TCREUR_Public/111221.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, December 21, 2011, Vol. 12, No. 252

                            Headlines



B E L A R U S

BELAGROPROMBANK JSC: S&P Reviews 'B-' Counterparty Credit Rating


C Y P R U S

K & M FAMAGUSTA: Inability to Pay Debts Prompts Wind-Up Order


F R A N C E

QUINTA INDUSTRIES: Placed in Judicial Liquidation


G R E E C E

GENERAL BANK: Moody's Reviews 'B3' Deposit Ratings for Downgrade


H U N G A R Y

OTP BANK: Moody's Confirms 'Ba2' Foreign Currency Deposit Rating


I R E L A N D

* IRELAND: REI Expects Wave of Business Failures in Retail Sector


I T A L Y

AEROPORTI DI ROMA: Moody's Downgrades Debt Ratings to 'Ba2'
BANCA MONTE DEI PASCHI: Reaches Debt Standstill with Lenders
FASTWEB SPA: Swisscom to Face EUR1.3-Billion Impairment Charge
SEAT PAGINE: Extends Debt Restructuring Deadline to Jan. 16


L A T V I A

SC CITADELE: Moody's Lowers Long-Term Deposit Rating to 'B2'


N E T H E R L A N D S

ZALCO: Files for Bankruptcy; Seeks Buyer for Plant


P O R T U G A L

BANCO COMERCIAL: S&P Reviews 'bb-' Stand-Alone Credit Profile


R U S S I A

UC RUSAL: Asks Lenders to Ease Terms on Loans


S L O V A K   R E P U B L I C

SLOVGLASS: To File for Bankruptcy; About 390 Jobs At Risk


S P A I N

BANCO DE VALENCIA: Moody's Cuts Rating on Two Spanish ABS Deals
BANCO DE VALENCIA: Moody's Downgrades Three Spanish RMBS Deals
PROMOTORA DE INFORMACIONES: Has Refinancing Deal with Banks


U K R A I N E

PRIVATBANK COMM'L: Moody's Changes Outlook on 'B3' Rating to Neg.
* CITY OF KYIV: Moody's Changes Outlook on 'B2' Issuer Ratings


U N I T E D   K I N G D O M

ENVELOPE PRINTING: Set For Liquidation; Owes More Than GBP1.2-Mil
HMV GROUP: Considers Selling HMV Live Unit to Cut Debt
THOMAS COOK: Unveils Turnaround Plan; Posts GBP398-Million Loss
YELL GROUP: Reaches Compromise Agreement with Lenders on Debt


                            *********


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B E L A R U S
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BELAGROPROMBANK JSC: S&P Reviews 'B-' Counterparty Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services reviewed its ratings on 13
banks in four countries of the Commonwealth of Independent States
(CIS) -- Azerbaijan, Belarus, Ukraine, and Uzbekistan -- and on
one bank in Georgia by applying its new ratings criteria for
banks.  This article lists the ratings on these banks,
highlighting any rating changes that resulted from applying our
new criteria.

"We will publish individual research updates on banks identified,
including a list of ratings on affiliated rated entities, as well
as the ratings by debt type -- senior, subordinated, junior
subordinated, and preferred stock. The research updates will be
available at www.standardandpoors.com/AI4FI and on RatingsDirect
on the Global Credit Portal. Ratings on specific issues will be
available on RatingsDirect on the Global Credit Portal and
www.standardandpoors.com following release," S&P said.

Ratings List

The ratings are counterparty credit ratings unless otherwise
stated.

BANKS IN AZERBAIJAN
Ratings Affirmed
                                 To               From
AGBank
                                 B-/Negative/C    B-/Negative/C

Muganbank OJSC
                                 CCC+/Stable/C    CCC+/Stable/C

BANKS IN BELARUS
Ratings Affirmed
                                 To               From
Belagroprombank JSC
                                 B-/Negative/C    B-/Negative/C

BPS-Sberbank
                                 B-/Negative/C    B-/Negative/C

JSC Savings Bank Belarusbank
                                 B-/Negative/C    B-/Negative/C

OJSC Belvnesheconombank
                                 B-/Negative/C    B-/Negative/C

BANKS IN UKRAINE
Ratings Affirmed
                                 To               From
Alfa-Bank Ukraine
                                 B-/Stable/C      B-/Stable/C
Ukraine National Scale Rating   uaBBB-           uaBBB-

PJSC KREDOBANK
                                 B-/Stable/C      B-/Stable/C
Ukraine National Scale Rating   uaBBB-           uaBBB-

BANKS IN UZBEKISTAN
Ratings Affirmed; Upgraded
                                 To               From

Amirbank
                                 CCC/Positive/C   CCC/Positive/C

Halk Bank
                                 B+/Stable/B      B/Stable/B

Kapitalbank
                                 B/Stable/C       B-/Stable/C

National Bank For Foreign Economic Activity Of The Republic Of
Uzbekistan
                                 B+/Stable/B      B/Stable/B

Uzpromstroybank
                                 B+/Stable/B      B/Stable/B

BANK IN GEORGIA
Upgraded
                                 To               From
Bank of Georgia
                                 BB-/Stable/B     B/Positive/B


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C Y P R U S
===========


K & M FAMAGUSTA: Inability to Pay Debts Prompts Wind-Up Order
-------------------------------------------------------------
Cyprus Property News reports that the Famagusta district court
has ordered the winding up of K & M Famagusta Developers and
Construction Ltd, after the company was deemed "unable to pay its
debts".

According to the report, the liquidation order was issued upon
the failure of the company to comply with previous court
decisions regarding a claim by one of the company's customers
that she was owed EUR50,000 by the company.  Famagusta Developers
has had several problems since it was set up in 2005 and was
struck off the Contractor Registration and Oversight Council
twice, the report notes.

The company's director, Kypros Kyprianou was placed on the stop
list and faced charges of fraud. This was just the latest of
several other run-ins with the law.

The report, citing daily newspaper Politic, reports that the
applicant had paid Famagusta Developers EUR50,000 as a down-
payment for an apartment in Paralimni that was eventually never
built.  Despite the breach of contract, the company had refused
to return the money to the woman, the report adds.

The company was found guilty on December 6, 2010 and was
instructed by a court order, issued on February 12, 2011 to repay
the amount within three weeks from the decision, Cyprus Property
News reports.

When the company failed to do so, the applicant subsequently
filed for a liquidation order against the company. There are
several other suits against the same company for similar cases
while there were also other liquidation applications pending
against the company.


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


QUINTA INDUSTRIES: Placed in Judicial Liquidation
-------------------------------------------------
Screen Daily reports that Tarak Ben Ammar's post-production group
Quinta Industries and film laboratories LTC were placed in
judicial liquidation by a French commercial court on Thursday.

Ben Ammar said in a statement issued late Thursday that the two
groups were direct victims of the rapid digitisation of France's
some 5,550 cinema screens.

Alluding to the 2009 closure of the historic GTC laboratories,
founded by Pathe and Gaumont in 1947, the Franco-Tunisian media
tycoon said: "Today, it's the turn of Quinta Industries and LTC
to suffer the same fate."

Citing French financial daily Les Echoes, Screen Daily discloses
that the group's losses amounted to EUR10 million at the end of
2010, for a turnover of some EUR40 million, EUR32 million of
which was generated by the LTC laboratories.

France's powerful National Cinema Centre schedules emergency
meeting with the administrators and key French players in the
post-production scene on December 22 to see if parts of group can
be salvaged, the report adds.

As reported in the Troubled Company Reporter-Europe on Nov. 9,
2011, Variety said Quinta Industries has been placed under
France's equivalent to Chapter 11 bankruptcy protection by a
French court.  The French-Tunisian exec owns 83% of the company,
while the remaining stake is owned by Technicolor, which came out
of bankruptcy protection in February, Variety disclosed.
Mr. Ben Ammar told French news agency AFP that with the bulk of
Quinta Industries' activities linked to production of 35mm
release prints, the acceleration of French theaters' digital
conversion over the last three months led to the company's
downfall, Variety related.

Quinta Industries is one of France's biggest post-production and
vfx facilities groups.  The group, which includes LTC, Scanlab
and Duran Duboi, employs nearly 200 staff.  It is part of Quinta
Communications, Tarak Ben Ammar's production and distribution
powerhouse.


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


GENERAL BANK: Moody's Reviews 'B3' Deposit Ratings for Downgrade
----------------------------------------------------------------
Moody's Investors Service has taken these rating actions on
Czech, Greek, Romanian and Russian subsidiaries of Societe
Generale (SocGen):

- General Bank of Greece's (Geniki) B3 deposit ratings, placed
   under review for downgrade

- BRD -- Societe Generale's Baa2/Prime-2 long-term and short-
   term local currency deposit ratings, placed under review for
   downgrade

- Rosbank's Baa2/Prime-2 long-term and short-term local and
   foreign currency deposit and Baa2 local currency senior
   unsecured debt ratings, placed under review for downgrade

- Rusfinance Bank's (Rusfinance) Baa3/Prime-3 long-term and
   short-term local and foreign currency deposit and Baa3 local
   currency senior unsecured debt ratings, placed under review
   for downgrade

- Bank DeltaCredit's (DeltaCredit) Baa2 long-term local and
   foreign currency deposit and Prime-2 short-term foreign
   currency deposit ratings, placed under review for downgrade

- DeltaCredit's local currency senior secured debt rating
   downgraded to Baa1 from A2 and assigned a negative outlook.
   This debt rating benefits from an explicit guarantee issued by
   SocGen

- Komercni Banka's long-term deposit ratings, downgraded to A2,
   with negative outlook, from A1; the short-term Prime-1
   ratings, unaffected. That action concludes the review of the
   bank's ratings initiated on 15 June 2011.

