TCREUR_Public/120201.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, February 1, 2012, Vol. 13, No. 23

                            Headlines



A Z E R B A I J A N

STATE OIL: Moody's Assigns '(P)Ba1' Rating to Debut Eurobond


F R A N C E

EUROPCAR GROUPE: Moody's Cuts Corporate Family Rating to 'B3'
NOVATRANS: SNCF Plans Recapitalization or Sale for Novatrans


G E R M A N Y

CONTINENTAL AG: Moody's Issues Summary Credit Opinion on Firm
SCHAEFFLER AG: Moody's Assigns 'B2' Corporate Family Rating
SCHAEFFLER AG: S&P Assigns 'B' LongTerm Corporate Credit Rating
SCHLECKER: Schlecker Family Unable to Inject Fresh Funds


G R E E C E

* GREECE: Bondholders May Face More than 70% Loss Under Debt Deal


H U N G A R Y

MALEV ZRT: Financing Untenable; Government Unlikely to Help


I R E L A N D

DEKANIA EUROPE I: Fitch Affirms 'CCCsf' Rating on Class D Notes
QUINN INSURANCE: High Court Cuts Administration Fee Bill by 20%


K A Z A K H S T A N

KAZPOST JSC: Moody's Withdraws 'Ba2' Corporate Family Rating
NURBANK JSC: S&P Lowers Subordinated Debt Rating to 'CCC'


L A T V I A

LATVIJAS KRAJBANKA: Administrator Seeks Bankruptcy
SIA PALINK: Owner Files Complaint Over Latvia Insolvency Ruling


N E T H E R L A N D S

HIGHLANDER EURO II: S&P Raises Rating on Class E Notes to 'CCC+'
MONASTERY 2006-I: S&P Lowers Rating on Class D Notes to 'CCC'
WOOD STREET I: S&P Raises Rating on Class E Notes to 'B+'


R U S S I A

CREDIT BANK OF MOSCOW: S&P Assigns B+ Counterparty Credit Ratings
SPANAIR SA: Files for Bankruptcy Protection in Barcelona


S W E D E N

FERROMET: Creditors Approve Debt Repayment Plan
SAAB AUTOMOBILE: Up to Five Parties Express Interest in Takeover


T U R K E Y

HSBC AS: Moody's Affirms 'D+' Standalone BFSR; Outlook Negative


U N I T E D   K I N G D O M

GENESIS ADORATION: To be Put Into Voluntary Liquidation
NAC EUROLOAN: S&P Raises Ratings on Two Note Classes From 'BB+'


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A Z E R B A I J A N
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STATE OIL: Moody's Assigns '(P)Ba1' Rating to Debut Eurobond
------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Ba1
rating to the upcoming debut Eurobond to be issued by State Oil
Company of the Azerbaijan Republic (SOCAR). The outlook is
stable.

Moody's expects that the Eurobond issuance will total up to
US$500 million. The proceeds of the notes will constitute general
unsecured and unsubordinated obligations of SOCAR. These will
rank senior to all present and future subordinated obligations of
the company and equal in right of payment to all its present and
future unsecured and unsubordinated obligations. Moody's
anticipates that the maturity of the notes will not exceed five
to seven years. Moreover, the rating agency expects that SOCAR
will use the proceeds of the notes to partially fund its upstream
and downstream activities, including financing of capital
expenditure.

Upon a conclusive review of the transaction and associated
documentation, Moody's will endeavor to assign a definitive
rating to the notes issuance. A definitive rating may differ from
a provisional rating.

Ratings Rationale

The assignment of a (P)Ba1 rating to SOCAR's upcoming debut
Eurobond issuance is aligned with its Ba1 corporate family rating
(CFR) and probability of default rating (PDR). The rating
reflects the company's position as a government-related issuer
(GRI). As such, its ratings incorporate significant uplift for
high implied state support from its Baseline Credit Assessment
(BCA) of 13 (which corresponds to a Ba3 rating). Moody's factors
into SOCAR's ratings high government support and very high
dependence assumptions.

SOCAR's BCA of 13 reflects the medium scale of the company's
reserves and production base, and its solid financial metrics. It
also reflects the fact that SOCAR is a fully integrated oil and
gas company that enjoys either a share in, or a full control
over, the country's oil and gas pipelines for the domestic and
export markets. At the same time, Moody's rating of SOCAR is
constrained by a very high concentration of upstream assets,
which are heavily depleted. Moreover, SOCAR's high susceptibility
to government interference may present an additional challenge
for its credit quality.

Moody's does not expect the new bond issuance to have a material
negative impact on SOCAR's leverage profile and debt coverage
ratios. On a pro-forma basis and assuming the company's base-case
oil price scenario of US$80/barrel of oil (bbl) Brent, Moody's
anticipates that SOCAR's debt/EBITDA ratio will remain below 2.0x
following the bond issuance. The rating agency also expects that
(i) at the end of 2012, SOCAR's debt/EBITDA ratio will return to
1.5x or below; and (ii) the company will remain within the
financial thresholds set by Moody's for the rating, i.e.,
debt/total book capitalization of below 30% and retained cash
flow (RCF)/net adjusted debt of above 20%.

Principal Methodologies

The principal methodology used in rating SOCAR was the Global
Integrated Oil & Gas Industry Methodology published in November
2009. Other methodologies used include the Government-Related
Issuers methodology published in July 2010.

The State Oil Company of the Azerbaijan Republic is the national
energy company of Azerbaijan, 100% owned by the government of
Azerbaijan. SOCAR is a vertically integrated oil and gas
producer, including upstream, midstream and downstream
operations. SOCAR is the backbone of Azerbaijan's national
economy. It has a monopoly position in the supply of oil and gas
products to the domestic market and is an official representative
of the State in all oil and gas projects in the territory of
Azerbaijan. In the last twelve months ended June 30, 2011, SOCAR
generated around US$7.8 billion of revenues, US$2.9 billion of
EBITDA and US$1.5 billion of net income.


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F R A N C E
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EUROPCAR GROUPE: Moody's Cuts Corporate Family Rating to 'B3'
-------------------------------------------------------------
Moody's Investors Service has lowered to B3 from B2 the corporate
family rating (CFR) of Europcar Groupe S.A.  Concurrently,
Moody's has downgraded EC Finance Plc's Senior Secured Notes to
B3, and Europcar Groupe S.A's Senior Subordinated Secured
Floating Rate Notes ("FRNs") to Caa1 and Senior Subordinated
Unsecured Notes to Caa2. The outlook on all these ratings is
stable.

Ratings Rationale

"The downgrade of Europcar's CFR to B3 reflects Moody's
developing concerns over the group's liquidity profile in light
of the significant refinancing requirements over the next 18
months, combined with expectations of continued high leverage in
the context of a challenging economic environment", says
Sebastien Cieniewski, lead analyst for Europcar.

Europcar's refinancing needs over the coming quarters include the
GBP545 million UK Fleet Financing Facility maturing in December
2012, the EUR350 million Senior Revolving Facility ("RCF")
maturing in May 2013, and the EUR425 million FRNs due in May
2013.

In Moody's view, the refinancing of the FRNs issued by the
holding company Europcar Groupe S.A., will be particularly
challenging if market conditions do not improve. Moody's
considers the FRNs to be junior in the capital structure with a
significant amount of debt ranking ahead including: (i) the UK
and other fleet financing facilities, of which EUR500 million was
drawn at the end of September 2011 and, (ii) the EUR350 million
Revolving Credit Facility due 2013. Additionally, part of the
fleet operated in France, Germany, Italy and Spain is financed
through a dedicated asset based financing structure, made of (i)
the securitized EUR1,300 million Senior Asset Revolving Credit
Facility due in 2014, of which EUR792 million was drawn at the
end of September 2011, and (ii) the EUR350 million senior secured
notes at the level of EC Finance Plc. This dedicated structure is
mainly secured by the financed fleet and the related receivables.
Europcar's adjusted debt to EBITDA stood at 4.9x as of FY2010
with no expectations for improvement in FY2011.

In the first nine months of FY2011, Europcar generated stable
unaudited revenues of EUR1,526 million when compared to the same
period last year. Despite a worsening economic environment,
operating performance also remained relatively stable. The
decrease in rental day volume by 0.8% in the first nine months of
FY2011 was offset by an increase in the average revenue per day
by 0.9% as reported by the company. At the same time Moody's
notes that fleet holding costs have increased by 2.2% while the
utilization rate improved at around 75% versus the prior year
(74%).

The stable outlook assumes that the UK Fleet Financing Facility
will be successfully refinanced.

Negative pressure could develop if the company fails to announce
in the near-term measures to refinance its 2013 debt maturities;
or if operating performance deteriorates with adjusted leverage
trending towards 5.5x; or EBIT/Interest coverage is below 1.0x on
a sustained basis.

Positive pressure could arise if the refinancing needs are met
successfully; or if shareholders show significant support.
Moody's would also expect EBIT/Interest coverage to exceed 1.0x
and adjusted leverage sustained comfortably below 5.0x with a
solid liquidity profile.

The principal methodology used in rating Europcar was the Global
Equipment and Automobile Rental Industry Methodology published in
December 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Headquartered in Paris, France, Europcar is a leading European
provider of short- to medium-term rentals of passenger vehicles
and light trucks to corporate, leisure and replacement clients.
Europcar is owned by Eurazeo, one of the largest European
investment companies.


NOVATRANS: SNCF Plans Recapitalization or Sale for Novatrans
------------------------------------------------------------
Stuart Todd at ifw-net.com reports that SNCF, also known as
National Corporation of French Railways, is planning to either
sell or recapitalise its heavy-loss-making road-rail freight
transport subsidiary, Novatrans.

Novatrans, which employs 260 staff, is reported to have been in
the red to the tune of EUR22 million last year, following a
EUR35 million loss in 2010, ifw-net.com discloses.

Failing these options, liquidation could be on the cards, the
report notes.

ifw-net.com discloses that SNCF acquired Norbert Dentressangle's
15.1% stake in Novatrans in June 2009, bringing it a majority
shareholding in the company.

