian debt,
Bloomberg notes.  Months of bickering within Berlusconi's Cabinet
over the budget measures ended up fueling the collapse of the
government and the selloff of the country's debt, Bloomberg
states.

The yield on Italy's 10-year bond surged 48 basis points on
Wednesday to 7.246%, the highest close since the introduction of
the euro in 1999, Bloomberg discloses.  The yield on the five-
year bond also closed above 7%, with two-year Italian notes
yielding more than 10%, according to Bloomberg.

The measures presented to the Senate on Wednesday include a
pledge to raise EUR15 billion (US$20 billion) from real estate
sales over the next three years, a two-year increase in the
retirement age to 67 by 2026, opening up closed professions
within 12 months and the gradual reduction in government
ownership of local services, Bloomberg discloses.

Bloomberg's Paul Dobson reports that Mr. Berlusconi on Wednesday
said he'd step down as soon as parliament passed cost-cutting
steps pledged to EU allies.

Italy was set to sell as much as EUR5 billion of one-year bills
yesterday, Bloomberg notes.  It will auction up to EUR3 billion
of debt due in September 2016 on Nov. 14, Bloomberg discloses.


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


KAZAKH AGRARIAN: S&P Affirms Issuer Credit Ratings at 'BB/B'
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' long-term
and 'B' short-term issuer credit ratings and the 'kzA+'
Kazakhstan national scale rating on Kazakh Agrarian Credit Corp.
(KACC), a state-owned provider of subsidized credit to
agricultural and nonagricultural businesses in rural areas
throughout the Republic of Kazakhstan (foreign and local currency
BBB+/Stable/A-2; Kazakhstan national scale 'kzAAA'). The outlook
is stable.

"The ratings on KACC reflect a combination of its stand-alone
credit profile, which we assess at 'b', and our opinion of a
'high' likelihood of timely and sufficient extraordinary support
the company may receive from the Kazakh government in the event
of financial distress," S&P related.

The 'b' stand-alone credit profile is constrained by KACC's high
sector and single-name concentrations in the challenging
operating environment that is Kazakhstan's agricultural sector.
Moreover, the relatively weak quality of its lending decisions in
the past results in current weak profitability.

"It is buoyed in our view by significant ongoing state support to
KACC, resulting in high and growing capitalization and the
availability of cheap financing in the form of budget and
national fund loans. More than 50% of loans are covered by
equity. Although the government provides capital injections to
finance specific lending programs in a given year, we believe
KACC may use capital provided in previous years to offset losses
and repay debt, while current-year injections might be
redistributed if necessary," S&P said.

"The stable outlook reflects our expectations of continued strong
ongoing support to KACC in 2012-2014, resulting in strong
capitalization levels and adequate liquidity. It also reflects
our expectation that our assessment of a "high" likelihood of
timely and sufficient extraordinary government support will not
change," S&P said.

A stronger probability of extraordinary support, or positive
momentum in the stand-alone credit profile, with improving
profitability, might lead to positive rating actions on KACC.

Negative rating actions on the sovereign, or signs of a lower
probability of extraordinary support, might result in negative
rating actions on KACC. Deterioration of the stand-alone credit
profile, with weakening liquidity and growing problem assets in
KACC's portfolio, might also result in negative rating actions.


===========
L A T V I A
===========


TRASTA KOMERCBANKA: Moody's Affirms 'E+' BFSR; Outlook Negative
---------------------------------------------------------------
Moody's Investors Service has affirmed Trasta Komercbanka's E+
standalone bank financial strength rating (BFSR) and the B3 long-
term deposit rating. The outlook on the BFSR and long-term
deposit ratings remains negative. The Not Prime short-term rating
has been affirmed.

Ratings Rationale

The affirmation of the BFSR at E+ (with a negative outlook)
reflects Trasta Komercbanka's (i) modest private banking
franchise; (ii) high borrower concentration in bank deposits and
customer loans; (iii) the sustained high level of problem loans
(34% of gross loans at H1 2011, down from 35% at FY 2010); (iv)
poor core profitability, leading to a net loss of LVL4.6 million
in 2010 and a small H1 2011 profit of LVL0.6 million; and (v)
concentrated, predominantly non-resident deposit base. The bank's
B3 long-term deposit rating continues to reflect Moody's
assessment that there is a very low probability of systemic
support in the event of a stress situation.

Moody's notes positively the bank's improved capitalization
following a LVL7.46 million share issue in June 2011, which
resulted in a H1 2011 Tier 1 ratio of 18.15%, compared with
13.68% at year-end 2010. The general trend of stabilization of
the bank's ratios -- a trend which has seen problem-loan levels
and profitability both stabilize, albeit at weak levels -- is an
additional credit-positive factor.

The negative outlook on the BFSR and long-term deposits primarily
reflects Moody's expectation the bank's profitability will remain
under negative pressure due to low margins related to deposit
competition and low yields on bank deposits, as well as the
negative impact of market instability on securities income. It
also reflects the rating agency's concerns that the high deposit
and asset-allocation concentrations may again become a concern
due to market instability.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Trasta Komercbanka's ratings could be negatively affected if (i)
credit quality weakens to a significant degree, which could exert
pressure on the bank's capitalization; or (ii) there is any sign
of significant deposit withdrawals leading to large-scale asset
reductions.

A revision to a stable outlook for Trasta Komercbanka's BFSR and
long-term deposit ratings could stem from a significant reduction
in problem-loan levels and a sustainable improvement in pre-
provision profitability as well as a reduction of deposit and
borrower concentrations.

Principal Methodologies

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

Headquartered in Riga, Latvia, Trasta Komercbanka reported total
consolidated assets of around LVL229 million (EUR326 million) at
the end of June 2011.


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


APERAM S.A.: Moody's Lowers Corporate Family Rating to 'Ba3'
------------------------------------------------------------
Moody's downgraded the corporate family rating for Aperam S.A. to
Ba3 from Ba2 and changed the company's rating outlook to negative
from stable. At the same time, the rating on the company's two
series of unsecured notes was downgraded to B2 (LGD6, 91%) from
B1.

RATINGS RATIONALE

The downgrade reflects the weaker-than-expected performance of
the company, which was spun off from ArcelorMittal in January
2011. Weaker stainless steel demand, lower stainless steel base
prices, and lower capacity utilization have impacted Aperam,
especially since July 2011. Aperam's operating performance for
the nine months ended 30 September 2011 evidences the downward
pressure. Operating income and as-reported EBITDA were US$74
million and US$303 million, respectively, in the first 9 months
of 2011, compared to US$170 million and US$388 million in 2010.
The company's leverage, in terms of debt to LTM EBITDA, is now
approximately 4.8x, well above the 2.5x Moody's had expected for
2011 and more indicative of a high single-B rating. Furthermore,
Moody's sees the pressure on Aperam's earnings continuing into
2012 as weak macroeconomic conditions will impact both its
European and American operations (Brazil is an important market
for Aperam) and structural overcapacity in the stainless steel
industry will limit the magnitude of any market recovery, hence
the change to a negative outlook.

Aperam's Ba3 corporate family rating reflects persistent
overcapacity in the stainless steel market, which will be further
aggravated by the ramp-up of production at Inoxum's US plant;
highly volatile raw material prices, which can lead to
significant swings in shipments and selling prices; import
threats from Chinese stainless steel producers; high leverage;
and the company's high dependence on the profit contribution of
one country, Brazil. The rating is supported by Aperam's strong
market position in Europe and Brazil; its extensive distribution
network; adequate liquidity; and conservative financial policies.