These actions follow the recent downgrade of French parent bank
SocGen's ratings. For more information on Moody's recent rating
actions on SocGen, please see the press release "Moody's
downgrades Societe Generale's long-term ratings to A1", dated 9
December 2011.

Ratings Rationale

Ratings Under Review for Downgrade

The primary reason for the reviews for downgrade on the ratings
of Geniki, BRD, Rosbank, Rusfinance and DeltaCredit is the
downgrade of SocGen's BFSR and long-term ratings. In its review,
Moody's will consider the potential impact on each subsidiary of
the lower ratings of the parent, as well as the rating agency's
view of the strategic fit of the subsidiaries' operations within
the group and the extent and nature of any financial linkages
between them.

The operating environment for euro area banking groups has
deteriorated significantly in recent months, driven by the
sovereign debt crisis and restricted access to unsecured
wholesale funding. Moody's notes that SocGen's announced
deleveraging plans concern its corporate and investment bank
rather than its international retail and commercial banking
operations. Nonetheless, many Western European banks, including
SocGen, are increasingly facing difficult choices with regard to
deploying their scarce capital and funding resources. This may
result in a decline in the willingness and/or capacity of the
parent companies to provide financial and managerial support to
their foreign subsidiaries, in Moody's view.

Although the ratings of the various subsidiaries are all on
review for similar reasons, Moody's will assess each individual
bank's positioning in the group and other relevant factors, as
described above.

Downgrade of DeltaCredit's Local Currency Senior Secured Debt

The downgrade to Baa1, with a negative outlook, from A2, of
DeltaCredit's senior secured debt reflects the explicit and
irrevocable guarantee issued by SocGen and the lowering of the
guarantor's ratings.

Downgrade of Komercni Banka's Deposit Ratings

The immediate downgrade to A2 from A1, of Komercni Banka's long-
term deposit ratings concludes the review of the bank's ratings
initiated on 15 June 2011 in conjunction with the review of the
parent. The downgrade reflects the weakened flexibility of the
French parent to support its Czech subsidiary, as well as the
sensitivity of the subsidiary's supported ratings to changes in
the standalone ratings of SocGen. Komercni Banka's long-term
deposit ratings continue to benefit from one notch of systemic
support, reflecting Moody's assumptions about support from the
Czech sovereign (A1, stable).

Moody's changed the outlook on the bank's stand alone financial
strength rating of C (mapping into A3) to negative, reflecting
the expectation of deterioration in the operating environment,
which, in Moody's opinion, could over time negatively impact the
bank's profitability and asset quality.

General Bank of Greece SA:

- Deposit rating of B3, on review for downgrade

- Standalone BFSR of E (mapping to Caa3), stable outlook

BRD:

- Local currency deposit ratings of Baa2/Prime-2, on review for
   downgrade

- Foreign currency deposit ratings of Baa3/Prime-3, stable
   outlook

- Standalone BFSR of D (mapping to Ba2), stable outlook

Rosbank:

- Local and foreign currency deposit ratings of Baa2/Prime-2, on
   review for downgrade

- Local currency senior unsecured debt rating of Baa2, on review
   for downgrade

- Standalone BFSR of D (mapping to Ba2), stable outlook

Rusfinance:

- Local and foreign currency deposit ratings of Baa3/Prime-3, on
   review for downgrade

- Local currency senior unsecured debt rating of Baa3, on review
   for downgrade

- Standalone BFSR of E+ (mapping to B1), stable outlook

DeltaCredit:

- Long-term local and foreign currency deposit ratings of Baa2
   and short-term foreign currency deposit rating of Prime-2, on
   review for downgrade

- Local currency senior secured debt rating of Baa1 with
   negative outlook

- Standalone BFSR of D (mapping to Ba2), stable outlook

Komercni Banka

- Long-term deposit rating of A2, negative outlook

- Short-term deposit rating of Prime-1

- Standalone BFSR of C (mapping to A3), negative outlook

Principal Methodologies

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

Headquartered in Athens, General Bank of Greece SA reported total
assets of EUR3.5 billion as of September 2011.

Headquartered in Bucharest, Romania, BRD reported total assets of
RON49.6 billion and total shareholders' equity of RON5.7 billion
as at December 31, 2010; net IFRS profit for 2010 stood at RON1
billion.

Headquartered in Moscow, Russia, Rosbank reported total assets of
US$14.9 billion and total equity of US$2.8 billion as at 31
December 2010; net IFRS income for 2010 stood at US$20.5 million.

Headquartered in Samara, Russia, Rusfinance reported total assets
of RUB82.8 billion and total shareholders' equity of RUB19.8
million as at 31 December 2010; net IFRS profit for 2010 stood at
RUB4 billion.

Headquartered in Moscow, Russia, DeltaCredit Bank reported total
assets of US$1.84 billion and total shareholders' equity of
US$296 million as at 31 December 2010; net IFRS profits for 2010
stood at US$58 million.

Headquartered in Prague, Komercni Banka reported CZK 748.6
billion in total assets at the end of September 2011.


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H U N G A R Y
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OTP BANK: Moody's Confirms 'Ba2' Foreign Currency Deposit Rating
----------------------------------------------------------------
Moody's Investors Service has downgraded the standalone ratings
of four Hungarian banks - K&H Bank, FHB Mortgage Bank, Erste Bank
Hungary and MKB Bank - and lowered the parental support uplift in
the deposit ratings for two foreign-owned banks - K&H Bank and
Budapest Bank; both factors have, in turn, resulted in the
downgrade of these banks' deposit and debt ratings: Budapest
Bank, K&H Bank, FHB Mortgage Bank, Erste Bank Hungary and MKB
Bank. All the banks' ratings carry a negative outlook.

The rating actions reflect three major issues (i) asset quality
has deteriorated quicker than initially expected, which will
likely continue throughout 2012; (ii) increasing pressure on
profitability and capital, partly due to the early repayment of
foreign currencies (FX) mortgages; and (iii) a risk of a
weakening in the parent banks' commitment to their Hungarian
operations.

For two other banks -- OTP Bank Nyrt and OTP Mortgage Bank --
Moody's has confirmed the local-currency and foreign-currency
deposit ratings, as well as the foreign-currency debt ratings of
OTP Bank Nyrt, with a negative outlook assigned to all the
ratings.

Ratings Rationale

-- RAPID DETERIORATION IN ASSET QUALITY

The rating agency notes that exposure to foreign-currency loans
is a major credit risk inherent in the Hungarian banking system
-- about 70% of Hungarian mortgages are denominated in FX of
which more than 90% are denominated in Swiss francs. The
Hungarian forint relative to the Swiss franc has weakened by
about 50% compared with the average 2005-08 exchange rate. This
devaluation has contributed to a significant growth of problem
loans in the household sector. Moody's notes that most of the
borrowers have no FX revenue and are therefore vulnerable to a
depreciation of the local currency.

In September 2011, the Hungarian government approved a law that
gives foreign-currency mortgage borrowers the option to repay the
full outstanding amount at exchange rates below market rates.
This law will likely trigger losses for the banks and affect
their capital positions, depending on the total take-up rate.
Moody's also believes that FX lending in the system will remain
significant, and that the relatively high leverage of Hungarian
households represents an acute problem in the banking system.

In addition, corporate loans are being negatively affected by the
weak performance of the commercial real estate and small and
medium enterprises (SME) sectors. The municipal sector is also
now facing greater debt repayment problems, which is exacerbating
the banks' already weak asset quality.

Moody's notes that the level of non-performing loans (NPLs) in
the banks' portfolios rose to 15.7% in Q3 2011 from 13% at year-
end 2010; Moody's expects that NPLs will continue to rise
throughout 2012, due to the turbulent economic conditions and the
significant loan restructuring in the system, which both pose
risks for the future.

Moody's acknowledges the increasingly constrained economic growth
trajectory in Hungary due to difficult domestic and external
conditions. Last November the rating agency revised down its
growth forecast for 2011 to 1.5% (from 2.7%) and expects a
further decline to 0.5% in 2012. Unemployment is expected to
remain above 10%, and the housing market will remain under
significant pressure.

-- INCREASING PRESSURE ON PROFITABILITY AND CAPITAL

Moody's notes that profitability and capital levels among the
rated banks vary. However, the rating agency expects overall
profitability to remain weak this year and next, with several
banks reporting losses. The continued weak profitability is due
to (i) higher funding costs; (ii) high risk costs; (iii)
shrinking business volumes due to the difficult operating
environment; and (iv) an onerous banking tax. Although the banks'
net interest margins are relatively high when compared with
international peers, these are in most cases not sufficient to
offset these pressures.

Moody's says that the rating actions also consider the
implications of the FX mortgage early repayment scheme on the
banks' financial fundamentals, which vary depending on each
bank's (i) exposure to foreign-currency mortgages; (ii)
profitability levels; and (iii) capital buffers. The rating
agency has built its analysis based on assumptions around early
repayment scenarios of about 20% for the rated banks, considering
that (i) only a small portion of borrowers will have enough cash
savings to repay their mortgages in one lump sum; (ii) banks will
not compete significantly for those borrowers with payment in
arrears; and (iii) remortgaging in the local currency will carry
a significantly higher interest-rate cost.

Moody's notes that both the Hungarian government and the
Hungarian banking association have reached a new agreement on
foreign-currency mortgages. The net implications of this new
arrangement will become more visible in the medium term, but is
likely to entail both positive and negative implications for the
banking system.