Novatrans was then on the brink of bankruptcy and had just
announced 100 job cuts, the report recalls.  The French state
rail operator has sunk EUR60 million into Novatrans since it took
control, but over two-and-a-half years on, its financial position
is as precarious as ever, ifw-net.com states.

Addressing France's combined transport association, the GNTC,
last October, SNCF Geodis CEO Pierre Blayau accepted that the
group had "perhaps made mistakes" with Novatrans, reports ifw-
net.com.

According to the report, the recapitalisation option would
consist of injecting EUR50 million of fresh capital by the end of
the year, accompanied by a severe restructuring plan.

This would almost certainly involve axing routes, most of which
are losing money, and closing some of its 13 freight terminals,
the report notes.

However, ifw-net.com notes, the plan could fall foul of the EC's
competition regulations as it would risk laying open SNCF to a
charge of providing state aid to the operator in disguise, in the
same way it did with SeaFrance.

ifw-net.com says SNCF Geodis's financial director, Olivier Storch
confirmed that in April, the two options of sale or
recapitalisation would be assessed.

If neither is considered viable, steps would be taken to
liquidate Novatrans, with is staff offered jobs elsewhere in the
SNCF group, adds ifw-net.com.


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G E R M A N Y
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CONTINENTAL AG: Moody's Issues Summary Credit Opinion on Firm
-------------------------------------------------------------
This release represents Moody's Investors Service's summary
credit opinion on Continental AG and includes certain regulatory
disclosures regarding its ratings. This release does not
constitute any change in Moody's ratings or rating rationale for
Continental AG.

Moody's current ratings on Continental AG and its affiliates are:

  Long Term Corporate Family Ratings (domestic currency) ratings
  of Ba3

  Probability of Default rating of Ba3

Conti-Gummi Finance BV

  BACKED Senior Secured (domestic currency) ratings of Ba3; LGD4
  - 51

Ratings Rationale

On April 5, 2011, Moody's Investors Service has upgraded
Continental AG's corporate family rating (CFR) to Ba3 and
instrument ratings to Ba3 with an LGD 4, 51%. The outlook on the
ratings is stable.

The rating action reflects both a stronger than expected recovery
in Conti's operating performance for the fiscal year 2010 as well
as a significant improvement of Conti's liquidity profile
following the successful refinancing of its credit lines leading
to a well balanced maturity profile of its overall debt
outstanding.

Despite the solid recovery in Conti's operating performance,
Moody's considers the CFR burdened by the uncertainty associated
with the possible form and pace of a potential combination of
Continental AG and its major shareholder Schaeffler, which
reportedly has a high debt level following its investment in
Conti. At this time Moody's sees the risk to noteholders
mitigated primarily by financial covenants in the bond and loan
documentation that restrict Conti's ability to (i) dispose of the
rubber group, or (ii) merge with entities of the Schaeffler
group, unless certain interest coverage and leverage tests are
met with regard to metrics pro-forma for the respective
transactions. On a standalone basis Conti's credit profile would
be in the mid- to high "Ba-category".

In addition, the recent announcement of a successful refinancing
of Schaeffler's debt structure, including the reduction of its
stakeholding in Conti from 75% (directly and indirectly via 2
banks) to 60% might lengthen the timeframe for a combination with
Conti. Schaeffler's strong improvement in operating performance
reported for FY2010 and the expectation that this development
would be sustained going forward should also lead to an
improvement of Schaeffler's credit profile over time.
Nevertheless, Moody's would expect to re-assess the position of
all lenders if and when major corporate transactions are agreed
upon.

The stable outlook incorporates the expectation that (i) Conti
will continue to generate positive free cash flows in the coming
years which would be applied to debt reduction and (ii) the
operating performance and cash flow generation will sustainably
improve further mainly driven by a material turnaround in the
powertrain division. Overall this should lead to further
improvements to the leverage ratio.

Conti's ratings could be upgraded over the next 12-18 months
should (i) Conti be able to further reduce its leverage,
exemplified by Debt/EBITDA as adjusted by Moody's to around 2.5x
in 2011 with visibility of a further reduction towards 2.0x in
2012; (ii) Free cash flow generation of EUR500 million as defined
by Moody's materialize in 2011; (iii) interest coverage improve
to above 3.0x as well as (iv) RCF/Net Debt to remain above 25% in
2011. Absent any re-leverage resulting from a merger with
Schaeffler these metrics could result in a further rating
upgrade.

A downgrade of Conti's ratings could be envisaged should
operating performance and leverage deteriorate materially below
2010 levels exemplified by (i) Debt/EBITDA as adjusted by Moody's
approaching 4.0x; (ii) a free cash flow generation below EUR200
million; (iii) a decline in the reported adjusted EBIT margin
below 7% as well as in case of any re-leverage resulting from a
combination with Schaeffler.

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


SCHAEFFLER AG: Moody's Assigns 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating and a B2 probability of default rating to Schaeffler AG.
At the same time, Moody's Investors Service has assigned a
provisional (P)B1 rating to Schaeffler's Syndicated Senior term
loan facility C2 and a provisional (P)B1 rating to Schaeffler's
planned bond issue. The outlook on the ratings is stable.

Assignments:

   Issuer: Schaeffler AG

   -- Probability of Default Rating, Assigned B2

   -- Corporate Family Rating, Assigned B2

   -- Senior Secured Bank Credit Facility, Assigned (P)B1 (LGD3,
      35%)

   Issuer: Schaeffler Finance B.V.

   -- Senior Secured Regular Bond/Debenture, Assigned (P)B1
      (LGD3, 35%)

Ratings Rationale

The B2 corporate family rating is supported by Schaeffler's solid
business profile evidenced by (i) leading market positions in the
bearings and automotive component and systems market with number
one to three positions across the wide ranging product portfolio
in a relatively consolidated industry; (ii) its leading
mechanical engineering technology platform supporting a
competitive cost structure and the development of innovative
products; (iii) a well diversified customer base, especially in
the industrial division but also to the extent possible in the
consolidated automotive industry and a sizable aftermarket
business accounting for around 25% of revenues in 2010.

The rating also benefits from (iv) Schaeffler's proven business
model with a good track record of operating performance and
margin levels well above the automotive supplier industry
average; (v) an experienced management team as well as (vi) a
good innovative power evidenced by a high number of patents,
founded on a notable amount of R&D expenses of above 5% of
revenues per year.

The rating is constrained by (i) the combined high indebtedness
and leverage of the operating level ("Schaeffler Group" or
"Schaeffler AG") and the holding level, the latter of which also
includes the junior debt incurred by parent companies of
Schaeffler AG; (ii) the organizational and legal complexity and
evolving structure of Schaeffler in its current state as well as
(iii) Moody's expectation that debt levels will not be materially
reduced over the short to medium term as (iv) free cash flow
generation as adjusted by Moody's is anticipated to remain
negative for 2011 and 2012 mainly driven by high interest
expense, again increasing capital expenditure and dividend
payments to the holding level -- and despite very strong
operating performance.

In Moody's view, the existence of cross acceleration language in
the junior credit facility does not completely ring-fence
Schaeffler AG and its subsidiaries from the holding level,
although Moody's understands the priority of claim ranking of
Schaeffler's senior debt facility. This interrelationship also
includes the commercial requirement of Schaeffler AG to upstream
a limited amount of interest payable to the holding level as well
as future dividends for operating costs and certain tax payments
related to the corporate organization of Schaeffler Group.
Therefore, Moody's assessment and financial metrics are based on
consolidated figures of INA Holding Schaeffler GmbH & Co. KG,
which represents the ultimate parent for all group companies
either on the operating or the holding level. When calculating
EBIT and EBITDA metrics Moody's also takes into account the
reported at equity income from Schaeffler's total share in
Continental (approx. 49.9%) and, for these purposes, also shares
held by two independent banks (approx. 10.2%).

Although a large portion of the debt service at the holding level
is non cash, the total annual interest burden is a key
constraining factor to Schaeffler's free cash flow generation
capacity in addition to the need to invest in new capacities for
future growth. Moreover, Moody's notes that without material debt
repayment current debt at the holding level will increase over
time due to the accumulating interest portion of the junior loan
and the zero coupon bond.

Moody's understands that the senior term loan and multicurrency
revolving credit facilities agreement ("New Senior Facilities
Agreement") for the aggregate amount of EUR8.0 billion has been
signed between Schaeffler AG and 8 international banks to
refinance its existing senior facilities comprising EUR6.95
billion senior term loans and EUR792.5 million multicurrency
revolving credit facilities. The New Senior Facilities Agreement
is guaranteed by Schaeffler AG and certain operating subsidiaries
of Schaeffler AG and comprises of the following credit
facilities: A 1-year EUR2.0 billion term loan facility ("Facility
A") which can be extended by the borrower for another 6 months.
Moody's understands that proceeds from the planned senior secured
bond issue will be used to repay part or all of that facility or
reduce the amount to be drawn under Facility A. Facility B
consists of a EUR3.0 billion term loan facility with a tenor of 3
years, whereas the EUR2.0 billion Facility C (of which EUR1.0
billion C1 and EUR1.0 billion C2) carries a five year maturity
and the EUR1.0 billion multicurrency revolving credit facility
("Revolving Facility") matures after three years with an up to
two-years extension option subject to the approval by lenders
representing at least 60% of all commitments under the Revolving
Facilities.

The New Senior Facilities Agreement provides for certain
financial covenants on leverage, interest coverage and cash flow
coverage as well as restrictions on Capital expenditures and
dividend payments that according to Moody's understanding
currently provide sufficient headroom.

Debt outstanding under the New Senior Facilities Agreement is
secured by pledges over Continental shares held by Schaeffler AG,
material group companies, cash pool accounts and receivables on a
pari passu basis with other debt used to refinance the new senior
facilities, including the planned senior secured bonds. The (P)B1
rating for the proposed bonds is at the same level as the bank
debt, as these bonds will accordingly rank pari passu with the
debt under the new senior facilities.

The stable outlook incorporates Moody's expectation that
Schaeffler will (i) be able to slightly exceed the 2010 operating
performance in 2011 and demonstrates further improvements
thereafter; (ii) be able to limit its cash burn in 2011 to less
than EUR350 million, to below EUR100 million in 2012 and start to
generate positive free cash flows thereafter and (iii) apply
these to debt reduction.