Moody's sees the company as having adequate liquidity, consisting
of cash of US$302 million, unused revolving credit facility
availability of US$200 million, and shares in General Moly and
Gerdau S.A. that could be sold. Moody's also expects the release
of working capital that accompanies an economic slowdown to
generate cash. In addition, the company can reduce capital
expenditures. Moody's does not believe the company's ability to
access its borrowing base revolving credit facility over the next
12 months will be limited by the facility's financial covenants.

The company's rating could be lowered if, for an extended period
of time, Moody's thought debt/EBITDA was to remain above 4.5x,
EBIT interest coverage would be less than 1.0x, and CFO minus
dividends would be negative, or if liquidity became tight. The
outlook or rating could be raised if stainless steel market
conditions turned more favorable, evidenced by a meaningful
increase in demand in Aperam's major markets, normal levels of
imports, and improved capacity utilization. Financial measures
that would indicate a possible upgrade include a debt/EBITDA
ratio of less than 3.5x, EBIT interest coverage of 2.0x, and good
liquidity.

The principal methodology used in rating Aperam S.A. was the
Global Steel Industry Methodology published in January 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June.

Aperam is one of the world's largest producers of flat stainless
steel as well as electrical and specialty steels, having a total
capacity of 2.5 million tons. It produces steel in six plants in
Belgium, France, and Brazil and has an extensive distribution
network. In the twelve months ended September 30, 2011, Aperam
had sales of US$6.3 billion.


ELEX ALPHA: S&P Raises Rating on Class E Notes to 'B+ (sf)'
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
all rated classes of notes in eleX Alpha S.A.

These rating actions follow our assessment of the transaction's
performance -- using data from the latest available trustee
report dated Sept. 9, 2011 -- and a cash flow analysis. "We have
taken into account recent developments in the transaction and
reviewed the transaction under our 2010 counterparty criteria
(see 'Counterparty and Supporting Obligations Methodology and
Assumptions,' published on Dec. 6, 2010)," S&P related.

"Since our previous rating action on March 16, 2010 (see
'Transaction Update: eleX Alpha S.A.'), we have observed an
increased aggregate collateral balance and a reduction in the
class A1, A2, and E note principal balances. The issuer has paid
down the class A1 and A2 notes, using interest proceeds from the
collateral to cure previously failing coverage tests.
Additionally, the class E notes have now repaid the interest that
they were previously deferring. This has increased the credit
enhancement for all classes of notes," S&P said.

"Furthermore, our analysis indicates that the weighted-average
spread has increased to 3.33% from 2.87% of the portfolio, and
the portfolio's credit quality has improved. For example, the
balance of assets that we consider as defaulted (i.e., rated
'CC', 'SD' [selective default], or 'D') has decreased to 0.72%
from 5.43% of the portfolio, and assets rated in the 'CCC'
category (i.e., 'CCC+', 'CCC', or 'CCC-') have decreased to 5.85%
from 14.23% of the portfolio," S&P related.

"We have subjected the capital structure to a cash flow analysis
to determine the break-even default rate for each rated class. In
our analysis, we have used the reported portfolio balance of
assets that we consider to be performing (rated 'CCC-' or above),
the principal cash balance, the current weighted-average spread,
and the weighted-average recovery rates that we consider to be
appropriate. We have incorporated various cash flow stress
scenarios using various default patterns, levels, and timing for
each liability rating category, in conjunction with different
interest rate stress scenarios," S&P said.

"We have observed that British pound sterling-denominated assets
currently compose 19.23% of the portfolio. These assets are
naturally hedged by the class A-1 sterling liabilities, with any
mismatches hedged by options. We have also observed that non-
euro-, non-sterling-denominated assets compose 1.68% of the
portfolio. These assets are hedged under a cross-currency swap
agreement.
Our cash flow analysis has also considered scenarios in which the
transaction is exposed to changes in currency rates if the option
provider or cross-currency swap counterparty does not perform,"
S&P said.

"Our credit and cash flow analyses -- without giving benefit to
the options and the cross-currency swaps -- indicate that the
credit enhancement available to the class A-1 and A-2 notes is
now at a level that is commensurate with higher ratings than we
previously assigned. We have therefore raised our ratings on
these notes," S&P said.

"These analyses also indicate that the credit enhancement
available to the class B to E notes is now commensurate with
higher ratings than previously assigned. We have therefore also
raised our ratings on all of these notes. Because our ratings on
the class B to E notes remain lower than those on the hedge
counterparties in the transaction, they are unaffected by the
application of our 2010 counterparty criteria," S&P related.

"None of our ratings on the notes was constrained by the
application of the largest obligor default test--a supplemental
stress test that we introduced in our 2009 criteria update for
corporate collateralized debt obligations (CDOs) (see 'Update To
Global Methodologies And Assumptions For Corporate Cash Flow
And Synthetic CDOs,' published on Sept. 17, 2009)," S&P said.

eleX Alpha is a cash flow collateralized loan obligation (CLO)
transaction that securitizes loans to primarily speculative-grade
corporate firms. It closed in December 2006 and is managed by DWS
Finanz-Service GmbH.

Ratings List

Class            Rating
           To              From

eleX Alpha S.A.
EUR300 Million Senior Secured Floating-Rate Notes

Ratings Raised

A-1        AA+ (sf)        A+ (sf)
A-2        AA+ (sf)        A+ (sf)
E          B+ (sf)         CCC- (sf)

Ratings Raised and Removed From CreditWatch Positive

B          A+ (sf)         BBB+ (sf)/Watch Pos
C          A- (sf)         BB+ (sf)/Watch Pos
D          BB+ (sf)        B (sf)/Watch Pos


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


DUCHESS VII: Moody's Raises Rating on Class E Notes to 'B1'
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Duchess VII CLO B.V.:

Issuer: Duchess VII CLO B.V.

   -- EUR25MM Class C Third Priority Deferrable Secured Floating
      Rate Notes due 2023, Upgraded to Baa2 (sf); previously on
      June 22, 2011 Baa3 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR32.5MM Class D Fourth Priority Deferrable Secured
      Floating Rate Notes due 2023, Upgraded to Ba2 (sf);
      previously on June 22, 2011 B1 (sf) Placed Under Review for
      Possible Upgrade

   -- EUR15MM Class E Fifth Priority Deferrable Secured Floating
      Rate Notes due 2023, Upgraded to B1 (sf); previously on
      June 22, 2011 Caa1 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR10MM Class O Combination Notes due 2023 (current Rated
      Balance EUR7,658,257.38), Upgraded to Baa2 (sf); previously
      on June 22, 2011 Baa3 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR7MM Class W Combination Notes due 2023 (current Rated
      Balance 5,420,722.66), Upgraded to Baa3 (sf); previously on
      June 22, 2011 Ba2 (sf) Placed Under Review for Possible
      Upgrade

Moody's also confirmed the rating of these notes:

   -- EUR35MM Class B Second Priority Deferrable Secured Floating
      Rate Notes due 2023 Notes, Confirmed at A2 (sf); previously
      on June 22, 2011 A2 (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 Classes
W, the 'Rated Balance' is equal at any time to the principal
amount of the Combination Note on the Issue Date increased by a
Rated Coupon of 0.25% 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. For Class O, the 'Rated
Balance' is equal at any time to the principal amount of the
Combination Note on the Issue 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.