Considering Moody's scenario analysis for stress tests, and the
potential implications of the FX mortgage early repayments, the
resulting capital position of the rated banks varies from (i)
more capitalized banks that have absorption capacity to severe
stress scenarios (Tier1 capital ratio after stress ranging from
6% to 7%); to (ii) banks that would see their capital position
compromised under the severe stress scenarios, and would have to
rely on external support to return to the minimum regulatory
Tier1 capital ratio of 4%.

-- RISK OF WEAKENING OF PARENT BANKS' COMMITMMENT TO THEIR
SUBSIDIARIES RISING

Foreign-owned banks -- which represent more than 80% of the total
capital in the system -- face an increasing likelihood that their
foreign parent banks will limit their operations in the country.
This could affect the banks' capital positions, profitability and
suppress lending growth. Deleveraging could be further
exacerbated by the banks' significant reliance on funding from
their parent banks for their foreign-currency loans. Some foreign
parent banks have already started reducing their operations in
Hungary and shortening the maturity of the FX funding provided to
their Hungarian subsidiaries.

Moody's believes that the foreign parents' strategic priorities
and cost-benefit rationales of operating in Hungary are
increasingly affected by the (i) highly stressed operating
environment in Europe; and (ii) the difficult business climate in
Hungary. As such, Moody's has lowered the parental support uplift
by one notch in the deposit ratings for two foreign-owned banks -
K&H Bank and Budapest Bank, but still believes that there is a
moderate probability that support would be forthcoming if
required. For the other two rated foreign-owned banks - Erste
Bank Hungary and MKB Bank -- the rating uplift deriving from
Moody's assumptions of the likelihood of support was already
limited and therefore remained unchanged.

RATING ACTIONS IN DETAIL

-- OTP BANK NYRT

Moody's has confirmed OTP Bank Nyrt's standalone BFSR at D+
(mapping to Ba1 on the long-term scale), its long-term local-
currency deposit rating at Ba1, its long-term foreign-currency
deposit rating at Ba2, its foreign-currency senior debt rating at
Ba1, its foreign-currency subordinated debt rating at Ba2, and
its foreign-currency junior subordinated debt rating at Ba3
(hyb). The outcome reflects the bank's relative resilience in the
face of the euro-area crisis and the benefits of its
international diversification. The outlook on all the ratings is
negative.

Overall, Moody's said that the negative outlook on the ratings
reflects (i) the pressures in the Hungarian operating
environment; (ii) the fact that increased non-performing loans
and provisioning needs exert pressure on the group's
profitability; and (iii) the turbulent market conditions which
make FX funding more difficult and costly.

-- OTP MORTGAGE BANK

Moody's has confirmed OTP Mortgage Bank's standalone BFSR at D+
(mapping to Ba1 on the long-term scale), its long-term local-
currency deposit rating at Ba1 and its long-term foreign-currency
deposit rating at Ba2. The outlook on all the ratings is
negative. The ratings are the same as its parent's ratings, given
that the bank is 100% owned and fully guaranteed by OTP Bank
Nyrt, it is an integral part of OTP franchise, and it operates as
the mortgage division of OTP Bank Nyrt.

Moody's expects that OTP Mortgage Bank's ratings will continue to
follow the movement of its parent's ratings.

-- K&H BANK

Moody's downgraded K&H Bank's standalone BFSR to D- (mapping to
Ba3 on the long-term scale) from D (mapping to Ba2 on the long-
term scale), as well as the local-currency deposit ratings to
Ba2/Not-Prime from Baa3/Prime-3. The long-term foreign-currency
deposit rating was confirmed at Ba2. The outlook on all the
ratings is negative. The rating actions primarily reflect
pressure on the bank's profitability from (i) the FX mortgage
early repayment scheme; (ii) its shrinking business volumes; and
(iii) its continuing increase in non-performing loans, which may
require higher provisioning needs. In addition, Moody's considers
the bank's current capital buffer -- with a Tier1 capital ratio
of 9.9% under IRB foundation at Q3 2011 -- as only adequate in
the currently difficult operating environment. Furthermore, the
rating agency says that the significant exposure of the bank to
Hungarian government securities, especially in the trading book,
makes it more vulnerable in an adverse economic scenario for the
country.

In addition, Moody's considers that there is increased
uncertainty surrounding the likelihood of KBC Bank's support to
K&H. This is partly because KBC Group has to repay, by the end of
2013 (the period agreed upon with the EU Commission in 2009), the
whole amount of the core capital securities subscribed by the
Belgian Federal and Flemish Regional Governments, whilst at the
same time achieving a Basel III pro-forma core Tier1 capital
ratio of 8%. Moody's considers that KBC Bank's historically good
support for K&H may diminish as a result of pressures at group
level. Indeed, the limited availability of resources to channel
into K&H may over time negatively affect the business and the
financial fundamentals of the bank.

-- BUDAPEST BANK

Moody's has confirmed Budapest Bank's BFSR at D- (mapping to Ba3
on the long-term scale), as well as its long-term foreign-
currency deposit rating at Ba2, given that the bank is showing
some resilience to the FX mortgage early repayment scheme. Its
resilience to the scheme is supported by its good financial
fundamentals, especially its earnings and capitalization.

However, Moody's has lowered the bank's local-currency deposit
ratings to Ba1/Not-Prime from Baa3/Prime-3 to reflect its
recalibrated assumptions of probability of support from the
bank's parent, GE Capital, given the difficult operating
environment in Hungary. The outlook on all the ratings is
negative and reflects (i) the weakening asset quality of the
bank, mitigated by the high non-performing loan coverage ratio;
and (ii) the pressures in the Hungarian operating environment.

-- FHB MORTGAGE BANK

Moody's downgraded FHB Mortgage Bank's standalone BFSR to E+
(mapping to B1 on the long-term scale) from D (mapping to Ba2 on
the long-term scale), as well as the local-currency and foreign-
currency deposit ratings to Ba3/Not-Prime from Ba2/Not-Prime. The
outlook on all the ratings is negative. The rating actions
reflect the bank's pressured profitability, which is also being
affected by the FX mortgage early repayment scheme, the
increasing cost of funding, the deterioration in non-performing
loans and the subsequent pressure on increasing provisioning
needs. The capital level is modest when measured against the
difficult operating environment in Hungary, especially given the
bank's focus on the difficult mortgage business and on the
problematic property market. The rating actions also capture the
bank's significant exposure to the wholesale funding market. The
bank is funded mainly through covered bonds, and senior unsecured
bonds. Wholesale funding is currently accessible only in the
local market, due to the turbulent international market
conditions. This, in turn, makes FX funding for the bank more
difficult and costly, and investor demand is limited.

The deposit ratings of the bank incorporate one notch of rating
uplift, deriving from Moody's view of a moderate probability of
systemic support given the nature and the specialized role of
this institution in the Hungarian market, and the historical
evidence of support that the bank received from the Hungarian
government.

-- ERSTE BANK HUNGARY

Moody's downgraded Erste Banks Hungary's standalone BFSR to E+
(mapping to B2 on the long-term scale ) from D- (mapping to Ba3
on the long-term scale), its local-currency deposit ratings to
Ba3/Not-prime from Ba1/Not-Prime, and its foreign-currency
deposit ratings to Ba3/Not-Prime from Ba2/Not-Prime. The outlook
on all the ratings, except the BFSR, is negative. The rating
actions reflect (i) the bank's vulnerability to the potential
losses deriving from the FX mortgage early repayment scheme; (ii)
the impact of the generally weakening economic environment (which
will likely result in large losses in the corporate and
commercial real estate portfolios); and (iii) the increasing
pressure on provisioning needs, reflected in the increasing trend
of non-performing loans. The bank is forecasting a large loss in
2011, which required an immediate, pre-emptive capital injection
of EUR600 million by the parent in November 2011.

The rating actions also consider the bank's potentially weakening
market position in the Hungarian market given the recently
announced strategy by the parent to sharply deleverage its
operations in Hungary.

-- MKB Bank

Moody's confirmed MKB Bank's standalone BFSR at E+ -- but lowered
the mapping to B3 from B1 on the long-term scale -- and
downgraded the deposit and senior debt ratings to B2/Not-Prime
from Ba3/Not-Prime. Moody's has also lowered MKB's foreign-
currency subordinated debt (Lower Tier2) rating to Caa2 from B1,
to reflect the increasing risk of the subordinated debt being
converted into equity as a means of recapitalization. The outlook
on all the ratings is negative.

Moody's says that the downgrades reflect (i) the bank's
vulnerability to the potential losses from the FX mortgage early
repayment scheme; (ii) its rising NPLs and the subsequent
pressure on provisioning needs; (iii) its recurring loss-making
profile, since 2010; (iv) its impaired business model, with high
concentrations to the weak SME and commercial real estate
sectors, and limited retail franchise; and (iv) weak
capitalization.

The bank could breach its minimum regulatory capital adequacy
requirement due to its forecast 2011 losses, including the likely
impact of the FX mortgage early repayments. The parent, BayernLB,
and the local regulator are therefore exploring ways to
strengthen the capital position of the bank.

In addition, given the difficult operating environment and the
ongoing bank's reorganization and business refocusing, MKB is
sharply deleveraging and the parent intends to see if potential
sell opportunities will arise in the future.