The ratings could be upgraded over the next 12-18 months should
Schaeffler be able to (i) further reduce its absolute debt levels
by applying free cash flows to debt reduction that would also
contribute to (ii) a sustainable reduction of its high leverage
(Debt/EBITDA) anticipated to be around 5.0x in FY 2011 and in a
more challenging environment next year to no more than 4.5x.
These performance achievements should go along with unchanged or
improved market positions and technological leadership positions.

The ratings could come under pressure in case of (i) a
significant weakening in Schaeffler's operating performance and
cash flow generation evidenced by EBIT margins below 10% and free
cash flow generation to stay negative beyond 2012; (ii) inability
to sustain its anticipated leverage of around 5.0x over the
coming years as well as (iii) weakening of its liquidity profile
including the possible failure to perform within the currently
comfortable headroom under its financial covenants.

Moody's considers Schaeffler Group's short term liquidity over
the next 12 months to be good. Based on Moody's calculation the
company has access to cash sources of more than EUR2.2 billion
comprising a cash balance of around EUR500 million (thereof a
minor portion of restricted cash), expected FFO, and two
revolving credit facilities of more than EUR1.0 billion currently
mostly undrawn. Cash uses consisting of working capital
requirements, capex, working cash for day to day needs as well as
cash needs upstreamed to the holding level for payment of taxes,
interest payment and operating/advisory costs should be fully
covered by the sources mentioned above. Given the expected
limited free cash flow generation in the next couple of years,
the ability to refinance existing debt when it comes due will be
a key challenge for Schaeffler Group.

Structural Considerations

When assessing the structure of Schaeffler's liabilities Moody's
includes the junior debt located at the level of Schaeffler
Verwaltungs GmbH and Schaeffler Holding GmbH & Co. KG. This debt
is secured by pledges over Continental shares held by Schaeffler
Verwaltungs GmbH and by the two independent banks as well as
shares in Schaeffler AG. This assessment is consistent with
Moody's approach when assessing the corporate family rating of
Schaeffler AG given the absence of a complete ring-fencing
between Schaeffler AG and its subsidiaries from the holding
level.

Moody's views the junior debt as legally and structurally
subordinated to the senior debt at Schaeffler AG level as well as
to trade claims, pension obligations and lease rejection claims
at operating entities. Based on Moody's recovery analysis the
debt outstanding under the New Senior Facilities Agreement and
the planned senior secured notes to be issued by Schaeffler
Finance B.V. and guaranteed on a senior basis by Schaeffler AG
and certain subsidiaries of Schaeffler AG are rated one notch
above the corporate family rating as a result of a recovery rate
calculated at 65%, higher than the group average assumed to be
50% in Moody's LGD model. Consequently, the Senior term loan
facility C2 will be assigned a (P)B1 rating with a LGD3 at 35%
and the envisaged bonds will be assigned a P(B1) rating with a
LGD3 at 35%.

The principal methodology used in rating Schaeffler was Moody's
Global Auto Supplier Industry Methodology, published in January
2009. Other methodologies used include Loss Given Speculate-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.

Headquartered in Herzogenaurach, Germany, Schaeffler is a leading
manufacturer of rolling bearings and linear products worldwide as
well as a renowned supplier to the automotive industry. The
company develops and manufactures precision products for
everything that moves -- in machines, equipment and vehicles as
well as in aviation and aerospace applications. The group
operates under three main brands -- INA, FAG and LuK. In FY2010,
Schaeffler generated revenues of approx. EUR9.5 billion.


SCHAEFFLER AG: S&P Assigns 'B' LongTerm Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Germany-based automotive component and
systems and industrial bearings manufacturer Schaeffler AG. The
outlook is positive.

"At the same time, we assigned our 'B' issue rating to the
proposed senior secured notes of up to EUR2 billion, to be issued
by 100%-owned, special-purpose vehicle Schaeffler Finance B.V.,
and the EUR1 billion term loan facility C2, to be borrowed by
Schaeffler. We assigned a '3' recovery rating to these debt
instruments, indicating our expectation of meaningful (50%-70%)
recovery in the event of a payment default," S&P said.

"The rating on Schaeffler is primarily constrained by our
assessment of the company's 'highly leveraged' financial risk
profile, owing to a high debt burden following the acquisition in
2008 of Germany-based automotive supplier Continental AG
(B+/Positive/B). We estimate that Schaeffler's Standard & Poor's-
adjusted debt (including junior debt incurred at the holding
company level) reached EUR13 billion at year-end 2011, and that
funds from operations (FFO) to debt remained less than 10%,
despite a strong operating performance. Schaeffler is currently
refinancing its EUR7.7 billion bank loan. However, the rating on
Schaeffler is constrained by the one-year maturity of the new
EUR2 billion tranche A senior bank debt facility, although
Schaeffler has a six-month extension option for up to EUR1
billion. Schaeffler's plan is to refinance tranche A in the bond
market, but we see execution risk associated with this process,
since Schaeffler has no track record of issuing on the bond
market," S&P said.

"We anticipate a 300 basis-point erosion in the company's
adjusted EBITDA margin in 2012 compared with 2011. Nevertheless,
we anticipate that it will remain in the high teens, in line with
historical levels. We anticipate that EBITDA cash conversion will
remain low because FFO will likely be hampered by large cash
interest payments, and free operating cash flow (FOCF) generation
will likely be hampered by continuously large capital
expenditures. As a result, and combined with our forecast erosion
in adjusted EBITDA, we anticipate a slight deterioration in
Schaeffler's credit metrics in 2012, with adjusted debt to EBITDA
of more than 6x and adjusted FFO to debt of about 8%," S&P said.

"In our view, Schaeffler could improve its financial risk profile
by mid-2012 if it continues to address its refinancing issues
proactively in the coming quarters. Despite a challenging
macroeconomic outlook, we think that Schaeffler's operating
performance will remain strong, including an adjusted EBITDA
margin of close to 20% and slightly positive FOCF generation,"
S&P said.

"A prerequisite for an upgrade would be for Schaeffler to
successfully address the refinancing of its senior debt with a
bond issuance. Any upgrade would also require continuously strong
operating performance over the coming quarters, including an
adjusted EBITDA margin of close to 20% and slightly positive
FOCF, despite large capex. We consider an adjusted debt-to-EBITDA
ratio of about 6x and an adjusted FFO-to-debt ratio of 10% as
commensurate with a 'B+' rating. The maintenance of the rating at
the current 'B' level depends on the company sustaining
"adequate" liquidity under our criteria," S&P said.

"We could revise the outlook to stable should Schaeffler not meet
all of the requirements listed above for an upgrade in the coming
quarters," S&P said.


SCHLECKER: Schlecker Family Unable to Inject Fresh Funds
--------------------------------------------------------
Jens Hack and Olaf Brenner at Reuters report that the Schleckers,
once one of Germany's wealthiest families, said on Monday they
have lost their multi-billion-euro fortune, leaving them unable
to pump fresh funds into the insolvent Schlecker drugstore chain.

Schlecker, which competes with privately held chains Rossmann and
dm, filed for insolvency last week, putting about 30,000 jobs at
risk, as struggling European businesses find it increasingly hard
to secure funds against a gloomy economic backdrop, Reuters
discloses.

"There are no significant funds there anymore that could have
helped the company," Reuters quotes Meike Schlecker, daughter of
company founder Anton Schlecker, as saying.

Speaking to reporters at the company's first press conference
since 1990, Ms. Schlecker said the family had already pumped
hundreds of millions of euros into the business and Anton
Schlecker was forced to file for personal insolvency, Reuters
notes.

Nonetheless, she said a sale of Schlecker's main business was out
of the question and instead, she and her brother Lars Schlecker
hope to bring Germany's biggest drugstore chain back out of
insolvency and continue running it as a family business,
according to Reuters.

Court-appointed insolvency administrator Arndt Geiwitz said he
was open to a "family solution" and was negotiating with
creditors and suppliers to keep operations going at Schlecker,
Reuters relates.

This may be also a way to continue an already implemented
restructuring plan, Reuters states.

The company will need a sum of euros in the hundreds of millions
to restructure, Mr. Geiwitz, as cited by Reuters, said, adding
there are investors who have already expressed an interest.

Schlecker has posted losses for several years and last year
announced plans to shut 700-1,000 stores to shrink its way to
profitability, Reuters says.  Now, it has just over 6,000 outlets
left, Reuters notes.

According to Reuters, finance chief Sami Sagur said Schlecker
could sell some of its foreign businesses, which are not part of
the insolvency filing, to help pay creditors.

                            Deliveries

In a separate report, Reuters relates that Unilever said it will
resume deliveries to Schlecker today, putting Dove soaps and
Rexona deodorants back on the shelves more than a week after
Germany's biggest drugstore chain filed for insolvency.

Unilever, as cited by Reuters, said on Monday it was normal for
suppliers to halt deliveries for a short time after an insolvency
filing, adding that "turning its back on Schlecker as an
important distribution channel was never up for discussion."

A number of suppliers temporarily halted deliveries to Schlecker,
including P&G, the maker of Pampers diapers and Gillette razors,
which has now also resumed shipments to the chain's stores,
Reuters notes.

Other big suppliers to Schlecker are Beiersdorf, the German maker
of Nivea skin cream, and Henkel, whose brands include Persil in
Germany, Schwarzkopf hair products and Pritt stick glue, Reuters
discloses.

Schlecker is Germany's biggest drugstore chain.  It has 11,000
employees in Germany.


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


* GREECE: Bondholders May Face More than 70% Loss Under Debt Deal
-----------------------------------------------------------------
Gabriele Steinhauser and Elena Becatoros at The Associated Press
report that investors participating in a deal to slash Greece's
massive debt would face an overall loss on their bond holdings of
more than 70%.

According to AP, European leaders at a summit in Brussels said a
final debt deal could be signed off in the coming days, together
with a second multibillion-euro bailout package designed to save
the country from a potentially disastrous bankruptcy.