Duchess VII, issued in December 2006, is a multi-currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European and US loans. The portfolio is managed
by Babson Capital Europe Limited. This transaction will be in
reinvestment period until November 2013. It is predominantly
composed of senior secured loans.

RATINGS RATIONALE

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, and (3) adjustments to the equity
cash-flows haircuts applicable to combination notes.

The overcollateralization ratios of the rated notes have improved
since the rating action in December 2009. The Senior, Class B,
Class C, Class D and Class E overcollateralization ratios are
reported in September 2011 at 140.01%, 126.87%, 118.90%, 109.93%
and 106.23%, respectively, versus November 2009 levels, on which
the last rating action was based, of 137.91%, 124.98%, 117.13%,
108.30% and 104.65%, respectively, and all related
overcollateralization tests are currently in compliance.

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 EUR469.26
million, defaulted par of EUR10.46 million, a weighted average
default probability of 29.99% (consistent with a WARF of 2999), a
weighted average recovery rate upon default of 43.48% for a Aaa
liability target rating, a diversity score of 38 and a weighted
average spread of 3.24%. 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 83.69% 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.

In addition because of the substantial gap between current and
covenant weighted average spread, Moody's supplemented its base
case analysis with a scenario assuming the current weighted
average spread of 3.53%, as reported in September 2011.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, 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 either positively or negatively
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 notes that around 70% 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. Realization of higher than expected recoveries
would positively impact the ratings of the notes.

(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. Moody's tested for a
possible extension of the actual weighted average life in its
analysis. Extending the weighted average life of the portfolio
may positively or negatively impact the ratings of the notes
depending on their seniority within the transaction's structure.

(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 EMEA
Cash-Flow model.

This model was used to represent the cash flows and determine the
loss for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. As such, Moody's
analysis encompasses the assessment of stressed scenarios.

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.


E-MAC DE: S&P Affirms Rating on Class E Notes at 'B-'
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
E-MAC DE 2005-I B.V.'s class A, B, C, D, and E notes.

"The rating actions follow our analysis of the transaction's
performance and available credit support, which is provided by
subordination, a reserve fund, and excess spread," S&P related.

"We last reviewed the transaction's performance on April 15, 2010
(see 'Ratings Lowered In Four EMAC DE RMBS Transactions After New
Stresses Applied'). In that analysis, we adjusted our approach
for calculating the foreclosure frequency of the mortgage loans
in all of the E-MAC DE transactions to take account of our view
on their historically poor performance. Since then, the
cumulative losses on the loans have increased further to 1.98%
from 0.85% of the current pool balance," S&P related.

E-MAC DE 2005-I has a swap contract in place to ensure that the
excess spread, after senior expenses and payments to the class A
to E noteholders, is 35 basis points (bps) before the first put
date in May 2012, and 20 bps thereafter, as of the reset date.
The issuer can use available excess spread to cure losses and to
top-up the reserve fund to its required amount of EUR5.4 million.
"Since our last review, there has been enough surplus excess
spread after curing losses, such that the reserve fund has been
fully funded since May 2010," S&P stated.

As of the most recent four interest payment dates, 120+ day
delinquencies have stabilized at higher levels of between 8.90%
and 9.20% of the pool. As per the August 2011 investor report,
total delinquencies amount to 15% of the current outstanding pool
balance. "The remaining delinquency levels suggest to us that
the transaction could suffer further losses," S&P said.

As a result of the delinquency performance, the notes have
continued to amortize sequentially. They have not switched to
pro-rata amortization because 60+ day delinquencies have been
above 1.5% since May 2009. (The transaction's pro-rata
amortization trigger could have kicked in at the time if there
was compliance with certain triggers -- including for
delinquencies -- outlined in the transaction documents [see
"Redemption of the notes" in "New Issue: E-MAC DE 2005-I B.V.,"
published on Aug. 2, 2005].)

While the class A notes have been amortizing and the class B to E
notes have remained at the same size as at closing, credit
enhancement provided by subordination has increased for all
classes of notes since April 2010.

"Considering realized losses and delinquencies to date, we have
assessed the likelihood of future losses for both the performing
and nonperforming parts of the collateral pool," S&P related.

"Following our review, we have affirmed our ratings on all E-MAC
DE 2005-I's classes of notes because we consider the current
credit enhancement to be commensurate with the ratings on these
notes," S&P said.

E-MAC DE 2005-I's pool factor (i.e., the current balance as a
percentage of the original balance) has reduced to 85%. "We will
continue to monitor the development of delinquencies and actual
losses in the transaction," S&P said.

E-MAC DE 2005-I is a true-sale German residential mortgage-backed
securities (RMBS) transaction.

Ratings List

E-MAC DE 2005-I B.V.
EUR301.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Affirmed

Class       Rating

A           AA- (sf)
B           A- (sf)
C           BB (sf)
D           B (sf)
E           B- (sf)


LEVERAGED FINANCE: Moody's Raises Rating on EUR19.8MM Bond to B1
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Leveraged Finance Europe Capital III B.V.:

   -- EUR213.6MM A Bond, Upgraded to Aaa (sf); previously on
      Jun 22, 2011 Aa2 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR26.25MM B Bond, Upgraded to A2 (sf); previously on
      Jun 22, 2011 Baa2 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR11.7MM C Bond, Upgraded to Baa3 (sf); previously on
      Jun 22, 2011 Ba3 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR19.8MM D Bond, Upgraded to B1 (sf); previously on
      Jun 22, 2011 Caa2 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR7.35MM E Bond, Upgraded to Caa2 (sf); previously on
      Jun 22, 2011 Caa3 (sf) Placed Under Review for Possible
      Upgrade

   -- EUR10MM Q Bond, Upgraded to Aaa (sf); previously on Jun 22,
      2011 Baa1 (sf) Placed Under Review for Possible Upgrade

   -- EUR6MM R Bond, Confirmed at Caa1 (sf); previously on
      June 22, 2011 Caa1 (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 Q,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date minus the aggregate of
all payments made from the Issue Date to such date, either
through interest or principal payments. For Class R, the 'Rated
Balance' is equal at any time to the principal amount of the
Combination Note on the Issue Date increased by a Rated Coupon of
1% 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

Leveraged Finance Europe Capital B.V., issued in August 2004, is
a single currency Collateralised Loan Obligation backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by BNP Paribas. The reinvestment period of this
transaction ended in October 2009. 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 deleveraging of the senior notes since the
rating action in October 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) 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 (2) adjustments to the equity
cash-flows haircuts applicable to combination notes.

Moody's observes that including the latest payment which took
place on October 13, 2011, the Class A notes have been paid down
by approximately 47% or EUR99.7 million since the rating action
in October 2009. As a result of the deleveraging, the
overcollateralization ("OC") ratios have increased since the
rating action in October 2009. As of the latest trustee report
dated October 13, 2011, the Senior and Class C OC ratios are
reported at 123.2% and 114.7%, respectively, versus August 2009
levels of 119.3% and 113.8%, respectively. Ratios reported in
October 2011 do not reflect the principal repayment made on
October 13, 2011. At the same time, Class E notes have been
partially redeemed by approximately EUR3.5 million since the last
rating action in October 2009, due to the diversion of interest
following the failure of Class E OC test. As at October 2011,
Class E OC test is still failing but Class E has stopped
amortizing because Class D OC tests fails as well and cash flows
are now diverted to Class A.