Moody's has taken the following rating actions:

OTP Bank Nyrt

- Long-term local-currency deposit rating confirmed at Ba1

- Long-term foreign-currency deposit rating confirmed at Ba2

- Foreign-currency senior unsecured debt rating confirmed at Ba1

- Foreign-currency subordinated debt rating (Lower Tier 2)
   confirmed at Ba2

- Foreign-currency junior subordinated debt rating (Upper Tier
   2) confirmed at Ba3 (hyb)

- BFSR confirmed at D+, and corresponding to a standalone rating
   of Ba1 on the long-term scale

All the above ratings are on negative outlook

OTP Mortgage Bank

- Long-term local-currency deposit rating confirmed at Ba1

- Long-term foreign-currency deposit rating confirmed at Ba2

- BFSR confirmed at D+, and corresponding to a standalone rating
   of Ba1 on the long-term scale

All the above ratings are on negative outlook

K&H Bank

- Long-term foreign-currency deposit rating confirmed at Ba2

- Local-currency deposit ratings downgrade to Ba2/Not-Prime from
   Baa3/Prime-3

- BFSR downgraded to D- (mapping to Ba3 on the long-term scale)
   from D (mapping to Ba2 on the long-term scale)

All the above ratings are on negative outlook

Budapest Bank

- Long-term foreign-currency deposit rating confirmed at Ba2

- Local-currency deposit ratings downgraded to Ba1/Not-Prime
   from Baa3/Prime-3

- BFSR confirmed at D-, and corresponding to a standalone rating
   of Ba3 on the long-term scale

All the above ratings are on negative outlook

FHB Mortgage Bank

- Local-currency deposit ratings downgraded to Ba3/Not-Prime
   from Ba2/Not-Prime

- Foreign-currency deposit ratings downgraded to Ba3/Not-Prime
   from Ba2/Not-Prime

- BFSR downgraded to E+ (mapping to B1 on the long-term scale)
   from D (mapping to Ba2 on the long-term scale)

All the above ratings, except the BFSR, are on negative outlook

Erste Bank Hungary

- Foreign-currency deposit ratings downgraded to Ba3/Not-Prime
   from Ba2/Not-Prime

- Local-currency deposit ratings downgraded to Ba3/Not-Prime
   from Ba1/Not-Prime

- BFSR downgraded to E+ (mapping to B2 on the long-term scale)
   from D- (mapping to Ba3 on the long-term scale)

All the above ratings, except the BFSR, are on negative outlook

MKB Bank

- Local-currency deposit ratings downgraded to B2/Not-Prime from
   Ba3/Not-Prime

- Foreign-currency deposit ratings downgraded to B2/Not-Prime
   from Ba3/Not-Prime

- Foreign-currency senior unsecured debt rating downgraded to B2
   from Ba3

- Foreign-currency subordinated debt rating (Lower Tier 2)
   downgraded to Caa2 from B1

- BFSR confirmed at E+, but the corresponding standalone rating
   was lowered to B3 from B1

All the above ratings are on negative outlook

Principal Methodologies

The methodologies used in rating OTP Mortgage Bank, K&H Bank,
Budapest Bank, FHB Mortgage Bank, and Erste Bank Hungary were
Bank Financial Strength Ratings: Global Methodology published in
February 2007, and Incorporation of Joint-Default Analysis into
Moody's Bank Ratings: A Refined Methodology published in March
2007.

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

Headquartered in Budapest, Hungary, OTP Bank Nyrt reported
consolidated total assets of HUF9,712 billion (EUR36.3 billion)
as of 30 June 2011.

Headquartered in Budapest, Hungary, OTP Mortgage Bank reported
consolidated total assets of HUF1,645 billion (EUR6.15 billion)
as of 30 June 2011.

Headquartered in Budapest, Hungary, K&H Bank reported
consolidated total assets of HUF2,922 billion (EUR10.9 billion)
as of 30 June 2011.

Headquartered in Budapest, Hungary, Budapest Bank reported
consolidated total assets of HUF887 billion (EUR3.31 billion) as
of 30 June 2011.

Headquartered in Budapest, Hungary, FHB Mortgage Bank reported
consolidated total assets of HUF839.8 billion (EUR3.14 billion)
as of 30 June 2011.

Headquartered in Budapest, Hungary, Erste Bank Hungary reported
consolidated total assets of HUF3,300 billion (EUR12.3 billion)
as of 30 June 2011.

Headquartered in Budapest, Hungary, MKB Bank reported
consolidated total assets of HUF 2,818billion (EUR10.61 billion)
as of 30 June 2011.


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


* IRELAND: REI Expects Wave of Business Failures in Retail Sector
-----------------------------------------------------------------
According to The Irish Times' Laura Slattery and Suzanne Lynch,
Retail Excellence Ireland (REI) has warned that Ireland's retail
sector will be hit by a wave of business failures in the new year
as Christmas sales prove insufficiently high to keep struggling
shops open in 2012.

The Irish Times relates that REI chief executive David Fitz-
Simons said on Thursday there would be "a significant number" of
applications for examinerships to the High Court in January.

Mr. FitzSimons, as cited by the Irish Times, said there would be
two groups of retailers applying for examinership: international
chains that decide to cut their losses and exit the Irish market,
using examinership to renegotiate parent company guarantees; and
"the indigenous guys who are over-rented".


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


AEROPORTI DI ROMA: Moody's Downgrades Debt Ratings to 'Ba2'
-----------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Ba1 the debt
ratings of Aeroporti di Roma S.p.A. (ADR) and of ADR's affiliate,
Romulus Finance srl. The ratings remain under review for possible
further downgrade.

Ratings Rationale

The downgrade reflects the increased risk to ADR's financial
profile of continued delays in the finalization of a rate-
charging framework and subsequent increases in aviation charges.
Moody's notes that there has been some progress on this issue
over recent weeks, mainly related to the initiation of
consultations with the Italian Civil Aviation Authority (ENAC) on
planned investments for the 2012-2044 period. However, Moody's
also notes that a final regulatory settlement has not been
achieved and that the process would require several additional
administrative steps, including approval from the relevant
political authorities, which could potentially result in further
delays.

An inability to raise charges has constrained ADR's financial
position such that it cannot undertake the increased capital
expenditure in the Rome airport system to enable it to deal with
further expected traffic growth. The continued delays in a final
settlement being achieved is also challenging ADR's ability to
repay debt, some of which is approaching maturity. ADR's current
credit rating is at a level that allows only maintenance
investments and limits the financial flexibility of the airport,
in particular by requiring it to sweep surplus cash to cash-
collateralize debt obligations and seek debt creditors' consent
to any debt refinancing.

ADR has a bank term loan facility expiring in February 2012, by
which time Moody's expects that the maturity will be fully
amortized, as a result of both cash flow generation and the
implementation of mandatory repayments in March and September
2011. However, ADR has a EUR500 million bond due for repayment in
February 2013. Moody's notes that, if ADR were unable to
consolidate its financial position, it could be difficult for it
to refinance this sizeable bond, particularly in the context of
the current macroeconomic and financial pressures in Italy.

Moody's views ADR's fundamental business and financial profile as
generally one of an investment-grade company, in light of the
quality of its assets and the history of its traffic performance.
However, the current rating reflects the increased risks
pertaining to ADR, given the lack of a satisfactory settlement on
regulatory charges and associated clarity around its refinancing
strategy and options.

The ratings affected by the action are:

Aeroporti di Roma S.p.A.:

Senior secured bank loan facility -- Ba2 from Ba1

Senior secured bank loan facility -- Ba2 from Ba1

Romulus Finance srl:

EUR500 million of 4.94% senior secured bonds due in 2013 -- Ba2
from Ba1

EUR175 million of senior secured floating-rate notes due in 2015
-- Ba2 from Ba1

EUR200 million of senior secured floating-rate notes due in 2015
-- Ba2 from Ba1

GBP215 million of 5.441% senior secured bonds due in 2023 -- Ba2
from Ba1

ADR's Ba2 rating remains under review for possible further
downgrade, reflecting the risks associated with ADR's
approaching debt maturities in the context of the uncertainties
characterizing the definition of a final regulatory settlement.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's would consider a further downgrade of ADR's Ba2 rating if
there were no near term progress in executing a plan for
refinancing the February 2013 bond maturity. In addition,
finalization of a regulatory settlement is critical to enabling
ADR to stabilize its finances over the medium term. Therefore the
review will also focus on the near term progress towards
achieving this goal.

Conversely, positive rating pressure could result from tangible
steps to refinance ADR's February 2013 debt maturity, in
conjunction with the achievement of a satisfactory regulatory
settlement, resulting in greater visibility in terms of ADR's
revenue growth and capital expenditure commitments.

PRINCIPAL METHODOLOGY

The principal methodology used in rating ADR was Operational
Airports Outside of the United States, published May 2008.

Aeroporti di Roma has a concession to operate the Rome airport
system. It had total assets of EUR2.6 billion as at December 31,
2010 and total revenues of EUR598 million for the year ending
December 2010.


BANCA MONTE DEI PASCHI: Reaches Debt Standstill with Lenders
------------------------------------------------------------
Nigel Tutt at Reuters reports that the foundation that owns 49%
of Banca Monte dei Paschi di Siena said on Monday it had reached
two debt standstill agreements with its own lenders as it tries
to keep control of Italy's third largest bank.

The foundation, Reuters says, is expected to sell assets as part
of a debt restructuring deal, with the sale of a stake of 10-15%
in Monte Paschi seen as one possibility.

In addition, Monte Paschi, the world's oldest bank, faces a call
from the European Banking Authority to boost its capital by
EUR3.3 billion (US$4.3 billion), which could put the foundation's
control at risk if it was unable to participate in the
fundraising, Reuters discloses.

In a statement, the foundation said it had concluded positively
talks with a pool of 11 banks for a standstill on their debt
agreements until March 15, 2012, but gave no details on the banks
or amounts involved, Reuter notes.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.


FASTWEB SPA: Swisscom to Face EUR1.3-Billion Impairment Charge
--------------------------------------------------------------
Haig Simonian at The Financial Times reports that Swisscom said
on Wednesday that earnings for this year would be hit by a
EUR1.3 billion impairment charge on Fastweb, its ailing Italian
subsidiary.