Athens and representatives of investors holding Greek government
bonds over the weekend came close to a final agreement designed
to bring Greece's debt down to a more manageable level, AP
relates.  Without a restructuring, those debts would swell to
around double the country's economic output by the end of the
year, the AP notes.

If the agreement works as planned, it will help Greece remain
solvent and help Europe avoid a blow to its already weakened
financial system, even though banks and other bond investors will
have to accept big losses, AP says.

The person involved in the talks said Monday that the more-than
70% loss was the result of cutting the bonds' face value in half,
reducing the average interest rate to between 3.5% and 4% and
pushing repayment of the bonds 30 years into the future, AP
relates.  A second person briefed on the talks confirmed that the
loss on the so-called net present value of the bonds would be
around 70%, the report notes.

The deal, which would reduce the country's debt by about EUR100
billion (US$131.1 billion) and save it billions of euros in
interest payments, needs to be completed quickly, the AP states.
Greece, the AP says, runs the risk of a disorderly default on
March 20, when it faces a EUR14.5 billion bond repayment it
cannot afford without additional help.

Many investors -- banks, insurance companies and hedge funds --
who hold Greek bonds also hold debt from other countries that use
the euro, which could lose value if there is a fully fledged
Greek default, AP cites.


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


MALEV ZRT: Financing Untenable; Government Unlikely to Help
-----------------------------------------------------------
Andras Gergely at Bloomberg News reports that Malev Zrt.,
Hungary's state-owned airline, said financing for the carrier is
untenable and that the government may not be able to help because
of European Union competition rules.

"Despite the continually improving commercial results, the
financing of activities had become unviable and was unresolved
from the end of January," Bloomberg quotes Chief Executive
Officer Lorant Limburger as saying in a statement on the
carrier's Web site.  Board Chairman Janos Berenyi asked
Malev's management to present a "liquidity plan for the immediate
future" by the end of the week, Bloomberg relates.

A European Union ruling on Jan. 9 ordered Malev to repay
"unlawful aid" the government gave the carrier from 2007 to 2010,
Bloomberg discloses.  The airline said on Monday that gives
Hungary "extremely limited" options for helping Malev, the report
notes.

A buyer is being sought for Malev after the state took a 95%
stake to replace Russian bank Vnesheconombank as controlling
shareholder when a previous privatization failed, Bloomberg
notes.  Hungary is in "advanced" talks with potential European
investors after China's Hainan Airlines quit talks, the
government said Dec. 5, before the EU ruling, the report relays.

Malev, as cited by Bloomberg, said that ILFC Holdings Inc., an
aircraft leasing company based in Los Angeles, has agreed to keep
providing the planes used by the carrier.

As reported by the Troubled Company Reporter-Europe on Jan. 31,
2012, Bloomberg News, citing the Official Gazette, related that
the Hungarian government gave Malev, the country's unprofitable
state-owned airline, the special status of a "strategically
extraordinarily important company."  The granting of the status
shields the company from bankruptcy proceedings that may be
initiated by creditors against the indebted airline, Bloomberg
noted.

Malev Zrt. is the flag carrier and principal airline of Hungary.


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


DEKANIA EUROPE I: Fitch Affirms 'CCCsf' Rating on Class D Notes
---------------------------------------------------------------
Fitch Ratings has affirmed these ratings on 23 classes of notes
from three European collateralized debt obligations (CDOs) and
revised the Rating Outlooks to Stable:

Dekania Europe CDO I p.l.c. (Dekania Europe I)

  -- EUR116,145,762 class A1 notes at 'AAsf', Outlook to Stable
     from Negative;
  -- EUR 11,500,000 class A2 notes at 'Asf', Outlook to Stable
     from Negative;
  -- EUR 13,000,000 class A3 notes at 'Asf', Outlook to Stable
     from Negative;
  -- EUR 35,000,000 class B1 notes at 'BBsf', Outlook to Stable
     from Negative;
  -- EUR 15,000,000 class B2 notes at 'BBsf', Outlook to Stable
     from Negative;
  -- EUR 29,500,000 class C notes at 'B-sf', Outlook to Stable
     from Negative;
  -- EUR15,461,821 class D notes at 'CCCsf'.

Dekania Europe CDO II p.l.c. (Dekania Europe II)

  -- EUR152,362,006 class A1 notes at 'Asf'; Outlook to Stable
     from Negative;
  -- EUR25,000,000 class A2-A notes at 'BBBsf'; Outlook to Stable
     from Negative;
  -- EUR5,000,000 class A2-B notes at 'BBBsf'; Outlook to Stable
     from Negative;
  -- EUR26,385,042 class B notes at 'Bsf'; Outlook to Stable from
     Negative;
  -- EUR28,687,680 class C notes at 'CCCsf';
  -- EUR13,364,387 class D1 notes at 'CCsf';
  -- EUR2,284,236 class D2 notes at 'CCsf';
  -- EUR13,604,060 class E notes at 'Csf'.

Dekania Europe CDO III p.l.c. (Dekania Europe III)

  -- EUR154,681,458 class A1 notes at 'BBsf', Outlook Negative;
  -- EUR16,000,000 class A-2A notes at 'Bsf', Outlook Negative;
  -- EUR12,000,000 class A-2B notes at 'Bsf', Outlook Negative;
  -- EUR24,816,727 class B notes at 'CCCsf';
  -- EUR19,461,408 class C notes at 'CCsf';
  -- EUR12,993,739 class D notes at 'Csf';
  -- EUR8,700,647 class E notes at 'Csf';
  -- EUR4,233,638 class F notes at 'Csf.

The affirmations are based on the performance of the transactions
being within Fitch's expectations. Since the last review in
January 2011, the Dekania Europe I and Dekania Europe II
portfolio quality has been relatively stable and the senior notes
have delevered, resulting in increased credit enhancement levels
for the notes.  The Dekania Europe I portfolio consists of 94.6%
European insurance companies, 5.4% banks and 10.6% perpetual
securities, while the Dekania Europe II portfolio consists of
68.5%, 23.5% and 20%.  The average credit quality of Dekania
Europe I and II has remained at 'BB/BB-' for this year and last
year's review.  The revision of the Outlook on the notes to
Stable reflects Fitch's view that there is adequate cushion
between current credit enhancement levels and projected loss
levels corresponding to their ratings.

The affirmation of the Dekania Europe III notes is the result of
the deleveraging of the capital structure, which has offset some
negative portfolio migration.  The notes are expected to perform
in line with their current rating levels.  One additional obligor
representing EUR12 million (4.1%) has defaulted, bringing the
total portfolio defaults to EUR51 million (17.6%).  Close to 47%
of the Dekania Europe III's portfolio consists of bank and
finance companies which contributed to the decline in the average
credit quality to 'B/B-' from 'B+/B' at last review.  Fitch has
maintained the Negative Outlook on the class A-1 and A-2A and A-
2B (together, class A-2) notes in Dekania Europe III, to reflect
the limited ability of the notes to absorb additional defaults,
as well as Fitch's overall negative outlook for the European
banking sector.

In evaluating the notes, Fitch focused on the analytical
framework described in the reports 'Global Surveillance Criteria
for Trust Preferred CDOs' and 'Global Rating Criteria for
Corporate CDOs', using the Portfolio Credit Model (PCM) for
projecting future default levels for the underlying portfolio.
In this review, Fitch also conducted cash flow modeling analysis
for the notes to measure the breakeven levels generated by
Fitch's cash flow model under the various default timing and
interest rate stress scenarios, as described in the report
'Global Criteria for Cash Flow Analysis in CDOs'. Fitch notes
that the effective maturity has a material impact on the expected
default rates.  As in prior year, the agency discussed the
possibility of calls with the collateral manger and Fitch's
European Financial Institutions and Insurance groups and
considered several scenarios in its analysis. Fitch will continue
to monitor future amortization in the transaction and may revise
its assumptions in the future.

Dekania Europe transactions are backed primarily by subordinate
and hybrid instruments. Dekania Europe I and II are managed by
Dekania Capital Management, LLC, while Dekania Europe III is
managed by is managed by EuroDekania Management Limited.  Both
are affiliates of Cohen Brothers LLC.


QUINN INSURANCE: High Court Cuts Administration Fee Bill by 20%
---------------------------------------------------------------
Mary Carolan at The Irish Times reports that the president of the
High Court has cut by 20% a fee bill of EUR2.75 million sought by
the joint administrators of Quinn Insurance relating to the costs
of administration of the company.

Michael McAteer and Paul McCann of accountancy firm Grant
Thornton were appointed joint administrators by the Financial
Regulator in April 2010, the Irish Times recounts.  They sought
court approval for payment of about EUR2.75 million, plus
expenses, for costs incurred in the administration of the company
between August 1 and November 30 last year, the Irish Times
notes.

The fees sought by the administrators themselves for their own
work were on the basis of EUR475 an hour, the Irish Times says.

The merchant banking firm was hired in June 2010 by the joint
administrators to help sell QIL, sold last year to the Liberty
Mutual-Anglo Irish Bank joint venture, the Irish Times discloses.

In his ruling, Mr. Justice Nicholas Kearns, as cited by the Irish
Times, said he was imposing the 20% reduction for reasons
including the fact the "difficult and completely unprecedented"
situation that existed at QIL when the joint administrators were
appointed no longer prevailed.  He noted that the fees charged by
the administrators for the August to November 2011 period were
based on rates previously approved by the High Court, according
to the Irish Times.

A lot of the work of the administrators had now become routine
and the sale of the company to the joint venture had
significantly reduced the burden on the administrators, the Irish
Times states.

He also found there was repetition in relation to some of the
work carried out by the administrators and Macquarie, the Irish
Times says.

The Irish Times relates that Mr. Justice Kearns said he was
taking into account other factors, including the sharp downturn
in Ireland's economic situation since the joint administrator's
appointment and the fact that, in cases before the Commercial
Court, other judges had cut administrative fees sought by
professionals.

                      About Quinn Insurance

Quinn Insurance is owned by Sean Quinn, who was once Ireland's
richest man, and his family.  The company has more than 20% of
the motor and health insurance market in Ireland.  Employing
almost 2,800 people in Britain and Ireland, it was founded in
1996 and entered the UK market in 2004.