Moody's notes that the reported WARF has increased from 2613 to
3640 between August 2009 and October 2011. Additionally, reported
defaulted securities total about EUR12.2 million of the
underlying portfolio compared to EUR18.9 million in August 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 EUR180 million,
defaulted par of EUR20 million, a weighted average default
probability of 39.49% (consistent with a WARF of 3949), a
weighted average recovery rate upon default of 47.83% for a Aaa
liability target rating, a diversity score of 25 and a weighted
average spread of 2.99%. 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 94.6% 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, which could negatively impact the
ratings of the notes, 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 either positively or negatively
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 and
3) Additional expected loss associated with the 16.7% exposure to
third parties in this transaction may also impact negatively the
ratings.

Sources of additional performance uncertainties are:

(1) Deleveraging: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio. Pace of amortization could vary significantly subject
to market conditions and this may have a significant impact on
the notes' ratings. In particular, amortization could accelerate
as a consequence of high levels of prepayments in the loan market
or collateral sales by the liquidation agent / the Collateral
Manager] or be delayed by rising loan amend-and-extent
restructurings. Fast amortization would usually benefit the
ratings of the notes.

(2) Moody's also notes that around 72% 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.

(3) 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. Realization of higher than expected recoveries
would positively impact the ratings of the notes.

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 EMEA
Cash-Flow model.

This model was used to represent the cash flows and determine the
loss for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche.

As such, Moody's analysis encompasses the assessment of stressed
scenarios.

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.


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


CENTRAL EUROPEAN: Moody's Cuts Corporate Family Rating to 'B3'
--------------------------------------------------------------
Moody's Investors Service has downgraded by one notch to B3 from
B2 the corporate family rating (CFR) and probability of default
rating (PDR) of Central European Distribution Corporation (CEDC).
The rating on the company's senior secured notes due in 2016
issued by CEDC Finance Corporation International has also been
downgraded by one notch to B2 from B1. The outlook is negative.

Ratings Rationale

"The decision to downgrade CEDC's CFR and PDR to B3 follows
weaker than expected results during the first nine months of 2011
and Moody's view that CEDC's operating performance will remain
under pressure over the intermediate term. As a result, the group
will be challenged to maintain a pro-forma financial leverage in
line with a B2 rating (i.e. around 6x) at FYE December 2011,"
says Paolo Leschiutta, a Moody's Vice President-Senior Credit
Officer and lead analyst for CEDC.

CEDC's results for the three months ending September 30, 2011
showed an underlying operating income (adjusted for restructuring
and impairment costs) of US$36.2 million, which was significantly
below Moody's expectations. Furthermore, during the third quarter
2011, the company's results were affected by impairment charges
of approximately US$675 million, mainly related to RAG's Russian
activities and restructuring at the Polish brand, Bols. Moody's
does not expect the remaining part of the year to compensate for
the decline recorded thus far given the still soft demand for
vodka as well as the relatively high inflationary trends in
Russia, both of which are expected to continue over the next few
quarters. Although Moody's was expecting a degree of
deterioration in profitability compared to last year, the
deterioration experienced so far was higher than anticipated.

The drop in profitability during the first nine months of the
year was largely due to (i) lower than expected volumes in Russia
(in turn, 15% down in Q1 2011, 17% down in Q2 2011 and only 3% up
in Q3 2011 in comparison to the same quarters in 2010) given a
general decline in market consumption and the impact of license
renewal in the Russian spirits industry; (ii) increasing raw
material costs in both Poland and Russia, with spirits costs
increasing by US$17 million during the first nine months of 2011;
and (iii) higher marketing costs and an adverse sales mix trend
in Poland, as the company launched new value brands with a lower
price tag; which, however, helped CEDC to recover some market
share. These factors offset the impact of Whitehall Group's
consolidation (from February 2011) on CEDC's accounts.

Moody's recognizes that CEDC did report top-line growth during
the first nine months of 2011, with net sales of US$597.6 million
up by almost 24% from US$483.2 million over the same period in
2010. However, this was mainly due to the consolidation of
Whitehall Group, which compensated for lower volumes in Russia
and more aggressive pricing in Poland. In addition, Moody's also
notes that volumes in Poland rose over the same period and CEDC
expects that the volume and value differential should reduce over
time, resulting in increasing profitability over the next
quarters.

More positively CEDC continues to enjoy solid market shares in
Russia and Poland on its vodka brands. Nonetheless, going
forward, Moody's expects volatility in consumer spending and
spirit prices to continue in both Poland and Russia. As a result,
the company will be more challenged to reduce its financial
leverage, measured as debt to EBITDA (pro-forma for the Whitehall
acquisition) to levels in line with a mid single-B rating, i.e.
with leverage around 6x.

Moody's, however, currently derives some comfort from the
company's liquidity profile, which benefits from US$111.2 million
in cash on balance sheet (as at the end of September 2011). This,
together with expected cash generation over the next 12 months,
covers for significant working capital seasonality during the
year and short-term debt maturities. Moreover, there are no
significant capex needs. However, following the early repayment
of CEDC's committed bank facility in April 2011, the company
partly relies on a number of short-term credit lines which are
uncommitted. That being said, CEDC signed a factoring agreement
last February, which represents a source of financing for the
company's working capital needs.

The negative outlook reflects Moody's view that the company's
operating performance might remain under pressure over the medium
term as market conditions and consumer spending, overall, remain
soft in Russia. Any pressure on CEDC's liquidity profile or
further deterioration in the company's operating performance
could result in further rating pressure . The rating could be
downgraded if CEDC's financial leverage (adjusted debt to EBITDA)
were to exceed significantly 7x by FYE 2011 with no evidence that
management could reduce financial leverage well below 7x by FY
2012. Although an upgrade is unlikely at the moment, positive
rating pressure could result from ongoing improvements in
profitability and cash flow generation, resulting in positive
free cash flow generation and in a reduction of financial
leverage towards 5.5x.

Downgrades:

   Issuer: Central European Distribution Corporation

   -- Corporate Family Rating and Probability of Default Rating,
      Downgraded to B3 from B2

   Issuer: CEDC Finance Corporation International

   -- Senior Secured Bond, Downgraded to B2, LGD3, 39% from B1

Outlook Actions:

   Issuers: Central European Distribution Corporation and CEDC
            Finance Corporation International

   -- Outlook, Changed To Negative From Stable

Principal Methodology

The principal methodology used in rating CEDC was the Global
Alcoholic Beverage Rating Methodology published in August 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Warsaw, Poland, CEDC is one of the largest vodka
producers in the world, with annual sales of around 32.7 million
nine-litre cases, mainly in Russia and Poland. Following
investments in Russia over the past two years and the recent
disposal of its distribution business in Poland, CEDC generated
net revenues of around US$711 million during FYE December 2010.
This amount excludes Whitehall Group, the importer and
distributor of premium spirits and wine in Russia which was
consolidated since February 2011 (Whitehall generated
approximately US$190 million revenues during 2010).


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


* REPUBLIC OF SAKHA: S&P Raises Issuer Credit Rating to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term issuer
credit rating on Republic of Sakha (Yakutia) to 'BB' from 'BB-'
and its Russia national scale rating to 'ruAA' from 'ruAA-'. The
outlook is Positive. The '3' recovery rating on Sakha's unsecured
debt remains unchanged.