The charge, which the Swiss telecommunications group attributed
partly to the eurozone crisis, will lower net profits by CHF1.2
billion this year (US$1.3 billion), the FT says.  In 2010,
Swisscom made CHF1.8 billion after tax, and CHF1.5 billion net in
the first nine months of this year, the FT recounts.

Analysts had long expected a reduction in the goodwill carried
for the Italian internet and telecommunications company, the FT
states.  But Swisscom, which is more than 50% state-owned, had
always defended the valuation, the FT notes.

Swisscom, the FT says, attributed its decision now to "the
difficult economic situation and increasing interest rates" that
had led to "reduced prospects for growth and higher cost of
capital in Italy."

Swisscom bought Fastweb in stages, starting in early 2007, paying
a total of EUR4.6 billion in what it described as a high growth,
high technology business in a big and flourishing market, the FT
discloses.

As reported by the Troubled Company Reporter-Europe on April 13,
2010, Vincent Boland at The Financial Times related that Swisscom
Chief Executive Carsten Schloter said that the Swiss company
expected the total exposure of its Italian subsidiary Fastweb to
a complex fraud and tax evasion investigation in Italy to be no
more than EUR81 million (US$110 million).  In an interview with
the FT, Mr. Schloter said the "real risk" to Swisscom's EUR4
billion investment in Fastweb had been the threat that the
Italian company might have been placed in administration because
of the allegations, which surfaced at the end of February 2010.
Fastweb and Sparkle, the wholesale broadband unit of Telecom
Italia, were accused by prosecutors in Rome of offering services
to offshore companies that were used to launder money and evade
tax, The FT recounted.

Fastweb SpA -- http://company.fastweb.it/-- is an Italy-based
company engaged in the broadband telecommunications industry.
The Company's core activity is focused on the provision of
telecommunication networks and services in the main metropolitan
areas of Italy and in several smaller cities.  Its activates are
divided into four business areas: Consumer, intended to retail
residential and micro business; Small Medium Enterprise (SME) for
small and mid-size companies; Executive, intended to large
companies, the public administration and wholesale activities
designed for other telecommunications operators, and Network and
Systems.  Fastweb SpA provides a range of services, including
telephony, broadband Internet connectivity, advanced video-
communication, virtual private networks, audio and video
streaming, digital and interactive television and
telesurveillance, among others.  In addition, the Company
provides mobile telephony services.  The Company's subsidiaries
include QXN Scpa and e.BisMedia SpA.


SEAT PAGINE: Extends Debt Restructuring Deadline to Jan. 16
--------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the board of
troubled Italian directory company Seat Pagine Gialle SpA said
Friday it extended the deadline on its EUR2.7 billion ($3.5
billion) debt restructuring talks to Jan. 16.

                     About Seat Pagine Gialle

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 Pagine Gialle SpA to 'CC' from
'CCC+'.  S&P said that the outlook is negative.


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


SC CITADELE: Moody's Lowers Long-Term Deposit Rating to 'B2'
------------------------------------------------------------
Moody's Investors Service has downgraded SC Citadele Banka's
long-term deposit rating to B2 from Ba3 and assigned a negative
outlook. The standalone bank financial strength rating was
unchanged at E+ with the outlook revised to negative, although
the long term scale mapping moved to B3 from B1. The Not Prime
short-term rating was unaffected.

Ratings Rationale

The rating action concludes the review for downgrade implemented
on September 20, 2011 following concerns surrounding the
deterioration of asset quality beyond Moody's expectations at the
bank's inception in August 2010 and the low capitalization
levels.

The downgrade reflects the continued deterioration in asset
quality since the bank's inception. Whilst some deterioration was
anticipated by the bank, the end-September 2011 problem loans
(90+ days in arrears, impaired, and restructured loans) of 38% of
gross loans exceeded Moody's expectations (end-December 2010:
29%). Restructured loans continue to constitute around half of
total problem loans, despite a reclassification of problem loans
by the bank which lowered levels, but problem loans other than
restructured also increased over 2011. Provisioning levels have
also declined to a low 25% of problem loans, down from 28% at
end-December 2010. These figures are all on a bank basis rather
than the group basis figures Moody's uses in its BFSR scorecard.

The downgrade also recognizes the low capital levels exhibited by
the bank, with a Tier 1 of 7.4% at end-September 2011 (end-
December 2010: 6.7%) and the potential for further depletion
given the increased problem loan levels and relatively low
provisioning. In addition, the action reflects Moody's
expectations that a further capital injection from the government
is unlikely unless strictly necessary, given the sale process
underway. More positively, the rating agency recognizes the
improvement in capital over 2011 and notes that the current
position still exceeds regulatory minimums. Pre-provision income
during 2011 has been below Moody's expectations, although this is
at least partly attributable to the higher run-off of the CIS
portfolio than originally planned and lower unsecured lending,
and the agency expects it to remain muted in the current economic
conditions.

The bank was established in 2010 following the restructuring of
Parex Banka by the Latvian government. The restructuring resulted
in Parex's performing loan assets, loans in arrears under 60
days, and deposits being transferred to Citadele Banka, with the
remainder of mostly non-performing loans retained in Parex where
they will be run-off. Both Parex and Citadele are currently for
sale with the process expected to be completed in 2012.

The negative outlook reflects Moody's expectations that problem
loans will continue to rise given Latvia's export-oriented
economy and the current economic uncertainty, high structural
unemployment and high indebtedness levels and despite the
considerable improvements the Latvian economy as a whole has made
over the past two years. Rising problem loans combined with the
agency's expectation of continued low profitability would exert
significant pressure on already low capital levels. The negative
outlook also factors in the uncertainty surrounding both the sale
process.

Citadele's B2 long-term rating incorporates a one-notch uplift
from its B3 rating on the long term scale, which maps from its E+
BFSR. This reflects the rating agency's assessment of a high
probability of systemic support, given the state's 75% (minus one
share) ownership of the bank.

Moody's previous rating action on Citadele was implemented on 20
September 2011,when the Ba3 long term deposit rating was placed
on review for downgrade.

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

Other Factors used in this rating are described in Moody's
Approach to Rating Banks and Finance Companies with Limited
Financial History published in August 2009.

Headquartered in Riga, Latvia, Citadele reported total
consolidated assets of around LVL1,386 million (EUR1,951 million)
at end-September 2011.


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


ZALCO: Files for Bankruptcy; Seeks Buyer for Plant
--------------------------------------------------
Silvia Antonioli and Melanie Burton at Reuters report that ZALCO
is looking for a buyer to restart its plant, which was shut on
Friday due to lack of funds after the company filed for
bankruptcy last week.

"The company filed for bankruptcy last Tuesday, and on Friday we
decided to shut down the plant due to lack of funds; we couldn't
pay the energy bills," Ernst Butterman, one of the two official
receivers, told Reuters in a phone interview on Monday.  "We
decided to have a controlled shutdown of the plant while looking
for a buyer."

The receivers are now hoping to find a buyer for the plant,
Reuters notes.

Based in Vlissingen, the Netherlands, ZALCO is a primary
aluminium producer.  The plant employed 500 people.


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


BANCO COMERCIAL: S&P Reviews 'bb-' Stand-Alone Credit Profile
-------------------------------------------------------------
Standard & Poor's Ratings Services reviewed its ratings on six
Portuguese banks by applying its new ratings criteria and updated
group methodology for banks.

"We list the ratings on these banks as a result of applying our
new criteria. We also list our assessments of the stand-alone
credit profiles (SACPs) of four of the six banks (we do not
assign SACPs to the two banks that we consider to be 'core'
subsidiaries). We factor into the ratings on three of the four
banks indicated one or more notches of uplift over their SACPs,
based on the likelihood that they would receive extraordinary
capital support from the state," S&P said.

"Our long-term counterparty credit ratings on four of the six
banks remain on CreditWatch with negative implications, where
they were placed on Dec. 7, 2011, following a similar rating
action on the Republic of Portugal (see 'Ratings On Seven
Portuguese Banks Placed On CreditWatch Negative Following Similar
Action On Sovereign')," S&P said.

"We will publish individual research updates on the banks,
including a list of ratings on affiliated rated entities, as well
as the ratings by debt type--senior, subordinated, junior
subordinated, and preferred stock. The research updates will be
available at www.standardandpoors.com/AI4FI and on RatingsDirect
on the Global Credit Portal. Ratings on specific issues will be
available on RatingsDirect on the Global Credit Portal and
www.standardandpoors.com following release," S&P said.

"We have previously published the results of our review of the
ratings on Banco Santander Totta S.A. (BBB-/Watch Neg/A-3) under
our new criteria on Nov. 29, 2011, followed by its placement on
CreditWatch negative on Dec. 7, 2011. We intend to resolve the
CreditWatch placements within four weeks after the resolution of
the CreditWatch on the Republic of Portugal," S&P said.

Stand-Alone Credit Profiles
Banco Comercial Portugues S.A.               'bb-'
Banco Espirito Santo S.A.                    'bb'
Banco BPI S.A.                               'bb'
Caixa Geral de Depositos S.A.                'bb-'

Ratings List
The ratings listed below are long- and short-term issuer credit
ratings.
                           To               From
Banco Comercial Portugues S.A.
L-T ICR                   BB/Watch Neg     BBB-/Watch Neg
S-T ICR                   B                A-3/Watch Neg


Banco Espirito Santo S.A.
L-T ICR                   BB/Negative      BBB-/WatchNeg
S-T ICR                   B                A-3/Watch Neg

  Banco Espirito Santo de Investimento S.A.
   L-T ICR                 BB/Negative      BBB-/Watch Neg
   S-T ICR                 B                A-3/Watch Neg

Banco BPI S.A.
L-T ICR                   BB+/Watch Neg    BBB-/Watch Neg
S-T ICR                   B                A-3/Watch Neg

  Banco Portugues de Investimento S.A.
   L-T ICR                 BB+/Watch Neg    BBB-/Watch Neg
   S-T ICR                 B                A-3/Watch Neg

Caixa Geral de Depositos S.A.
L-T ICR                   BB+/Watch Neg    BBB-/Watch Neg
S-T ICR                   B                A-3/Watch Neg


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


UC RUSAL: Asks Lenders to Ease Terms on Loans
---------------------------------------------
Emma Rowley at The Telegraph reports that Rusal sounded a warning
on global demand as it asked its lenders to ease the terms of its
loans.