As reported by the Troubled Company Reporter-Europe, The Irish
Times said the Financial Regulator put Quinn Insurance into
administration in March 2010 after his office discovered
guarantees had been provided by the insurer's subsidiaries as far
back as 2005 on Quinn Group debts of more than EUR1.2 billion.
The regulator said the guarantees reduced the amount the firm had
in reserve to protect policyholders against possible claims,
putting 1.3 million customers at risk, according to the Irish
Times.


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


KAZPOST JSC: Moody's Withdraws 'Ba2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn all the ratings of
Kazpost JSC.  The ratings withdrawn are the company's Ba2
corporate family rating (CFR), Ba2 probability of default rating
(PDR), and A3.kz national scale rating (NSR), all with a stable
outlook.

Moody's has withdrawn the rating for its own business reasons.

This action does not reflect a change in the company's
creditworthiness.

Kazpost JSC is the Kazakh national postal operator active in
traditional postal services. It also participates in a wide range
of financial and other services, including pension and salaries
payments and express deliveries, logistics and transportation
services.

Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated
by a ".nn" country modifier signifying the relevant country, as
in ".kz" for Kazakhstan. For further information on Moody's
approach to national scale ratings, please refer to Moody's
Rating Implementation Guidance published in March 2011 entitled
"Mapping Moody's National Scale Ratings to Global Scale Ratings".


NURBANK JSC: S&P Lowers Subordinated Debt Rating to 'CCC'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Kazakhstan-based JSC Nurbank to
'B-' from 'B' and the Kazakhstan national scale rating to 'kzBB-'
from 'kzBB+'. "We also affirmed our 'C' short-term counterparty
credit rating on the bank. We are removing the ratings from
CreditWatch, where they were placed with negative implications on
Dec. 12, 2011. The outlook is stable. At the same time, we
lowered the ratings on Nurbank's dated subordinated debt issues
to 'CCC' from 'CCC+' and to 'kzCCC+' from 'kzB'," S&P said.

"The downgrade reflects our assessment of the bank's 'moderate'
business position, 'adequate' capital and earnings, 'weak' risk
position, 'average' funding, and 'adequate' liquidity, as our
criteria define these terms. The stand-alone credit profile
(SACP) is 'b-'," S&P said.

"Our assessment of Nurbank's business position as "moderate"
reflects its small and declining market share and high exposure
to the domestic real estate and construction sectors. With a
market share of about 2% based on assets, Nurbank is the No. 13
bank in Kazakhstan as of Dec. 1, 2011," S&P said.

"We view Nurbank's capital and earnings as 'adequate,' based on
weakening of our projected risk-adjusted capital (RAC) ratio
before adjustments to about 8.3%-8.8% over the next 12-18
months," S&P said.

"Our assessment of Nurbank's risk position as 'weak' reflects our
view of the bank's historically relaxed underwriting standards,
significant loss experience, and high concentration of lending in
real estate and construction sectors, despite 52% coverage of
total loans by loan-loss reserves and capital as of Dec. 1, 2011.
Nurbank's asset quality materially deteriorated in 2011:
Nonperforming loans (NPLs; more than 90 days overdue) increased
to 28.5% of total loans on Dec. 1, 2011, from 9.0% at year-end
2010. About two-thirds of total loans had been restructured as of
Dec. 1, 2011. Nurbank has a very high share of loans in a grace
period. We expect an increase in NPLs over the coming quarters as
the grace periods for many of the bank's loans end. We anticipate
that Nurbank will need to create significant additional loan-loss
reserves in 2012. Nurbank's share of lending to the weak
construction, real estate, property development, hotel, and
restaurant sectors is almost twice the system average, at 39% of
total lending as of Dec. 1, 2011," S&P said.

"Nurbank's funding is 'average' and its liquidity is 'adequate,'
in our view," S&P said.

"The stable outlook reflects our view that Nurbank will maintain
its current capitalization and liquidity over the next 12 months,
despite our expectation of asset quality deterioration," S&P
said.

"We would lower the ratings if the bank's liquidity weakened
substantially or if our projected RAC ratio before adjustments
declined to less than 5%, owing to significant additional
provisions not supported by capital injections," S&P said.

"We could raise the ratings if Nurbank demonstrated a sustainable
and material improvement in asset quality and substantially
decreased its share of lending to construction and real estate
sectors and its share of loans in grace periods," S&P said.


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


LATVIJAS KRAJBANKA: Administrator Seeks Bankruptcy
--------------------------------------------------
Aaron Eglitis at Bloomberg News, citing Riga-based newswire Leta,
reports that KPMG Baltics, the administrator for Latvijas
Krajbanka AS, called for the bankruptcy of the lender after
rejecting proposals to reopen it.

According to Bloomberg, Leta reported that the administrator had
evaluated and rejected four proposals that would have revived the
lender, which was suspended in November over missing money.

                   Otkritie Capital's Interest

In a separate report, Bloomberg News' Mr. Eglitis, citing TV3,
relates that Otkritie Capital, the brokerage partly owned by
Russia's VTB Group, is interested in acquiring Latvijas Krajbanka
AS.

According to Bloomberg, the TV3 news program Neka Personiga
reported that under one of the plans to reopen the lender,
Otkritie would invest LVL38 million (US$71.6 million) and lend
another LVL120 million in liquidity support.  The news program
reported that under the pla, the state would not be able to
reclaim about LVL350 million, which had been used to pay
depositors, for 10 years or partly write off part of the figure,
Bloomberg notes.

Headquartered in Riga, Latvia, AS Latvijas Krajbanka provides
commercial banking services to businesses and private individuals
in Latvia and the markets of the Commonwealth of Independent
States.  As of Dec. 31, 2009, AS Latvijas Krajbanka had 115
customer service centers and 190 automated teller machines.  AS
Latvijas Krajbanka is a subsidiary of AS banka Snoras.


SIA PALINK: Owner Files Complaint Over Latvia Insolvency Ruling
---------------------------------------------------------------
The Baltic Times reports that REWE Group, a majority shareholder
in the Lithuanian parent company of Palink, the operator of the
Iki and Cento chain stores, has filed an official complaint to
the European Commission over Latvia's Insolvency Law and the
insolvency proceedings launched against Palink by the Riga
Kurzeme District Court.

According to Baltic Times, LETA reported that Palink
representative Velga Ozola said REWE Group claims in the
complaint that an infringement procedure be started against
Latvia.

"If the law, which violates European regulations, is not revised,
and if the unlawful situation is not revoked, the Court of
Justice of the European Union will order heavy financial
sanctions," warned Ms. Ozola.

The Baltic Times relates that REWE Group believes that the
Insolvency Law of Latvia is not in line with the European Union's
regulations and the EU Charter of Fundamental Rights. Because of
the faulty law, a financially sound company may see its
properties auctioned in the coming days or weeks, REWE Group
notes in the petition, reports Baltic Times.

"The possible auction of Palinkassets threatens not only the
company's investments of 123 million euros in Latvia, but also
more than 1,200 jobs. A major drop in turnover at Iki and Cento
stores can be observed already now," Ms. Ozola, as cited by
Baltic Times, said.

The company is determined to use all legal opportunities, and
even turn to the EU Court of Justice, the report adds.

Baltic Times notes that Palink was ruled insolvent by the Riga
Kurzeme District Court on Jan. 5.  But on Jan. 13, Prosecutor
General Arvids Kalnins handed in an official protest to the
Supreme Court Senate's Civil Cases Department over the court's
ruling on Palink insolvency.

The insolvency case against Palink was opened following a
petition filed by private individual Sergejs Guscins, who claimed
that Palinkhad not paid for work done by the construction company
Landekss, according to Baltic Times.

Based in Latvia, SIA Palink operates Cento and IKI supermarket
chains.  Its largest owner is the pan-European retailer alliance
Coopernic.


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


HIGHLANDER EURO II: S&P Raises Rating on Class E Notes to 'CCC+'
----------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
Highlander Euro CDO II B.V.'s (primary issuer) outstanding
EUR605.5 million notes and Highlander Euro CDO II (Cayman) Ltd.'s
(secondary issuer) outstanding EUR30 million, excluding
combination notes (collectively, Highlander Euro CDO II).
"Specifically, we raised our ratings on five tranches and
affirmed our ratings on two tranches," S&P said.

"The rating actions follow our credit and cash flow analysis of
the transaction using data from the latest available trustee
report, dated Dec. 12, 2011," S&P said.

"Highlander Euro CDO II is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The transaction closed in
December 2006 and is managed by Highland Capital Management
Europe, Ltd.," S&P said

"The trustee report shows that all classes of notes are currently
passing the overcollateralization tests and that the reported
weighted-average spread earned on the collateral pool has
increased to 3.1% from 2.9% since our previous review. However,
it also shows that the percentage of portfolio assets that we
treat as defaulted (debt obligations of obligors rated 'CC', 'SD'
or 'D') in our analysis has increased since our previous review
to 3.8% from 2.5%, which has decreased the credit enhancement
available to all classes of notes," S&P said.

"We have also observed a decrease in the portfolio's weighted-
average maturity and an improvement in portfolio's credit
quality, which resulted in lower scenario default rates across
all rating levels in our analysis," S&P said.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rate for each
rated class. In our analysis, we used the portfolio balance that
we consider to be performing (assets rated 'CCC-' or above), the
reported weighted-average spread of 3.1%, and the weighted-
average recovery rates that we considered to be appropriate. We
incorporated various cash flow stress scenarios using our
standard default patterns, levels, and timings for each rating
category assumed for each class of notes, in conjunction with
different interest stress scenarios," S&P said.

"We have observed that the credit support available to the
primary issuer's class A, B, and C notes and to the secondary
issuer's class C and E notes is now commensurate with higher
ratings. We have therefore raised our ratings on these classes of
notes," S&P said.

"The application of the largest obligor default test constrained
our ratings on the primary and secondary issuers' class D notes.
Although the test allows for a ratings uplift on the secondary
issuer's class E notes, it caps the maximum potential on these to
two notches. The test measures the risk of several largest
obligors within the portfolio defaulting simultaneously. We
introduced this supplemental stress test in our 2009 criteria
update for corporate collateralized debt obligations (CDOs)," S&P
said.