"The upgrade reflects our view of Sakha's economic and revenue
growth and currently prudent financial policies, leading to sound
budgetary performance and a consistently strong liquidity
position," S&P related.

The ratings on Sakha are based on its dependence on federal
decisions regarding intergovernmental relations, expenditure
responsibilities, and tax regimes. Moreover, the high
concentration of its economy in natural resources extraction and
exposure to the volatility of world commodity markets,
exacerbated by dependence on a single taxpayer, are ratings
constraints. Sakha's vast territory, remote location, and severe
subarctic climate require further development of transport and
utility infrastructure. Furthermore, fuel-operating and capital-
spending needs also constrain the republic's creditworthiness.

Sakha's relatively high economic wealth in a national context,
and continued massive investments in local infrastructure and the
mining sector are expected to shore up the republic's revenues in
the medium term, which supports the ratings. Substantial
transfers from the federal government also underpin the
republic's sound budgetary performance. The management's
currently cautious debt policy results in a low debt burden and
strong liquidity, which is also positive for the ratings.

"The positive outlook reflects our view that Sakha's revenue
growth, backed by continued federal support and increasing tax
revenues from natural resources extraction, might result in a
consistently sound budgetary performance. It also takes into
account our expectation that the debt burden will remain
modest, and that Sakha's management will maintain its prudent
debt policies with debt service of about 3%-4% of operating
revenues," S&P said.

"We could raise the ratings within the next year if larger
federal grants or tax revenues than we expect under our base-case
scenario lead to a sound budgetary performance with operating
balances of about 6%-8% of operating revenues and an even
stronger liquidity position in line with our upside-case
scenario. If Sakha contains the growth of tax-supported debt,
keeping it below 30% of consolidated operating revenues by 2013,
it would also be positive for the ratings," S&P said.

"We could revise the outlook to stable within the next year if
modest operating revenue growth and gradually decreasing federal
transfers (in line with our base-case scenario) or worsening
terms of trade lead to operating margins of about 2%-4% of
operating revenues and continued noticeable debt accumulation,
including that of companies Sakha owns," S&P said.


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


IM PRESTAMOS: Moody's Lowers Rating on Class A Notes to 'Ba3'
-------------------------------------------------------------
Moody's Investors Service has downgraded the rating of the notes
issued by IM Prestamos Fondos Cedulas, FTA, and the liquidity
facility available to this issuer.

Issuer: IM Prestamos Cedulas, FTA

   -- EUR344,100,000 (current rated balance EUR234.6 million)
      Class A Notes, Downgraded to Ba3 (sf) and Remains On Review
      for Possible Downgrade; previously on Apr 27, 2011
      Downgraded to Baa3 (sf) and Placed Under Review for
      Possible Downgrade

   -- EUR6,900,000 (current rated balance EUR4.4 million) Class
      B Notes, Downgraded to Caa1 (sf) and Remains On Review for
      Possible Downgrade; previously on Apr 27, 2011 Downgraded
      to B2 (sf) and Placed Under Review for Possible Downgrade

   -- EUR900,000 Class C Notes, Downgraded to Caa2 (sf) and
      Remains On Review for Possible Downgrade; previously on
      April 27, 2011 Downgraded to Caa1 (sf) and Placed Under
      Review for Possible Downgrade

   -- EUR30,000,000 (currently undrawn) Liquidity Facility,
      Downgraded to A1 (sf) and Placed Under Review for Possible
      Downgrade; previously on Dec 30, 2009 Confirmed at Aaa (sf)

This transaction is a static cash CBO of portions of subordinated
loans funding the reserve funds of 9 (at closing 14) Spanish
multi-issuer covered bonds (SMICBs), which can be considered as a
securitization of a pool of Cedulas. Each SMICB is backed by a
group of Cedulas which are bought by a Fund, which in turn issues
SMICBs. Cedulas holders are secured by the issuer's entire
mortgage book. The subordinated loans backing the IM Prestamos
transaction represent the first loss pieces in the respective
SMICB structures (or structured Cedulas). Therefore this
transaction is exposed to the risk of several Spanish financial
institutions defaulting under their mortgage covered bonds
(Cedulas).

The liquidity facility may be drawn to fund the difference
between interest accrued and due on the subordinated loans of the
9 SMICBs and interest actually received on these loans. The
amount drawn under this facility is thus a function of (i) number
and value of underlying delinquent and defaulted Cedulas, (ii)
level of 3 month EURIBOR and (iii) time taken for final
realization of recoveries on defaulted Cedulas. While the
liquidity facility is currently not drawn, Moody's assumes in its
analysis that a portion of it will be drawn at some time during
the remaining life of this transaction.

Ratings Rationale

Moody's said the rating action is a result of: (i) a further
decline in credit quality of many of the issuers of Cedulas which
make up the SMICBs, (ii) the downgrade of Spain's sovereign
rating and (iii) increase in refinancing margins observed in
Spain. As a result, Moody's loss expectations for all underlying
covered bonds within the SMICBs have increased. Moody's considers
that should a Cedulas issuer default, it is likely that the
reserve funds that form the underlying portfolio of IM Prestamos
would require to be drawn upon to make good the potential
shortfall suffered by the underlying Cedulas holders. The extent
of such potential shortfall is dependent on the level of over
collateralization and quality of the issuer's underlying mortgage
pool. Moody's analysis indicates that in the light of such
potential shortfalls, the credit quality of the reserve funds of
the 9 SMICBs that form the portfolio of IM Prestamos Fondos
Cedulas is presently more consistent with ratings in a B1(sf)-
Ba2(sf) range compared to a Ba3(sf)- Baa2(sf) range in April
2011.

Of the 9 SMICBs whose reserve funds constitute the transaction
portfolio, 5 were recently downgraded by 3 notches and 1 by two
notches, pursuant to an increase in Moody's loss expectations for
all underlying covered bonds within these and other SMICBs. For
more details on recent rating actions on multiple Spanish multi-
issuer covered bonds, please refer 'Moody's downgrades multiple
Spanish multi-cedulas' published on October 20, 2011. In
addition, ratings of all these 9 SMICBs remain on review for
possible further downgrade; accordingly, the rating of the
liquidity facility available to IM Prestamos and the issued notes
also remain on review for possible further downgrade.

The credit quality of the reserve funds of these 9 SMICBs is
substantially driven by high recovery rate assumptions on the
underlying Cedulas. The ratings of the liquidity facility
available to IM Prestamos Fondos Cedulas, FTA and the issued
notes are thus sensitive to these recovery rate assumptions.

In addition, the credit quality of the liquidity facility is
affected by the estimated level of draw-down, with higher draw-
downs resulting in declining credit quality. As stated earlier,
draw-down is affected by (i) number and value of delinquent and
defaulted Cedulas, (ii) three month EURIBOR rates and (iii) time
taken for realization of final recoveries on defaulted Cedulas.

Moody's base case scenario assumes that the liquidity facility is
drawn down to the extent of EUR 15 million. This level of draw
down reflects (i) a vast majority of the underlying pool being
delinquent or in default, (ii) ongoing 3 month EURIBOR at current
levels, and (iii) roughly two years from Cedulas default to final
recoveries.

Moody's undertook a number of sensitivity runs assuming lower and
higher draw down amounts for the liquidity facility. For the
liquidity facility, the model output for an EUR10 million draw
down was 2 notches better compared to the base case, whereas it
was 2 notches worse than base case for draw down amount of EUR 20
million.