According to the Telegraph, Rusal, headed by Russian billionaire
Oleg Deripaska, said it is in talks with its banks "in light of
possible continuing weakness of global commodity markets" over
the next 12 months.

The announcement comes after Mr. Deripaska warned that the
anticipation of another global downturn had put the aluminium
industry under "significant" pressure, the Telegraph notes.

The company, as cited by the Telegraph, said it has asked its
lenders for a "more flexible" approach to calculating the
covenants on its debt, which stood at US$10.9 billion at the end
of September and was only recently refinanced.  Rusal insisted it
is "well positioned" to meet its obligations and denied reports
it has asked to skip interest payments, the Telegraph relates.

                           About Rusal

Headquartered in Moscow, Russia, United Co. RUSAL --
http://www.rusal.com/-- is among the world's top aluminum
producers, along with Rio Tinto Alcan and Alcoa.  Formed in 2000
from various parts of the old Soviet state apparatus, RUSAL
produces about 4 million tons of aluminum, 11 million tons of
alumina, and 6 million tons of bauxite.  Its aluminum business
include packaging and foil operations in addition to a network of
smelters.  Those Soviet spare parts were significantly augmented
in 2007 when the company merged with fellow Russian aluminum
producer Sual and Glencore's alumina unit.  RUSAL is majority
owned by Board member Oleg Deripaska, who had owned the company
completely prior to the merger.


=============================
S L O V A K   R E P U B L I C
=============================


SLOVGLASS: To File for Bankruptcy; About 390 Jobs At Risk
---------------------------------------------------------
The Slovak Spectator, citing TASR newswire, reports that
Slovglass will dismiss about 390 people as its management asked
the district court in Banska Bystrica to announce the bankruptcy
of the company.

According to the Slovak Spectator, Slovglass' management decided
to file for bankruptcy after it failed to find a strategic
investor for the company.

The chair of the trade unions at Slovglass, Jozef Cincura, said
that the employees received their last payment for October, the
Slovak Spectator notes.  The November pay-off is to be paid from
the reserve fund of the company, the Slovak Spectator says.

Slovglass is a glass-making company based in Poltar in Banska
Bystrica Region.


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


BANCO DE VALENCIA: Moody's Cuts Rating on Two Spanish ABS Deals
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of two
senior tranches in two Spanish asset-backed securities (ABS)
transactions, PYME VALENCIA 1, FTA and PYME VALENCIA 2, FTA,
which are serviced by Banco de Valencia S.A. (Ba2/NP/E+). The
downgrades reflect operational risk concerns. The rating action
concluded the rating reviews of the two transactions.

As part of the review, Moody's also assessed the effect of the
increased commingling risk in these transactions since the
downgrade of Banco de Valencia to Ba2 on October 28, 2011.

Ratings Rationale

The rating action reflects the lack of back-up servicer (BUS)
arrangements in place to support payments on the rated tranches
in the event of servicer disruption.

-- LACK OF BUS ARRANGEMENT

Moody's notes that the transactions are exposed to operational
risk as there is no BUS arrangement in place to deal with a
potential servicer disruption. While PYME VALENCIA 2, FTA
includes a trigger to appoint a BUS upon the loss of the
servicer's Baa3 rating, no BUS has yet been appointed.

However, a mitigant to payment disruption risk is the role of
Europea de Titulizacion, the management company, that will
coordinate the appointment of a replacement servicer if Banco de
Valencia is not able to perform its duties. The management
company also acts as an independent cash manager and will be able
to use available funds, including the reserve fund, to support
timely payments on the notes in case of a temporary servicer
disruption.

In taking the rating action, Moody's has considered (i) the level
of liquidity available in the transactions; and (ii) the role of
the management company acting as (a) independent cash manager;
and (b) BUS facilitator to help support continuity of payments in
case of servicer default.

-- LACK OF LIQUIDITY IN PYME VALENCIA 1, FTA

Moody's downgraded the senior notes of PYME VALENCIA 1, FTA to A2
(sf) because the transaction does not benefit from any liquidity
source. The reserve fund is fully depleted.

-- SUFFICIENT LIQUIDITY AVAILABLE IN PYME VALENCIA 2, FTA

PYME VALENCIA 2, FTA benefits from a large principal cash reserve
of EUR84.4 million and an interest cash reserve of EUR2.7
million, both deposited in Banco Popular Espanol, S.A. (A2/P-1),
representing, respectively, 35.5% and 1.1% of the current pool
balance.

Moody's believes that the current liquidity level in this
transaction is sufficient to support interest payments on the
notes in the event of a disruption in collections. In addition,
the reserve fund currently represents 55.6% of the senior notes
balance, which strongly mitigates a potentially prolonged absence
of securitized loan servicing. Such an extended period without
loan servicing could result in additional losses on the pool. As
a result, Moody's concluded with a maximum achievable rating of
Aa3(sf) for the senior notes of PYME VALENCIA 2, FTA 2.

-- LIMITED IMPACT OF THE INCREASE IN COMMINGLING RISK

In addition, Moody's has concluded that the increased commingling
risk on these two transactions, following the downgrade of Banco
de Valencia, did not affect the ratings of the notes, given the
current credit enhancement levels versus the ratings on the
notes.

-- SWAP COUNTERPARTY REPLACED IN PYME VALENCIA 1, FTA

For PYME VALENCIA 1, FTA , BBVA (Aa3/P-1/B-) replaced Banco de
Valencia as swap counterparty.

There is no swap in place in PYME VALENCIA 2, FTA.

-- POOR PERFORMANCE IN PYME VALENCIA 2, FTA

As part of its review, Moody's reassessed the portfolio quality
of PYME VALENCIA 2, FTA due to poor performance. In contrast,
PYME VALENCIA 1, FTA performance remained in line with
expectations.

As of October 2011, cumulative 90+ day delinquencies for PYME
VALENCIA 2, FTA stood at 13.8% of the original balance compared
with a 15%.8 assumption over the life of the transaction.
Historically, this transaction has under-performed Moody's
Spanish SME delinquency index ("Spanish SME Indices - September
2011"). As of September 2011, 90- to 360-day delinquencies
represented 4.22% of the current pool balance, compared with the
weighted average index of 2.75%.

-- KEY REVISED ASSUMPTIONS IN PYME VALENCIA 2, FTA

Moody's used the "top-down" approach to derive the default-rate
assumption, whereby an average through-the-cycle rating for
Spanish SMEs is determined and the rating is then adjusted on a
loan-by-loan basis by considering various factors, including the
borrower sector, repayment profile and the broader economic
environment. As part of its review, Moody's considered the
exposure of the transaction to the real estate sector (46% of the
current pool as of September 2011 according to Moody's
classification). As a result of the above, Moody's assumed the
default probability of SME debtors to be equivalent to a rating
in the single B-range for debtors operating in the real estate
sector and in the low Ba-range for the non-real-estate debtors.
At the same time, Moody's estimated the remaining weighted
average life of the portfolio to equal 5.2 years. Consequently,
the revised cumulative mean default assumption for this
transaction has increased to 24% of the current portfolio balance
(corresponding to 25% of original portfolio balance).

Given that the pool is less granular (with an effective number of
borrowers of 351), Moody's used a Monte Carlo simulation in
CDOROM to derive the gross default distribution. As a result,
Moody's revised the coefficient of variation of its default
distribution to 42%. Moody's assumptions for the average recovery
rate and constant prepayment rate (CPR) remain unchanged at 45%
and 5%, respectively.

Although the quantitative rating model outcome is still
equivalent to Aaa, the downgrade of the PYME VALENCIA 2, FTA
senior notes reflects the lack of a BUS arrangement. As such,
Moody's downgraded the class A notes to Aa3 (sf) from Aaa (sf).
The model outcome is consistent with current ratings on
subordinated notes.

For PYME VALENCIA 1, FTA, key modelling assumptions,
sensitivities, cash-flow analysis and stress scenarios have not
been updated as the rating action has been primarily driven by
the lack of liquidity and the lack of a BUS arrangement.

Uncertainty mainly stems from the lack of a back-up servicer in
these transactions. Banco de Valencia was intervened by Bank of
Spain as of November 21, 2011. Although this helps mitigate
servicer disruption in the short term, there is high uncertainty
as of the future of the entity. If the rating of Banco de
Valencia is downgraded further while no back-up agreement is in
place, the ratings would be negatively affected.

As noted in Moody's comment 'Rising Severity of Euro Area
Sovereign Crisis Threatens Credit Standing of All EU Sovereigns'
(November 28, 2011), the risk of sovereign defaults or the exit
of countries from the Euro area is rising. As a result, Moody's
could lower the maximum achievable rating for structured finance
transactions in some countries, which could result in rating
downgrades.

The methodologies used in these ratings were "Moody's Approach to
Rating CDOs of SMEs in Europe" published in February 2007, and
"Moody's Approach to Rating Consumer Loan ABS Transactions"
published in July 2011.