"Approximately 1.4% of the assets in the transaction's portfolio
are not euro-denominated. Since all liabilities in the
transaction are denominated in euros, the issuer has entered into
cross-currency swap agreements throughout the life of the
transaction in order to mitigate the risk of foreign-exchange-
related losses," S&P said.

"Our analysis of the swap counterparties and the swap
documentation indicates that they are not consistent with our
2010 counterparty criteria. To assess the potential impact of
this on our ratings, we have assumed that the transaction does
not benefit from the currency swaps. We concluded that, in this
scenario, the primary issuer's class A notes would achieve a 'AA+
(sf)' rating. Under our criteria, our ratings on the swap
counterparties support our ratings on all other classes.
Consequently, we have not applied any additional foreign-
exchange-related stresses to this class of notes," S&P said.

              Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

          http://standardandpoorsdisclosure-17g7.com

Ratings List

Class           Rating
          To             From

Highlander Euro CDO II B.V./Highlander Euro CDO II (Cayman) Ltd.

EUR771.3 Million Primary Secured Floating-Rate And Subordinated
Notes; Secondary Senior-Secured Floating-Rate Notes, Secondary
Mandatorily Redeemable Preferred Securities, Secondary
Combination Securities

Ratings Raised

Highlander Euro CDO II B.V.

A         AA+ (sf)       AA- (sf)
B         A (sf)         BBB+ (sf)
C         BBB (sf)       BB+ (sf)

Highlander Euro CDO II (Cayman) Ltd.

C         BBB (sf)       BB+ (sf)
E         CCC+ (sf)      CCC- (sf)

Ratings Affirmed

Highlander Euro CDO II B.V.

D         B+ (sf)

Highlander Euro CDO II (Cayman) Ltd.
D         B+ (sf)


MONASTERY 2006-I: S&P Lowers Rating on Class D Notes to 'CCC'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on all classes of notes
in Monastery 2006-I B.V. "At the same time, we affirmed and
removed from CreditWatch negative our ratings on all classes of
notes in Monastery 2004-I B.V.," S&P said.

"These rating actions reflect what we consider to be the
transactions' deteriorating credit performance, our analysis of
set-off risk as a result of duty-of-care claims, and our analysis
of counterparty risk in the transactions," S&P said.

                   Potential Duty-Of-Care Claims

"On Jan. 14, 2011, we lowered and kept on CreditWatch negative
all classes of notes in both transactions, as a result of
deteriorating credit performance and our assessment of potential
set-off risk from duty-of-care claims. Since then, we have
received further information surrounding the extent of duty-of-
care claims from the security trustee, ATC Capital Markets. As a
result of these factors, we have reviewed our ratings and taken
further rating actions in Monastery 2004-I and Monastery 2006-I,"
S&P said.

"Each of the asset pools currently contains a large proportion of
loans whose borrowers are alleging, among other issues, due-care
failures with respect to the selling of accompanying insurance
products and the overextension of credit. We understand that DSB
Bank N.V. has about 15,000 duty-of-care claims filed against it.
For Monastery 2004-I, 22.9% of the outstanding balance had a
duty-of-care claim outstanding as of June 2011, compared with
26.9% for Monastery 2006-I," S&P said.

"In September 2011, DSB Bank's insolvency administrator and
consumer organizations entered a framework agreement to clarify
the extent and potential set-off amount of these claims. The
agreement is to allow borrowers to offset compensation amounts
against their outstanding loan balance. Pursuant to the
agreement, borrowers will first set off the compensation amount
against any arrears, and subsequently against the principal
amount outstanding of any loan at their discretion -- most likely
the loans bearing the highest interest," S&P said.

"Under the agreement, consumer organizations and legal insurers
cannot accept the framework agreement on behalf of borrowers, and
each borrower who has filed a duty-of-care claim will need to opt
into a settlement in writing based on the framework agreement. We
understand that the consumer organizations have advised borrowers
of this obligation. Based on our understanding of the status
of the framework agreement, we expect those consumers who are
affected to exercise their rights of set-off during 2012," S&P
said.

"Based on our understanding of the framework agreement, in our
analysis we assume set-off risk amounts of 4.2% of the
transaction in Monastery 2004-I, and 3.4% of the transaction in
Monastery 2006-I. We understand that the issuer intends to claim
against the DSB Bank estate on the basis of, among other factors,
a breach of the representations and warranties provided by DSB
Bank at sale to the issuer. However, given the uncertainty as to
the timing of any recoveries, and as the issuer would be one of a
number of unsecured claimants against DSB Bank's insolvency, we
have not considered any potential recoveries in our analysis,"
S&P said.

                            Credit Risk

"Monastery 2004-I currently has a pool factor of approximately
44% and Monastery 2006-I has a pool factor of approximately 63%.
Credit enhancement levels for both transactions have improved
since closing, being significantly more pronounced in Monastery
2004-I. Both transactions benefit from reserve funds; the reserve
fund for Monastery 2004-I (98.8% of its target level) and
Monastery 2006-I (100% of its target level) provide 3.70% and
1.93% credit enhancement to the notes. The presence of reserve
funds will somewhat mitigate the set-off risk in relation to
potential duty-of-care claims," S&P said.

"The collateral performance of these transactions deteriorated
after the bankruptcy of DSB Bank in October 2009, resulting in
small reserve fund draws and a significant increase in arrears
over a 12-month period. However, the performance has shown signs
of stabilizing in recent quarters, in our view," S&P said.

"We have taken these factors into consideration in our rating
decisions, and have removed the ratings from CreditWatch negative
as a result of our analysis. This analysis includes an
expectation of a reduction in the balance of the reserve fund and
asset pool, through set-off risk arising from duty-of-care claims
relating to overextension of credit and the misselling of
insurance by the insolvent originator," S&P said.

                     Counterparty Criteria

"We do not consider the swap agreements for either transaction to
be in line with our 2010 counterparty criteria. Rather, the swap
counterparty's swap agreement reflects replacement language in
line with our previous counterparty criteria. Therefore, under
our criteria, the highest potential rating on the notes in these
transactions is equal to the issuer credit rating on the swap
provider plus one notch," S&P said.

"In light of this, on June 27, 2011, we lowered to 'AA- (sf)' our
rating on the class A2 notes in Monastery 2004-I, to reflect our
then rating on Deutsche Bank AG (A+/Stable/A-1) as swap
guarantor; and we removed the rating on the class A2 notes from
CreditWatch negative for counterparty reasons, as the rating
already reflected the then rating on The Royal Bank of Scotland
PLC (A+/Stable/A-1)," S&P said.

"On Dec. 21, 2011, we restated the CreditWatch negative placement
on the class A2 notes in Monastery 2004-I and Monastery 2006-I,
to reflect the ratings on Deutsche Bank and The Royal Bank of
Scotland. As part of the rating actions, we have removed from
CreditWatch negative our ratings on the class A2 notes in both
transactions for counterparty reasons," S&P said.

                          Servicing

"We understand that the noteholders have voted in favor of Quion
Services B.V. assuming the role of servicer to the transaction.
We understand that May 2012 remains the target date for Quion to
assume servicing responsibilities. Under the sub-delegation
agreement, Quion will service DSB Bank's portfolios for an
initial period of five years," S&P said.

                 Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:

          http://standardandpoorsdisclosure-17g7.com

Ratings List

Class               Rating
          To                    From

Monastery 2006-I B.V.
EUR875 Million Secured Mortgage-Backed Floating-Rate Notes

Ratings Lowered and Removed From CreditWatch Negative

A2        A (sf)                AA- (sf)/Watch Neg
B         BB+ (sf)              A- (sf)/Watch Neg
C         B (sf)                BB+ (sf)/Watch Neg
D         CCC (sf)              B (sf)/Watch Neg

Monastery 2004-I B.V.
EUR861 Million Secured Mortgage-Backed Floating-Rate Notes

Ratings Affirmed and Removed From CreditWatch Negative

A2        AA- (sf)              AA- (sf)/Watch Neg
B         A (sf)                A (sf)/Watch Neg
C         BBB (sf)              BBB (sf)/Watch Neg
D         BB (sf)               BB (sf)/Watch Neg


WOOD STREET I: S&P Raises Rating on Class E Notes to 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Wood Street CLO I B.V.'s class A, B, C, D1, D2, and E notes.

"The rating actions follow our assessment of the transaction's
performance -- using data from the latest available trustee
report dated Dec. 20, 2011 -- and a cash flow analysis. We have
taken into account recent developments in the transaction and
reviewed the transaction under our 2010 counterparty criteria,"
S&P said.

"Our analysis indicates that the credit enhancement available for
all the rated notes has increased since we took rating action on
the transaction on Feb. 24, 2010. In our opinion, this is due to
an increase in the aggregate collateral balance of the portfolio,
as a result of higher recoveries than previously assumed on
assets that we considered to be defaulted (i.e., rated 'CC', 'SD'
[selective default], or 'D'). From the December 2011 trustee
report, we observe an improvement in the coverage tests, which
are all currently passing, and also an increase in the weighted-
average spread to 3.41% from 2.81%," S&P said.

"In addition, our analysis indicates that the weighted-average
maturity of the portfolio has decreased since our February 2010
review. Together with a general improvement in the credit quality
of the portfolio, these factors have resulted in a reduction of
our scenario default rates (SDRs) for all rating categories in
our analysis of this transaction," S&P said.

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

"From our analysis, 16.4% of the performing assets are non-euro-
denominated, and are hedged under specific cross-currency swap
agreements. In our opinion, the documentation for these cross
currency swaps does not fully reflect our 2010 counterparty
criteria. Hence, our cash flow analysis considered scenarios
where the currency swap does not perform and where, as a result,
the transaction is exposed to changes in currency rates," S&P
said.

"Our credit and cash flow analyses, without giving credit to the
cross-currency swap counterparties, indicate that the credit
enhancement available to the class A notes is now at a level that
is commensurate with a higher rating than we previously assigned.
We have therefore raised to 'AA+ (sf)' from 'AA (sf)' our rating
on these notes," S&P said.