The model outputs for the notes were affected by about half a
notch for an increased correlation of c 60% between the
underlying assets in the transaction portfolio. Except for the
increased correlation of c 60% used in the sensitivity run for
the notes, underlying Cedulas default probabilities and recovery
rates used in Moody's model are in line with the covered bond
rating methodology assumptions.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy especially as 100% of the
portfolio is exposed to obligors located in Spain 2) fluctuations
in EURIBOR and 3) the recovery of defaulted assets and the timing
of final recoveries on defaulted Cedulas. Realization of higher
than expected recoveries would positively impact the ratings of
the notes.

The principal methodology used in this rating was "Moody's
Approach to Rating Corporate Collateralized Synthetic
Obligations" published in September 2009.

In rating this transaction, Moody's used CDOROM to model the cash
flows and determine the loss for each tranche. The Moody's
CDOROM(TM) is a Monte Carlo simulation which takes the Moody's
default probabilities as input. Each corporate reference entity
is modelled individually with a standard multi-factor model
incorporating intra- and inter-industry correlation. The
correlation structure is based on a Gaussian copula. In each
Monte Carlo scenario, defaults are simulated. Losses on the
portfolio are then derived, and allocated to the notes in reverse
order of priority to derive the loss on the notes issued by the
Issuer. By repeating this process and averaging over the number
of simulations, an estimate of the expected loss borne by the
notes is derived. As such, Moody's analysis encompasses the
assessment of stressed scenarios. 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.


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


SAAB AUTOMOBILE: Can Still Enjoy Creditor Protection
----------------------------------------------------
Johan Sennero at Reuters reports that Guy Lofalk, the court-
appointed lawyer overseeing a reconstruction process for Saab
Automobile, said the carmaker will still for now enjoy legal
protection from creditors.

The statement came after General Motors rejected a Chinese bid
for the company, Reuters relates.

According to Reuters, GM said on Monday it would stop supplying
components and technology to Saab if two Chinese companies
succeeded with their acquisition bid -- a hardening in its
opposition to the proposed sale of Saab which called into
question the survival of the niche brand, which has been under
court protection from creditors since September.

"We will now try to get clarity about what the decision from GM
means and if there is any way ahead," court-appointed
administrator Guy Lofalk told Reuters.

It would be Mr. Lofalk's decision to apply to the court to end
the bankruptcy protection process, Reuters states.  He said that
could happen, but declined to say under what circumstances,
Reuters notes.

The reconstruction involves Mr. Lofalk plotting a future for the
company in talks with its creditors, mainly suppliers who are
owed about EUR150 million, Reuters discloses.  He has to make
sure the company has a viable future and the Chinese bid was key
to that, according to Reuters.

He said talks were taking place between Saab owner Swedish
Automobile and Chinese investors, Pang Da Automobile Trade Co and
Zhejiang Youngman Lotus Automobile, Reuters relates.

                      About Saab Automobile

Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.

Swedish Automobile N.V. disclosed that Saab Automobile AB and its
subsidiaries Saab Automobile Powertrain AB and Saab Automobile
Tools AB received approval for their proposal for voluntary
reorganization from the Court of Appeal in Gothenburg,
Sweden on Sept. 21, 2011.  The purpose of the voluntary
reorganization process is to secure short-term stability while
simultaneously attracting additional funding, pending the inflow
of the equity contributions by Pang Da and Youngman.


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


PETROPLUS HOLDINGS: Moody's Cuts CFR to 'B2'; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from B1 the
corporate family and probability of default ratings of Petroplus
Holdings AG and to B3/LGD 5 (77) from B2/LGD 5 (80) the ratings
assigned to the US$1.6 billion senior unsecured bonds issued by
Petroplus Finance Limited. This concludes the review for possible
downgrade process initiated by Moody's on August 10, 2011. The
outlook on all ratings is negative.

Ratings Rationale

The rating downgrade reflects the marked deterioration in
operating performance and cash flow generation reported by
Petroplus over the last six months. This has been driven by an
extended period of weakness in the European refining market, a
sluggish economic recovery amid persistent overcapacity, high
crude oil prices and unfavorable crude differentials resulting in
particular from the loss of supplies from Libya. Petroplus has
been particularly impacted by the disruptions caused by the
Libyan conflict in 2011 given that light-sweet crudes represent
the main feedstock processed by its refineries. As a result,
Petroplus reported a cumulative clean EBITDA of US$60 million for
Q2 and Q3 2011, compared to US$230 million for the same period in
2010.

While Petroplus recently reported some improvement since the
start of Q4 2011, in crude differentials and product cracks
reflecting low European inventory levels, Moody's expects that
the European refining market conditions will remain challenging
as new capacity comes on stream in Middle East and Asia, at a
time of heightened macroeconomic uncertainty. As a result,
despite the notable progress reported to date by Petroplus in the
implementation of its three-year improvement plan, Moody's
believes that the group's operating profitability is likely to
remain under pressure over the coming quarters. In turn, this is
expected to constrain the group's overall cash flow generation
and raise debt leverage, which was 4.7x (as measured by reported
Debt to clean EBITDA post G&A) in the last twelve months to
September 2011.

Moody's notes that the banking syndicate supporting the liquidity
requirements of Petroplus with US$1.05 billion of committed
credit facilities and US$1.06 billion of uncommitted credit
facilities have accepted to waive for the next three quarters (up
to Q1 2011 included) the financial covenant, which requires the
group to maintain a clean group EBITDA to Net Interest Expense
ratio above 2.5x. Therefore, the next covenant test will now take
place in August 2012, when the group report its Q2 2012 results.
This should give Petroplus time to negotiate the extension of its
revolving credit facility, which expires in October 2012, and/or
put in place alternative arrangements to fund working capital
needs.

The negative outlook however reflects Moody's concern that in
view of the ongoing challenging trading conditions prevailing
within the European refining sector, Petroplus may be challenged
to generate positive cash flow in the near to medium term and
meaningfully deleverage its financial profile ahead of the 2014
bond maturity. In addition, while acknowledging that the extended
covenant waiver obtained by the group helps remove immediate
constraints on its liquidity profile, Moody's will closely
monitor the progress made by Petroplus over the next few months,
in securing a sustainable and more flexible funding arrangement
to meet its ongoing liquidity requirements.

Failure to demonstrate the ability to contain negative free cash
flow below US$150 million in the six months to the end of March
2012 and/or make tangible progress with the refinancing of its
revolving credit facility would lead to negative pressure on the
ratings.

Conversely, a stabilization of the outlook would be predicated on
a marked improvement in operating performance and return to
positive free cash flow generation that would allow some
meaningful balance sheet deleveraging with Debt to EBITDA (on a
fully adjusted basis) falling below 4 times on a sustainable
basis.

The principal methodology used in rating Petroplus was the Global
Refining and Marketing Rating Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Petroplus is the largest European independent refiner with a
total throughput capacity of 667 thousand barrels per day and a
Nelson complexity factor of 8.3. Petroplus was established and
expanded through the acquisition of several refineries over the
last four-five years. Petroplus is currently operating five
refineries while its Teeside refinery has been transformed into a
terminal and storage facility, and its Reichstett refinery site
is being converted into a marketing and storage facility.
Petroplus reported revenues of US$20,735 million and a clean
EBITDA of US$550 million for the fiscal year ended December  31,
2010.