During the review of PYME VALENCIA 2, FTA, Moody's used its
excel-based cash flow model, Moody's ABSROM(TM), as part of its
quantitative analysis of the 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.

Issuer: PYME VALENCIA 1, FTA

   -- A2, Downgraded to A2 (sf); previously on Mar 25, 2011 Aa3
      (sf) Placed Under Review for Possible Downgrade

Issuer: PYME VALENCIA 2, FONDO DE TITULIZACION DE ACTIVOS

   -- A, Downgraded to Aa3 (sf); previously on Jun 30, 2011 Aaa
      (sf) Placed Under Review for Possible Downgrade


BANCO DE VALENCIA: Moody's Downgrades Three Spanish RMBS Deals
--------------------------------------------------------------
Moody's Investor Service has reviewed all transactions exposed to
Banco de Valencia and has downgraded the ratings of three senior
tranches in three Spanish residential mortgage-backed securities
(RMBS) transactions. The rating action follows the downgrade of
Banco de Valencia to Ba1 in March 2011 and to Ba2 in October
2011. The rating action concludes the review for downgrade of
these three tranches initiated by Moody's on March 2011.

Ratings Rationale

The rating action reflects: (i) the lack of back-up servicer
(BUS) in the transactions serviced by Banco de Valencia in order
to support payments on the rated tranches in the event of
servicer disruption, (ii) the increased commingling risk in the
structures where Banco de Valencia acts as collections account
bank, and (iii) the failure of Banco de Valencia to find a
replacement swap counterparty in two of the transactions.

--SERVICER DISRUPTION RISK

Banco de Valencia services 6 RMBS transactions rated by Moody's,
5 as sole servicer and one (Bancaja-BVA VPO 1) as part of a
multi-servicer deal, 86% of the pool currently administered by
former Bancaja (now Bankia Baa2/P-2 on Review for Possible
Downgrade) and 14% by Banco de Valencia. In none of these
transaction there is a back-up servicer in place.

Moody's has concluded that for the 5 RMBS transactions solely
serviced by Banco de Valencia, the maximum achievable rating is
A1(sf). Moody's has not taken action on Valencia Hipotecario 4
and 5 in which senior tranche ratings are rated A3(sf) and A2(sf)
respectively. No action was taken on the multi-servicer deal
Bancaja-BVA VPO 1 either given limited exposure to Banco de
Valencia and available liquidity.

The downgrade takes into account the current level of liquidity
in the transactions. An additional mitigant to payment disruption
risk is the role of Europea de Titulizacion, the management
company, that will coordinate the appointment of a replacement
servicer if Banco de Valencia is not able to perform its duties.
The management company also acts as an independent cash manager
and will be able to use available funds, including the reserve
fund, to support timely payments on the notes in case of a
temporary servicer disruption.

Uncertainty mainly stems from the lack of a back-up servicer in
these transactions. Banco de Valencia was intervened by Bank of
Spain as of November 21, 2011. Although this helps mitigate
servicer disruption in the short term, there is high uncertainty
as of the future of the entity. If the rating of Banco de
Valencia is downgraded further while no back-up agreement is in
place, the ratings would be negatively affected.

--COMMINGLING RISK

Collections are transferred daily from Banco de Valencia to the
treasury account held by a P-1 entity in all the deals. Moody's
has assessed commingling risk in the transactions and concluded
that the increased commingling risk following the downgrade of
Banco de Valencia did not affect the ratings of the notes. This
is due to the current available credit enhancement in the case of
Valencia Hipotecario 1, 2, 3 and 4. In the case of Valencia
Hipotecario 5 and Bancaja-BVA VPO 1 there are dedicated
commingling reserves in place.

Uncertainty mainly stems from the exposure to Banco de Valencia
as the collection account bank. If the rating of Banco de
Valencia is downgraded further, in absence of other mitigants to
commingling risk, the ratings of the transactions concerned would
be negatively affected

--SWAP COUNTERPARTY EXPOSURE

Moody's has assessed swap counterparty risk for two transactions
for which Banco de Valencia continues to act as swap counterparty
(Valencia Hipotecario 1 and 2). According to the transaction
documents Banco de Valencia should have been replaced as basis
swap counterparty or its obligations guaranteed by an eligible
party at loss of its A3/P-2 ratings. Collateral is being weekly
posted to the fund but no replacement has taken place. This
exposure was not the driver of the rating action given the
limited credit support provided by the swap (basis swap) and the
level of credit enhancement present in the structure.

Uncertainty mainly stems from the exposure to Banco de Valencia
as swap provider. If the rating of Banco de Valencia is
downgraded further, in absence of a replacement to take over the
role of swap provider, the ratings in the five transactions would
be negatively affected.

As noted in Moody's comment 'Rising Severity of Euro Area
Sovereign Crisis Threatens Credit Standing of All EU Sovereigns'
(28 November 2011), the risk of sovereign defaults or the exit of
countries from the Euro area is rising. As a result, Moody's
could lower the maximum achievable rating for structured finance
transactions in some countries, which could result in rating
downgrades.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS in Europe, Middle East, and Africa,"
published in October 2009.

Other Factors used in this rating are described in "Global
Structured Finance Operational Risk Guidelines: Moody's Approach
to Analyzing Performance Disruption Risk" published in June 2011.

In rating these transactions, Moody's used ABSROM to model 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 lognormal 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 note holders. Therefore, the
expected loss 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.

Issuer: Valencia Hipotecario 1, FTA

   -- EUR140.13M A Notes, Downgraded to A1 (sf); previously on
      March 25, 2011 Aaa (sf) Placed Under Review for Possible
      Downgrade

Issuer: Valencia Hipotecario 2, FTH

   -- EUR415M A Notes, Downgraded to A1 (sf); previously on March
      25, 2011 Aa1 (sf) Placed Under Review for Possible
      Downgrade

Issuer: Valencia Hipotecario 3, FTA

   -- EUR503.38M A2 Notes, Downgraded to A1 (sf); previously on
      March 25, 2011 Aa1 (sf) Placed Under Review for Possible
      Downgrade


PROMOTORA DE INFORMACIONES: Has Refinancing Deal with Banks
-----------------------------------------------------------
Emma Ross-Thomas at Bloomberg News reports that Promotora de
Informaciones SA said it has reached a refinancing agreement with
"almost all" its creditor banks and expects to complete the
accord by the end of the year.

According to Bloomberg, Prisa said in a regulatory filing that
the company has asked its lenders to extend the maturity date of
its syndicated loan to Dec. 30 from Dec. 19, while the terms of
the agreement are set out.

As reported by the Troubled Company Reporter-Europe on Sept. 29,
2011, The Financial Times related that Prisa could be forced into
selling prized assets to trim its EUR3.5 billion (US$4.8 billion)
net debt pile as the company's founding Polanco family battles to
retain control of the world's largest Spanish-language media
group by revenues.  The company was locked in its second
renegotiation with its lenders in less than a year after a
restructuring earlier this year and sales of part of its stakes
in domestic broadcaster Digital Plus and educational publisher
Santillana, the FT disclosed.

On April 27, 2010, the Troubled Company Reporter-Europe, citing
Dow Jones Newswires, reported on April 27, 2010, that Prisa had
agreed with its creditor banks to refinance its debt and extend
its nearly EUR2 billion bridge loan until May 2013.  Prisa, in a
filing with the Spanish market regulator, said the refinancing
and a series of asset sales would allow the company to reduce its
debt burden, Dow Jones said.  Prisa's debt reached nearly EUR5
billion, compared to its current market capitalization of EUR769
million, according to Dow Jones.

Promotora de Informaciones S.A. -- http://www.prisa.com/-- is a
Spain-based holding company, engaged in various media activities.
The Company has six business areas: publishing, education and
training (Grupo Santillana publishes textbooks and books of
general interest); press (El Pais Internacional is engaged in the
distribution of news material and services to other newspapers
and publications worldwide); radio (Union Radio is a group
broadcasting worldwide); audiovisual (PRISA offers services and
products, including Pay TV, thorough the satellite platform
DIGITAL+, and free-to-view through the channel Cuatro); online
(Prisacom is committed to the development of multimedia content
with broadcasting for Internet-based TV) as well as commercial &
marketing (Sogecable Media SA manages all the advertising on the
Company and its group's media).  The Company is present in 22
countries, such as Portugal, Brazil or the United States.


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


PRIVATBANK COMM'L: Moody's Changes Outlook on 'B3' Rating to Neg.
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook to negative
from stable on the B3 long-term foreign currency deposit ratings
of thirteen Ukrainian banks. The outlook on three Ukrainian
banks' outstanding foreign currency debt ratings of B1 has also
been changed to negative from stable. These rating actions have
been prompted by the recent change in outlook on Ukraine's
sovereign ceilings to negative from stable. These ceilings act as
a constraint for the foreign currency deposit and debt ratings
assigned to banks. The long-term foreign currency and debt and
deposit ratings of other rated Ukrainian banks, whose ratings
were not constrained by the country ceilings, were not affected
by this rating action.

Ratings Rationale

Moody's rating actions were triggered by the change of outlook to
negative from stable on (i) Ukraine's foreign currency bank
deposit ceiling of B3 and (ii) Ukraine's foreign currency bond
ceiling of B1:

Specifically, the outlook on B3 foreign currency deposit ratings
of the following banks was changed to negative from stable:

OTP Bank Ukraine

Privatbank Commercial Bank

Ukreximbank

UkrSibbank

Raiffeisen Bank Aval

Subsidiary Bank Sberbank of Russia

First Ukrainian International Bank

Forum Bank

Pivdennyi Bank

Savings Bank of Ukraine

Credit Dnepr Bank

Prominvestbank

Ukrinbank

The outlook on the foreign currency debt ratings of B1 of the
following banks was changed to negative from stable:

Privatbank Commercial Bank

Ukreximbank

UkrSibbank

PRINCIPAL METHODOLOGIES

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


* CITY OF KYIV: Moody's Changes Outlook on 'B2' Issuer Ratings
----------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlooks on the B2 foreign and local-currency issuer ratings of
the Ukrainian cities of Kyiv and Kharkiv.