"In our opinion, the credit enhancement available to the class B,
C, D1, D2, and E notes is now consistent with higher ratings than
previously assigned, taking into account our credit and cash flow
analyses. We have therefore raised our ratings on all these
notes. As the updated ratings on these notes are lower than those
on the cross-currency swap counterparties in the transaction,
they are not constrained by the ratings on the cross-currency
swap counterparties," S&P said.

"The rating on the class E notes was constrained by the
application of the largest obligor default test, a supplemental
stress test that we introduced in our 2009 criteria update for
corporate collateralized debt obligations (CDOs)," S&P said.

Wood Street CLO I is a managed cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The transaction closed in
September 2005 and is managed by Alcentra Ltd.

             Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

      http://standardandpoorsdisclosure-17g7.com

Ratings List

Wood Street CLO I B.V.
EUR460.65 Million Senior Secured Floating-Rate Notes

Class                  Rating
             To                     From

Ratings Raised

A            AA+ (sf)               AA (sf)
B            A+ (sf)                A- (sf)
C            BBB+ (sf)              BB+ (sf)
D1           BB+ (sf)               B- (sf)
D2           BB+ (sf)               B- (sf)
E            B+ (sf)                CCC- (sf)


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


CREDIT BANK OF MOSCOW: S&P Assigns B+ Counterparty Credit Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
and 'B' short-term counterparty credit and 'ruA+' Russia national
scale ratings to Credit Bank of Moscow (CBM). The outlook is
stable.

"The ratings on CBM reflect the bank's 'bb' anchor, as well as
its 'moderate' business position, 'moderate' capital and
earnings, 'moderate' risk position, 'average' funding, and
'adequate' liquidity, as our criteria define these terms. The
stand-alone credit profile (SACP) is 'b+'. We assess CBM as
having 'low' systemic importance," S&P said.

"Under our bank criteria, we use the Banking Industry Country
Risk Assessment economic and industry risk scores to determine a
bank's anchor, the starting point in assigning an issuer credit
rating. Russia's economic risk score is '7' and the industry risk
score is '7'," S&P said.

The anchor for a commercial bank operating only in Russia is
'bb'.

"Our assessment of CBM's business position as "moderate" balances
the bank's well-established position in Moscow and the Moscow
Oblast with the execution risks related to its high growth
appetite. We consider CBM's business stability to be generally in
line with that of the market. Corporate banking constitutes 83%
of the book and retail lending is still developing," S&P said.

"Our assessment of CBM's capital and earnings as 'moderate'
reflects our expectations of a significant slowdown in CBM's
growth rates within the next 12-24 months, compared with over 50%
growth in loans the bank registered in 2011," S&P said.

"We consider CBM's risk position to be 'moderate'. The assessment
balances CBM's better-than-average asset-quality measures and
below-average sector concentration with the execution risks
embedded in its unseasoned, very rapidly growing loan book," S&P
said.

"CBM's funding is 'average' and liquidity is 'adequate', in our
opinion. Total customer funds comprised 69% of liabilities as of
Sept. 30, 2011. The loans-to-deposits ratio remains a moderately
high 120% as of Sept. 30, 2011. Cash and equivalents contribute
about 12% of total assets as of the same date," S&P said.

The issuer credit rating on CBM is equal to the bank's SACP,
reflecting both its "low" systemic importance in Russia's banking
system and no uplift for shareholder support.

"The stable outlook reflects our expectation of a substantial
slowdown in CBM's growth rates, which should allow the bank to
maintain sufficient capitalization. We also anticipate some
deterioration in CBM's asset quality and margins over the next
two years, but not to the extent that it would significantly harm
CBM's SACP," S&P said.

"We could take a positive rating action if the bank posted more
conservative growth rates as its loan portfolio seasons, but
without significant deterioration of asset quality. These factors
together could lead to an improvement of our assessment of the
bank's risk position and a subsequent upgrade," S&P said.

"We could lower our risk assessment from 'moderate' to 'weak' and
subsequently take a negative rating action if execution risk
related to CBM's fast growth occurred; we see the main risk area
as asset quality. If the RAC ratio deteriorated to less than 5%,
we would lower our capital and earnings assessment to "weak" and
downgrade CBM. A decline in CBM's liquidity reserves or more
aggressive management of its 12-month maturities could also
result in a negative rating action," S&P said.


SPANAIR SA: Files for Bankruptcy Protection in Barcelona
--------------------------------------------------------
Ana Garcia at Dow Jones Newswires reports that Spanair has filed
for bankruptcy protection in a Barcelona court following the
abrupt suspension of its operations Friday night.

According to Dow Jones, a company spokesman confirmed Monday that
the company, whose liabilities exceed EUR300 million, is also
seeking authorization to lay off its workforce.

The Barcelona-based carrier's main shareholder with an 85.6%
stake is a group of local investors led by the Catalan
government, Dow Jones discloses.  Spanair's former owner,
Scandinavian airline SAS AB (SAS.SK), owns 10.9%, Dow Jones
notes.

The Catalan government has injected EUR150 million into Spanair
since taking it over in 2009, Dow Jones recounts.

Dow Jones relates that one person familiar with the situation
said meeting payroll and fuel payments due at the end of January
had become a major challenge for the company, at a time
Catalonia's government is facing drastic budget cuts amid an
unprecedented economic slump.

The Troubled Company Reporter-Europe reported on Jan. 30, 2012,
that Spanair ceased operations after Qatar Airways Ltd. halted
takeover talks and the regional government refused to provide
further funding.  The carrier, as cited by Bloomberg, said in an
e-mailed statement that the final flight landed at about 10:00
p.m. on Friday, citing "a lack of financial visibility for the
coming months."  "We were in a very advanced process of finding a
financial partner, but we were notified by the regional
government that it couldn't finance our operations anymore and
that Qatar wouldn't invest," Bloomberg quoted Chairman Ferran
Soriano as saying on state-owned TVE.  Closing operations was
"the most prudent and safe" decision, the firm stated.  SAS,
which sold 80% of the airline in March 2009, said in a statement
it will write down the value of its remaining stake by
SEK1.7 billion (US$252 million), Bloomberg disclosed.

Spanair SA is the fifth-largest airline by passengers in Spain.
Founded in 1986, operated from 15 Spanish airports and had routes
to Europe, Africa and the Middle East.  The airline carried 12.56
million passengers in 2011.  The company has more than 2,000
employees.


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


FERROMET: Creditors Approve Debt Repayment Plan
-----------------------------------------------
Janie Davies at Metal Bulletin reports that Ferromet's plan for
the repayment of its debts and the structure of its chrome assets
has been approved by creditors.

According to Metal Bulletin, Ferromet is undergoing a
restructuring that hinges on the sale of its chrome assets in
Kosovo and Albania held a meeting on Jan. 26, at which creditors
approved the company's proposal to repay 25% of each claim.
The assets comprise a concentrator plant in Kosovo and a mine in
Albania, which are valued at SEK20.5 million (U$3 million), and
the subsidiary owes the parent SEK8.3 million, Metal Bulletin
states.

Creditors will also be granted an additional dividend based on
the outcome of the transfer of the chrome subsidiary, which will
be calculated in relation to the creditor's claim, Metal Bulletin
discloses.

"We needed a majority of 75% and we met the criteria.  This has
been registered and accepted by the local court," Metal Bulletin
quotes the Ferromet spokesman as saying.  "This is a partial
payment for the creditors; the balance will be paid once we have
sold and received the payment for our assets."

The spokesman, as cited by Metal Bulletin, said "We have been
approached by additional potential buyers and our aim is to get
as much [cash] as possible for our creditors."

As reported by the Troubled Company Reporter-Europe on Jan. 25,
2012, Metal Bulletin related that Ferromet requested the
restructuring in June after it accumulated debts and had its
funding pulled by Danske Bank, Metal Bulletin recounts.  A
spokesman for the company confirmed in August that the company
had been spending money to support the underperforming chrome
assets, Metal Bulletin noted.  It has been operating under the
supervision of its lawyers since the restructuring was approved,
Metal Bulletin disclosed.  Ferromet had debts to the value of
SEK52.7 million (US$7.8 million) last summer, Metal Bulletin
said, citing documents filed with Sweden's bankruptcy court in
June.

Ferromet is a Swedish ferro-alloys trading house.


SAAB AUTOMOBILE: Up to Five Parties Express Interest in Takeover
----------------------------------------------------------------
Ola Kinnander at Bloomberg News reports that four or five parties
are interested in buying all of Saab Automobile.

According to Bloomberg, Hans Bergqvist and Anne-Marie Pouteaux,
the administrators of Saab's bankruptcy, said additional parties
are interested in buying parts of the company.

The administrators aim to sell Saab intact, they said, declining
to identify any interested parties or say whether a bid has been
made, Bloomberg notes.

                            About Saab

Saab, or Svenska Aeroplan Aktiebolaget (Swedish Aircraft
Company), was founded in 1937 as an aircraft manufacturer and
revealed its first prototype passenger car 10 years later after
the formation of the Saab Car Division.  In 1990, Saab
Automobile AB was created as a separate company, jointly owned by
the Saab Scania Group and General Motors, and became a wholly-
owned GM subsidiary in 2000. In February 2010, Spyker Cars N.V.
was renamed Swedish Automobile N.V. (Swan) on June 15, 2011.

Saab Automobile AB currently employs approximately 3,700 staff in
Sweden, where it operates production and technical development
facilities at its headquarters in Trollhattan, 70 km north of
Gothenburg.  Saab Cars North America is located in Royal Oak,
Michigan employing approximately 50 people responsible for sales,
marketing and administration duties for the North American
market.

On Dec. 19, 2011, Swedish Automobile N.V. disclosed that Saab
Automobile AB (Saab Automobile), Saab Automobile Tools AB and
Saab Powertrain AB filed for bankruptcy with the District Court
in Vanersborg, Sweden.  After having received the recent position
of GM on the contemplated transaction with Saab Automobile,
Youngman informed Saab Automobile that the funding to continue
and complete the reorganization of Saab Automobile could not be
concluded.  The Board of Saab Automobile subsequently decided
that the company without further funding will be insolvent and
that filing bankruptcy is in the best interests of its creditors.
Swan does not expect to realize any value from its shares in Saab
Automobile and will write off its interest in Saab Automobile
completely.