* SWITZERLAND: Moody's Says Diversity Helps Firms Navigate Franc
----------------------------------------------------------------
The effect on rated Swiss corporate issuers of the Swiss franc's
steady appreciation over the past 12 months has varied depending
on their level of international diversification, according to a
new report published by Moody's Investors Service. Issuers with
excessive Swiss franc costs compared with revenues have been
particularly negatively affected. Geographically diverse issuers
reporting in Swiss francs have reported lower revenues and
earnings as a result of the translation of the results of
overseas subsidiaries for inclusion in the consolidated accounts.
Moreover, the continued appreciation of the Swiss currency can
lead to an apparent reduction in leverage for companies that
report in Swiss francs but that have most of their debt raised in
foreign currencies. Weakening operating performance and
strengthening leverage resulting solely from currency translation
can be misleading indicators of creditworthiness.

According to the report, particularly hard hit have been issuers
that incur a disproportionate amount of their costs in Swiss
francs compared with revenues. Clariant AG (Ba1 positive) and
Roche Holding AG (A1 stable) have reported lower operating
margins as a result of this cost/revenue mismatch.

"The majority of rated Swiss-based corporate issuers that report
in Swiss francs are geographically diversified in terms of both
costs and revenues and have limited operations and sales in
Switzerland", said Sebastien Cieniewski, analyst and co-author of
the report. With the continued appreciation of the Swiss
currency, these companies reported revenues and earnings that are
lower than revenue and earnings reported on a constant currency
basis, as their international operations were translated for
inclusion in the consolidated accounts. Global food producer
Nestle S.A. (Aa1 stable) falls into this category.

Rated corporate issuers reporting in Swiss francs issue most of
their debt in foreign currencies in order to fund overseas
operations. In the context of the recent sustained appreciation
of the Swiss franc, the mechanism of translation of these
overseas' operations and borrowings can give rise to an apparent
reduction in leverage while fundamentals might have remained
unchanged.

The Swiss National Bank's (SNB) move to effectively peg the Swiss
franc to the euro represents a credit positive for issuers with
more significant operations based in Switzerland because it will
prevent a further weakening of operating margins. In the short
term it will relieve some pressure on the country's exporters.
However, in the long term, a realignment of a company's cost
structure to better reflect revenues generated in different
currencies is the most efficient hedge against currency
volatility.


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


BIG WHEEL: Owner Apologizes for Harvest Festival Failure
--------------------------------------------------------
thecmuwebsite.com reports that former Blur member Alex James has
apologized to organizations owed money with regards to the
Harvest Festival, that was to be held at his farm, as it was
discovered that the promoters went into administration.

Big Wheel Promotions went into administration owing over 100
creditors money, including a local primary school that is owed
GBP7,000 in addition to other artists and stall holders,
according to thecmuwebsite.com.

The report notes that Mr. James wrote a letter to all of those
affected, stating: "I am appalled by Big Wheel's financial
management of the festival held at my farm, which has left many
out of pocket . . . .  Please be aware that I have no
relationship with Big Wheel, beyond allowing them to stage the
Harvest Festival at my farm and - regrettably - to use my name to
stage the event.  At no stage was there ever any indication that
they would be unable to meet their costs.  The news has come as a
complete bolt from the blue."


CARBONDESK LTD: Put Into Company Voluntary Arrangement
------------------------------------------------------
StockMarketWire.com reports that CarbonDesk Limited has admitted
that it no longer has enough cash to continue to pay its debts.

According to StockMarketWire.com, the funds that the company has
raised have not materialized and, as a result, Carbondesk Group
has put its wholly owned subsidiary, CarbonDesk, into a Company
Voluntary Arrangement.

Paul. H Finn and Michael Field have been appointed as the
administrators, StockMarketWire.com discloses.

London-based CarbonDesk Limited is an independent, specialist
broker operating in emissions markets worldwide.


LANDMARK MORTGAGE: Fitch Lifts Rating on Class D Notes to 'CCC'
---------------------------------------------------------------
Fitch Ratings has upgraded one and affirmed 11 tranches of
Landmark Mortgage Securities (Landmark) 1 and 2, a series of UK
non-conforming RMBS transactions.  The upgrade affects the junior
Class D note on the Landmark 2 transaction.  The Outlook on the
Class C notes has also been revised to Stable from Negative.

The rating actions reflect the stable performance of the
underlying collateral, gross excess spread levels, and the
sufficient level of credit enhancement available for the notes.

The Landmark transactions are composed of mortgage assets
originated by Amber Home Loans, Unity Home Loans and Infinity
mortgages.  The weighted average original loan-to-value ratios at
close were quite high at 79.4% for Landmark 1 and 81.0% for
Landmark 2, with the bulk of loans originated in 2005 and 2006.

Landmark 1 has shown a more stable performance trend in the past
year, as borrowers continue to benefit from the continued low
interest rate environment.  The exception to this comes in the
past quarter, with an increase in repossessions, which most
likely also accounts for the fall in arrears during the same
period.

Excess spread has been predominately used to cover losses, which
has stunted the replenishment of the reserve fund.  However, the
expiration of the detachable A coupons (DAC) in June 2011 could
contribute to excess spread in the future.  As of the June 2011
interest payment date (IPD), the DACs (Aa and Ac) captured
GBP117,779 of available revenue receipts which equated to 0.16%
of the collateral balance.

Borrowers in Landmark 2, with 100% on variable-rate mortgages,
have also benefitted from the continued prevailing low interest
rate environment, with arrears levels stable and the value of
outstanding repossessed stock at 1.4% of the current collateral
balance.  In terms of arrears, the transaction has performed
better than its predecessor, with the current volume of loans in
arrears by three months or more at the lower value of 23.3%.  The
reserve fund is also in a better position, now fully replenished
to its target level - the result of a higher level of excess
spread.

The upgrade of the junior class D note and the revision of the
Outlook on the class C note to Stable from Negative is a direct
result of this performance and the increase in credit enhancement
that has resulted from the reserve fund reaching full capacity.

The rating actions are as follows:

Landmark Mortgage Securities No.1 Plc:

  -- Class Aa (ISIN XS0258051191): affirmed at 'AAAsf'; Outlook
     Stable;

  -- Class Ac (ISIN XS0260674725): affirmed at 'AAAsf'; Outlook
     Stable;

  -- Class B (ISIN XS0260675888): affirmed at 'Asf'; Outlook
     Stable;

  -- Class Ca (ISIN XS0258052165): affirmed at 'BBsf'; Outlook
     Stable

  -- Class Cc (ISIN XS0261199284): affirmed at 'BBsf'; Outlook
     Stable

  -- Class D (ISIN XS0258052751): affirmed at 'Bsf'; Outlook
     Stable

Landmark Mortgage Securities No.2 Plc:

  -- Class Aa (ISIN XS0287189004): affirmed at 'AAsf'; Outlook
     Stable

  -- Class Ac (ISIN XS0287192727): affirmed at 'AAsf'; Outlook
     Stable

  -- Class Ba (ISN XS0287192131): affirmed at 'BBsf'; Outlook
     Stable

  -- Class Bc (ISIN XS0287193451): affirmed at 'BBsf'; Outlook
     Stable

  -- Class C (ISIN XS02871922141): affirmed at 'Bsf'; Outlook
     revised from Negative to Stable

  -- Class D (ISIN XS0287192644): upgraded to 'CCCsf' from
     'CCsf';

  -- Recovery Rating revised to 'RR4' from 'RR5'


SPIRIT ISSUER: Fitch Affirms Ratings on Five Note Classes to 'BB'
-----------------------------------------------------------------
Fitch Ratings has affirmed Spirit Issuer plc's (Spirit) notes at
'BB' with a Stable Outlook and removed them from Rating Watch
Negative (RWN).  The notes were placed on RWN following the
publication of the agency's updated Whole Business Securitisation
(WBS) criteria

Spirit is a whole business securitization of 643 managed pubs and
548 leased and tenanted pubs across the UK owned and operated by
Spirit Pub Company plc (as of August 1, 2011, following the
demerger from Punch Taverns plc).