Ratings Rationale

The outlook changes are in response to Moody's decision on
December 15, 2011 to change the outlook on the Ukrainian
government's B2 foreign and local-currency bond ratings to
negative from stable. Please see Moody's press release "Moody's
changes outlook on Ukraine's B2 government ratings to negative
from stable" for further information.

The outlook change reflects the Ukrainian economy's limited
recovery in 2011 and its likely deterioration going forward due
to adverse global economic conditions. Taking into account Kyiv's
and Kharkiv's already weak operating balances and overall rigid
budget structures, any material economic slowdown may lead to
growing fiscal imbalances. The low shock-absorption capacity of
the Ukrainian municipalities coupled with the weakness of the
national banking system poses (re)financing risks in the short-
to-medium term.

Moody's notes that Kyiv's credit profile also reflects foreign-
currency risks unique to the city's debt, as around 64% of the
city's direct debt is in Eurobonds. Given the external liquidity
risks at the national level, Kyiv's refinancing risks will become
an increasingly important factor for the city's creditworthiness
over the next 12-18 months. At the same time, Kyiv's position as
the Ukrainian capital and the national economic hub -- as well as
its more flexible expenditure composition -- remain mitigating
factors for the aforementioned risks.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Stabilization in the rating outlooks of both cities would follow
a similar outlook change in the sovereign rating. In contrast,
downward pressure could develop on municipal ratings following a
downgrade of the sovereign rating and/or material weakening in
Kyiv's and Kharkiv's fiscal performances as well as significant
growth in their borrowing requirements.

The methodologies used in this rating were Regional and Local
Governments Outside the US published inMay 2008, and The
Application of Joint-Default Analysis to Regional and Local
Governments published in December 2008.


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


ENVELOPE PRINTING: Set For Liquidation; Owes More Than GBP1.2-Mil
-----------------------------------------------------------------
Melanie Defries at PrintWeek reports that Envelope Printing
Company (EPC) is set for liquidation, with debts estimated to
exceed GBP1.2 million.

Portland Business & Financial Solutions was appointed
administrator for the company on September 22.

According to the report, the administrator said it expects to
move the company into liquidation "when we judge the timing to be
appropriate", at which point it said it would initiate an
investigation into the "transfer of the company's plant and
machinery in January 2011".

The administrator added that these assets had been sold but "the
company still had the use of the items" while all staff were
"transferred out of the company and their cost became part of the
intercompany balance," PrintWeek relates.

A spokesperson for Portland Business and Financial Solutions told
PrintWeek that EPC's plant and machinery had been sold to another
company owned by the Commercial Envelope Group and that it would
investigate whether its assets were sold at market value.  Action
could be taken against the company if the assets were sold at a
rate significantly less than their true value, the spokesman, as
cited by PrintWeek, added.

PrintWeek discloses that EPC was acquired last December by the
Commercial Envelope Group, a company founded by Crossways
Envelopes MNF director John Sherwen.  CEG restructured the group
in an attempt to maximise efficiency, by closing an EPC plant at
Erith and moving the company to its Dartford premises and by
making some redundancies, the report notes.

According to PrintWeek, the administrator listed a number of
problems which led to its collapse: these included production
inefficiencies, undercapitalisation and a lower level of sales
and margins than expected based on the previous year's figures.
According to its reports, following the acquisition EPC
implemented a new accounting system, which revealed that the
company was making significant losses.

EPC's accounts reveal it made a loss of almost GBP800,000 for the
period 1 January to 22 September, PrintWeek disclsoes. Its
turnover for the same period was GBP1.048m with costs of sales at
GBP1.532 million.

The business finally went into administration when investor
International Assets & Resources, which financed the EPC
acquisition, became concerned about the long-term viability of
the business and called in its loan, giving directors no option
but to cease trading, according to PrintWeek.

Envelope Printing Company is a Kent-based overprinting
specialist.


HMV GROUP: Considers Selling HMV Live Unit to Cut Debt
------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that struggling U.K.
entertainment retailer HMV Group PLC Chief Executive Simon Fox
said that it is considering selling its only profitable business,
HMV Live, to reduce its debt level and bolster its finances.

United Kingdom-based HMV Group plc is engaged in retailing of
pre-recorded music, video, electronic games and related
entertainment products under the HMV and Fopp brands, and the
retailing of books principally under the Waterstone's brand.  The
Company operates in four segments: HMV UK & Ireland, HMV
International, HMV Live, and Waterstone's.  HMV International
consists of HMV Canada, HMV Hong Kong and HMV Singapore.
Waterstone's is a bookseller, which operates through 314 stores
and a transactional Web site for the sale of both physical and e-
books for download.  The Company has operations in seven
countries, with principal markets being the United Kingdom and
Canada.  Its retail businesses operate through 417 stores in the
United Kingdom, Canada, Hong Kong and Singapore.  On Jan. 29,
2010, the Company completed the acquisition of MAMA Group Plc.
Its subsidiaries include HMV Canada Inc, HMV Guernsey Limited,
HMV Hong Kong Limited, and HMV (IP) Limited.


THOMAS COOK: Unveils Turnaround Plan; Posts GBP398-Million Loss
---------------------------------------------------------------
Roger Blitz and Mark Wembridge at The Financial Times report that
Thomas Cook laid out its turnaround strategy on Dec. 14, but
admitted there was no certainty that the rescue plan for its
struggling UK business would succeed.

The scale of the task ahead was laid bare in its preliminary
results which showed a pre-tax loss GBP398 million for the year
to September, after last year's GBP42 million profit, the FT
relates.

According to the FT, Sam Weihagen, interim chief executive, said
the mainstream UK business "didn't make any money."

Publishing its long-awaited review of UK operations, Thomas Cook,
as cited by the FT, said it would shut 200 lossmaking shops,
including 75 that it planned to close following its merger with
the Co-op's UK high street travel business, and said at least 660
jobs will go.

The turnaround plan, which will cost GBP60 million, will take
three years to complete, after which Thomas Cook said it expected
profitability to improve by GBP110 million, the FT discloses.

Thomas Cook has also embarked on a group-wide strategic review
and is trying to reach a GBP200 million disposals target for non-
core assets, the FT notes.

Net debt rose from GBP804 million in 2010 to GBP890 million at
the year end and revenues were up from GBP8.9 billion to GBP9.8
billion, according to the FT.

As reported by the Troubled Company Reporter-Europe on Nov. 29,
2011, BBC News related that Thomas Cook reached agreement with
its bankers to provide it with new access to funding.  Shares in
the company fell 75% on Nov. 22 after it said it was in talks
about increasing borrowings, BBC recounted.  Its bankers,
including Barclays, HSBC, RBS and UniCredit, agreed to provide a
new GBP200 million facility until April 30, 2013, BBC disclosed.
At the end of September the firm's net debt was just under GBP900
million, BBC said.  The new loan will take the figure to over
GBP1 billion, BBC stated.  The company stressed that it is not
currently in breach of the terms of any of its loans, and said it
wanted the new loans to "improve its resilience if trading
conditions remain difficult," according to BBC.

Thomas Cook Group plc is a United Kingdom-based company.  The
Company, together with its subsidiaries, is engaged in the
provision of leisure travel services.  Its main brands include
Airtours, Aspro, Club 18-30, Cresta, Manos, Neilson, Sunset,
Sunworld Holidays, Swiss Travel Service, Thomas Cook, Thomas Cook
Style Collection, Thomas Cook Signature and Thomas Cook Tours.
It has six geographic operating divisions: United Kingdom,
Central Europe, West and East Europe, Northern Europe, North
America and Airlines Germany.


YELL GROUP: Reaches Compromise Agreement with Lenders on Debt
-------------------------------------------------------------
Salamander Davoudi and Mark Wembridge at The Financial Times
report that Yell Group has reached a compromise agreement with
lenders over the terms of its GBP2.6 billion net debt, giving the
group more headroom within its banking covenants and buying it
more time to implement a turnaround strategy.

According to the FT, the company said it had agreed a deal with
"an overwhelming majority of lenders" to ease its banking
covenants, which are based on the ratio of net debt to earnings
before interest, tax, depreciation and amortization.

The agreement followed several weeks of negotiations where two
sets of lenders clashed over the restructuring, the FT notes.

Central to the dispute had been a disagreement between bank
lenders and institutional investors that made up some of its 300
creditors over plans to cut a GBP173 million (US$272 million)
undrawn credit facility to GBP30 million, the FT discloses.

The company is to pay about GBP17 million in fees to the banks in
return for the extra headroom on its loan covenants, the FT
states.

                        About Yell Group

Headquartered in Reading, England, Yell Group plc --
http://www.yellgroup.com/-- is an international directories
business operating in the classified advertising market through
printed, online, and phone media in the U.K. and the US.  Yell
also owns 100% of TPI (renamed "Yell Publicidad"), the largest
publisher of yellow and white pages in Spain, with operations in
certain countries in Latin America.  Yell's revenue for the
twelve months ended March 31, 2008, was GBP2,219 million and its
Adjusted EBITDA was GBP738.9 million.

                         *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 6,
2011, Standard & Poor's Ratings Services affirmed its long-term
corporate credit rating on U.K.-based classified directories
publisher Yell Group PLC at 'CC'.  S&P said the outlook remains
negative.


                            *********

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 * * *