===========
T U R K E Y
===========


HSBC AS: Moody's Affirms 'D+' Standalone BFSR; Outlook Negative
---------------------------------------------------------------
Moody's Investors Service has downgraded the long-term global
local currency (GLC) deposit rating of HSBC Bank A.S. - Turkey to
Baa1 from A3 and affirmed the D+ standalone bank financial
strength rating (BFSR), but remapped it to Ba1 from Baa3 on the
long-term scale. At the same time, Moody's downgraded the bank's
national scale rating (NSR) to Aa2.tr from Aa1.tr. The rating
agency also affirmed HSBC -- Turkey's Ba3 long-term foreign
currency deposit rating, Prime-2 and TR-1 short-term GLC deposit
ratings. The outlook for the foreign-currency deposit rating is
positive. The outlook on the short-term ratings is stable, while
the outlook on the other ratings has been changed to negative
from stable.

Ratings Rationale

Moody's says that the downgrade of the standalone GLC deposit
rating was triggered by a combination of (i) the deterioration in
the bank's modest profitability, in risk-adjusted terms (ii)
efficiency indicators lagging sector average; and (iii) Moody's
expectation of a system-wide economic slowdown in Turkey that
will exert further pressure on the bank's asset quality and
profitability indicators.

Moody's believes that the D+ BFSR is supported by the bank's
overall small consumer and commercial franchise and its modest
credit card and corporate franchises, sound capitalization and
liquidity. Additional supporting factors include its moderate
asset quality, and improving deposit-funding base. However, the
lower remapping of the BFSR and the negative outlook reflect the
bank's below sector average profitability indicators -- in risk-
adjusted terms -- and the longer-term challenges that the
evolution of its franchise faces, namely the strong competition
from other domestic banks. This includes banks with strong retail
and commercial franchises that have also pursued network
expansions.

The share of revenues from retail operations are modest, because
the historical performance of the bank's retail portfolio has
constrained its ability to effectively commercially leverage its
pre-2008 branch expansion. Furthermore, its asset quality could
experience higher volatility compared with the sector average,
due to the bank's higher exposure to unsecured consumer credits
and SMEs, segments that are more vulnerable to economic swings.
The assigned rating also reflects the bank's relatively weaker
efficiency indicators at a time when efficiency and economies of
scale are of increasing importance due to the lower net interest-
margin environment within the Turkish banking system. The
expansionary mode of the bank's franchise is one of the factors
adversely affecting its efficiency indicators and Moody's
believes that this metric could improve over the medium term, if
the bank's projected higher geographical coverage potentially
yields an increased commercial leverage over the medium term.

Moody's downgraded HSBC -- Turkey's NSR to Aa2.tr from Aa1.tr --
the lower of the two NSRs mapping from the Baa1 GLC deposit
rating -- due to the negative outlook on the bank's GLC rating.
The rating carries a negative outlook due to the negative outlook
on the bank GLC deposit rating. The affirmation of the bank's
short-term GLC deposit rating resulted in the affirmation of the
bank's short-term NSR of TR-1.

Potential Triggers for an Upgrade/Downgrade

There is currently no upward pressure on the BFSR, reflected in
the negative outlook. Downward rating pressure could emerge if
(i) profitability and efficiency indicators weaken further; (ii)
asset quality deteriorates; (iii) retail revenue generation
declines; or (iv) the credit growth rate exceeds growth in high-
quality stable deposits, increasing the bank's reliance on
wholesale funding and reversing the improving trend in the bank's
funding base.

The bank's long-term GLC deposit rating incorporates parental
support from HSBC Holdings Plc, (Aa2, with negative outlook).
This provides three notches of rating uplift to HSBC -- Turkey's
GLC deposit rating. However, despite the high rating of the
parent compared with HSBC -- Turkey's BFSR and Moody's
assumptions of a high degree of parental support (in case of
need), the combination of (i) the negative outlook on the
parent's rating; and (ii) the negative outlook on the HSBC --
Turkey's BFSR underpin the negative outlook on its GLC rating.

Rating Methodology

The principal 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.

Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated
by a ".nn" country modifier signifying the relevant country, as
in ".mx" for Mexico. For further information on Moody's approach
to national scale ratings, please refer to Moody's Rating
Implementation Guidance published in August 2010 entitled
"Mapping Moody's National Scale Ratings to Global Scale Ratings."


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


GENESIS ADORATION: To be Put Into Voluntary Liquidation
-------------------------------------------------------
Meetpie.com reports that Genesis Adoration Ltd is closing its
doors this week after more than 25 years in business.  The
Sussex-based agency will be put into voluntary liquidation due to
the trade show services and business travel arms of the company
under-performing, the report says.

According to the report, managing director Paul Bowie said the
business would officially be put into voluntary liquidation on
February 3 by himself and fellow shareholder Richard Heywood.

"The business was made up of three different offerings - the
trade show services business, the business travel agency and the
events side. With trade shows and business travel, the market had
changed dramatically and the business was not coming in and this
had a big effect on the whole business. There really is not that
much space for small business travel agents, and the trade shows
had really dropped off over the past three years," Meetpie.com
quotes Mr. Bowie as saying.

Meetpie.com relates that Mr. Bowie -- who is the largest creditor
after investing in the company himself -- said he had been able
to shut down the business travel side smoothly so that no clients
were impacted.  He pointed out that the company's events arm was
doing "as well as most UK-based event agencies were doing," but
given the losses in other areas sadly the company had been forced
to close, the report relays.

Meetpie.com, citing the company's last full set of accounts filed
at Companies House for the year ending May 31, 2010, discloses
that turnover was down 17% to GBP2.8 million compared to the
previous year's turnover of GBP3.4 million.

Genesis Adoration Ltd is a specialist event management agency.


NAC EUROLOAN: S&P Raises Ratings on Two Note Classes From 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
NAC EuroLoan Advantage I Ltd.'s class A-1, A-2, B, and C notes.
"At the same time, we withdrew our rating on the class A-3
notes," S&P said.

"The rating actions follow our assessment of the transaction's
performance -- using data from the latest available trustee
report dated Nov. 30, 2011 -- and a cash flow analysis. We have
taken into account recent developments in the transaction and
reviewed the transaction under our 2010 counterparty criteria,"
S&P said.

"From our analysis, we have observed from the November 2011
trustee report a reduction in the principal balance of the class
A-1, A-2, and A-3 notes. These notes have been paid down using
principal proceeds, as well as interest proceeds that have been
diverted to cure the failing class A/B par value ratio test. In
our opinion, this has increased the credit enhancement available
for all classes of notes and led to an improvement in the
overcollateralization test results since our rating action on May
7, 2010. At the same time, the weighted-average spread earned on
the collateral pool has also increased to 3.21% from 2.49%," S&P
said.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate for each rated class. In
our analysis, we used the reported portfolio balance that we
considered to be performing and the weighted-average recovery
rates that we considered to be appropriate. We incorporated
various cash flow stress scenarios, using alternative default
patterns, levels, and timings for each liability rating category,
in conjunction with different interest rate stress scenarios. Due
to the static nature of the portfolio, we also took into
consideration stressed scenarios for the spread of the underlying
loans. The final break-even default rate for the rated classes
took into account these scenarios," S&P said.

"From our analysis, we have observed that British pound sterling-
denominated and U.S. dollar-denominated assets currently comprise
31.6% and 15.4% of the performing portfolio. These assets are
naturally hedged by the class A-1 sterling liabilities and the
class A-2 dollar liabilities, with any mismatches hedged by
options. We also observe that assets denominated in Swedish krona
or Swiss francs comprise 6.7% of the performing portfolio. These
assets are hedged under a cross-currency swap agreement," S&P
said.

"In our opinion, the documentation for both the options and
cross-currency swap agreements does not fully reflect our 2010
counterparty criteria. Hence, in our cash flow analysis, we also
considered scenarios where the option provider and cross-currency
swap counterparty do not perform and where, as a result, the
transaction is exposed to changes in currency rates," S&P said.

"Our credit and cash flow analyses indicate that the credit
enhancement available to the class A-1 and A-2 notes is now at a
level that is commensurate with a higher rating than we
previously assigned. However, the rating is capped at the issuer
credit rating on the hedge counterparty plus one notch. We have
therefore raised to 'AA- (sf)' from 'A+ (sf)' and removed from
CreditWatch positive our ratings on the class A-1 and A-2 notes,"
S&P said.

"As the class A-3 notes fully paid down at the October 2011
interest payment date, we have withdrawn our rating on the class
A-3 notes. At the time of withdrawal, the rating was on
CreditWatch positive," S&P said.

"In our opinion, the credit enhancement available to the class B
and C notes is now consistent with higher ratings than previously
assigned, taking into account our credit and cash flow analyses.
We have therefore raised our ratings on these notes. As the
updated ratings on the class B and C notes are lower than that on
the hedge counterparty in the transaction, they are not
constrained by the rating on the hedge counterparty," S&P said.

"None of our ratings on the notes were constrained by the
application of the largest obligor default test, a supplemental
stress test that we introduced in our 2009 criteria update for
corporate collateralized debt obligations (CDOs)," S&P said.

NAC EuroLoan Advantage I is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The transaction closed in
April 2008 and has a legal maturity in April 2019.

               Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

      http://standardandpoorsdisclosure-17g7.com

Ratings List

NAC EuroLoan Advantage I Ltd.
EUR333 Million, GBP177 Million, and US$130 Million Senior Secured
Floating-Rate and
Deferrable Senior Secured Floating-Rate Notes

Class                 Rating
               To                From

Ratings Raised and Removed From CreditWatch Positive

A-1            AA- (sf)          A+ (sf)/Watch Pos
A-2            AA- (sf)          A+ (sf)/Watch Pos

Ratings Raised

B              BBB+ (sf)         BB+ (sf)
C              BBB- (sf)         BB+ (sf)

Rating Withdrawn

A-3            NR                A+ (sf)/Watch Pos


NR--Not rated.


                            *********

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, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.

Copyright 2012.  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 Peter Chapman at 240/629-3300.


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