Since Fitch's review in February 2011, the overall performance of
the portfolio has improved, with three quarters of moderate q-o-q
trailing 12-month (TTM) EBITDA per pub growth.  This has been
predominantly driven by the more food-focused managed division
(food c.40% total revenues), which has demonstrated strong q-o-q
TTM EBITDA growth for five consecutive quarters (albeit from a
weak base).  However, the traditional wet-led pubs, which make up
the majority of the tenanted estate, are continuing to suffer
from the long-term market trends of declining beer consumption
and weakening on-trade performance.

Spirit was demerged from Punch Taverns plc effective August 1,
2011.  This is expected to improve the group's ability to react
to changing economic and market environments and implement its
long-term strategy of conversion to 100% managed pubs in the
portfolio as a result of having a single, dedicated management
team whose interests are directly aligned with those of the
business.  Additionally, they are strategically well-positioned
in terms of the current industry trends, focusing on the growing
eating-out market.

At a macro level, Fitch expects Spirit's performance to remain
correlated with that of the UK economy, which has yet to
stabilize fully and potentially faces years of weak growth as
consumers, corporations and the government deleverage and the
negative impacts of the euro zone crisis play out.  The
combination of high unemployment (8.1%: October 2011), increasing
retail price inflation (5.6%: October 2011), the earlier increase
of VAT to 20%, alcohol duties and uncertainties regarding the
political and regulatory agenda will continue to put pressure on
the long-term performance of the pub industry.  However, the
managed division has demonstrated strong performance during FY11
(LFL sales up 5.2%) and Fitch believes there is significant
untapped growth potential due to both the three-year investment
program and the fact that many of the Spirit brands have recently
been established and are currently performing well.  In the
medium term, Fitch expects some EBITDA growth in the managed
division, whilst tenanted EBITDA is forecast to decline slightly,
resulting in mild combined growth.

The reported annual free cash flow (FCF) debt service coverage
ratio (DSCR) as of August 2011 was 2.01x on an interest only
basis.  This is forecast to significantly decrease as principal
payments begin in 2014.  The annual FCF DSCR is therefore
expected to fluctuate around the 1.4x covenant level, reaching a
forecast minimum of 1.1x in 2015, and approaching this level
again in 2026.  These point in time stresses, (caused by the
prepayment of 29.2% (GBP364.9 million) of the initial debt prior
to FY2011, which has resulted in an uneven debt profile) are
mitigated by the transaction's credit enhancements, including the
sizeable liquidity facility (covering 18 months of peak debt
service) and the potentially substantial amount of trapped cash
which could accumulate by then (given the RPC covenant level of
1.7x which includes an annuity style amortization schedule).
Additionally, with regards to the forecast of FCF (after-tax),
Fitch has been advised by management that the interest expense
incurred due to the subordinated intercompany loans is fully tax
deductible and is therefore functioning as an efficient tax-
shield.

Fitch used its UK whole business securitization criteria to
review the transaction structure, financial data and cash flow
projections.

The notes' ratings are as follows:

  -- GBP144.7m Class A1 notes due 2028: affirmed at 'BB'; off
     RWN, Outlook Stable

  -- GBP188.6m Class A2 notes due 2031: affirmed at 'BB'; off
     RWN, Outlook Stable

  -- GBP116.7m Class A3 notes due 2021: affirmed at 'BB'; off
     RWN, Outlook Stable

  -- GBP248.2m Class A4 notes due 2027: affirmed at 'BB'; off
     RWN, Outlook Stable

  -- GBP187.0m Class A5 notes due 2034: affirmed at 'BB'; off
     RWN, Outlook Stable


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


* BOOK REVIEW: Abraham Zaleznik's Learning Leadership
-----------------------------------------------------
Author: Abraham Zaleznik
Publisher: Beard Books
Hardcover: 548 pages
Listprice: $34.95
Review by Henry Berry

The lesson in Learning Leadership -- The Abuse of Power in
Organizations is to "use power so that substance leads process."
This is done, says the author, by keeping the "content of work at
the center of communication."

The premise of this intriguing book is that many managers,
executives, and other business leaders allow "forms of
communication [to become] the center of work."  As a result,
misguided and counterproductive leadership and management
practices have settled into many organizations.  A culprit is the
popular "how-to" leadership manuals that offer simple,
superficial principles that only skim the surface of leadership.
Zaleznik argues that the primary way to get work done is to put
aside personal agendas and deal directly with those who are
involved in the work.
With this emphasis on substance over process, the concept of
leadership lies not in techniques, but personal qualities. The
essential personal qualities of leadership are captured by the
"three C's" of competence, character, and compassion.  The author
then delves more deeply into each of these C's.  We learn, for
example, that the three C's are not learned skills.  Competence
entails "building one's power base on talent."

Character and compassion are the two other qualities of a leader
that must be present before there is any talk about methods of
operation, lines of communication, definition of goals, structure
of a team, and the like.  There is more to character that the
common definition of the "quality of the person."  Character also
embraces, says the author, the "code of ethics that prevents the
corruption of power."  Compassion is defined as a "commitment to
use power for the benefit of others, where greed has no place."
This concept of a good leader is not idealized or unrealistic.
It takes into account human nature and the troubling behavior of
many leaders.  Of course, any position of leadership brings with
it temptations and the potential to abuse power.  Effective
leaders are those who "take responsibility for [their] own
neurotic proclivities," says the author.  They do this out of a
sense of the true purpose of leadership, which is communal
benefit.  The power holder will "avoid the treacheries of an
unreasonable sense of guilt, while recognizing the omnipresence
of unconscious motivation."

Zaleznik's definition of the essentials of leadership comes from
his study of notable (and sometime notorious) leaders.  Some
tales are cautionary.  The Fashion Shoe Company illustrates the
problems that can occur when a leader allows action to overcome
thought. The Brandon Corporation illustrates the opposite
leadership failing -- allowing thought to inhibit action.  Taken
together, the two examples suggest that balance is needed for
good leadership.  Andrew Carnegie exemplifies the struggle
between charisma and guilt that affects some leaders.  Frederick
Winslow Taylor is seen by the author as an obsessed leader.  From
his behavior in the Sicilian campaign in World War II, General
Patton is characterized as a leader who violated the code binding
leaders and those they lead.

With his training in psychoanalysis and his experience in the
business field, Zaleznik's leadership dissections and discussions
are instructive.  The reader will find Learning Leadership -- The
Abuse of Power in Organizations to be an engaging text on the
human qualities and frailties of leaders.

Abraham Zaleznik is emeritus Konosuke Matsushita Professor of
Leadership at the Harvard Business School.  He is also a
certified psychoanalyst.


                            *********

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, 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 * * *