TCREUR_Public/120418.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, April 18, 2012, Vol. 13, No. 77



REXEL: Fitch Says US$100-Mil. Tap Issue Won't Affect 'BB' Rating


GLITNIR BANK: Creditors to Get Payment in Kronur
HELLENIC TELECOM: Fitch Puts 'BB' Issuer Default Rating on RWN


BHT GROUP: Saint Gobain Among Potential Bidders
STRINLER GROUP: NAMA Appoints Receivers to Three Subsidiaries


FONDIARIA-SAI SPA: To Merge with Unipol Under Rescue Plan
MX GROUP: Solarday Subsidiary Enter Liquidation Process


E-MAC NL: Fitch Confirms 'Bsf' Rating on Class E Notes
GLOBAL SENIOR: Fitch Says Deed Amendments Won't Affect Ratings
LEO MESDAQ: Fitch Affirms 'Bsf' Ratings on EUR224-Mil. Notes
OPERA FINANCE: Noteholders Set to Vote on Bond Extension


SOVCOMFLOTS OAO: Fitch Says Leverage Remains High


BBVA RMBS: Moody's Cuts Ratings on Three Cert. Classes to 'Ba2'


SAAB AUTOMOBILE: Youngman Places SEK3.2-Bil. Bid for Assets

U N I T E D   K I N G D O M

ABN AMRO: Fitch Upgrades Rating on Subordinated Notes to 'BB+'
AQUASCUTUM: On Verge of Collapse; Around 250 Jobs at Risk
ASSETCO PLC: Restates 2010 Revenues; Moves Into the Red
GAME GROUP: OpCapital Buys Spanish Ops Out of Administration
HORSESHOE HORTICULTURE: Cash Flow Woes Prompt Liquidation

R&M DELUXE: In Receivership; 17 Jobs Affected
SOPHOS LTD: Moody's Affirms 'B2' CFR; Outlook Stable
* UK: One in Four Food Firms at Risk of Insolvency, Study Says


CREDIT-STANDARD: Moody's Downgrades Deposit Ratings to 'B3'



REXEL: Fitch Says US$100-Mil. Tap Issue Won't Affect 'BB' Rating
Fitch Ratings says that Rexel's planned US$100 million tap issue
to its latest US$400 million 6.125% notes due December 15, 2019,
does not affect the 'BB' rating assigned to this instrument on
March 30, 2012 nor the group's Issuer Default Rating of 'BB'.

The additional notes will have the same terms and conditions as
the above debt issue.  The notes, which are being issued under
Reg S/144A distribution, will be senior unsecured obligations of
Rexel and have the same ranking, guarantee structure and
substantially similar covenants as the existing 8.25% senior
notes due 2016 and 7% senior notes due 2018 (both rated 'BB').
Upon completion of this new offering, US$500 million principal
amount of notes will be outstanding.

Fitch notes that Rexel's securitization debt and debt incurred by
non-guarantors of the group (together defined as the 'prior-
ranking' debt) represent 1.6x of total EBITDA.  This is below the
2x threshold that Fitch typically applies under its generic
recovery approach to avoid any subordination for unsecured

The proceeds from the latest bond issuance, including the
proposed tap issue, will be used for general corporate purposes
including the refinancing of existing debt and funding of bolt-on
acquisitions.  This add-on debt issue does not increase the net
debt of the group nor does it affect the group's credit ratios in
any meaningful way.


GLITNIR BANK: Creditors to Get Payment in Kronur
Omar R. Valdimarsson at Bloomberg News, citing Frettabladid,
reports that creditors in Iceland's failed banks will be paid in
kronur which will be transferred to Icelandic accounts.

According to Bloomberg, the Reykjavik-based newspaper, citing
Glitnir Bank hf Chief Executive Officer Kristjan Oskarsson, said
that investors will need central bank approval to exchange the
funds into other currencies.

Bloomberg relates that Mr. Oskarsson told Frettabladid that
claimants of Glitnir have already received ISK10 billion
(US$79 million) under the terms.

The newspaper, citing Oskarsson, said that the caretakers of
Glitnir won't be responsible for the funds after they've been
paid out, Bloomberg notes.

                       About Glitnir Banki

Headquartered in Reykjavik, Iceland, Glitnir banki hf -- offers an array of financial services
to corporation, financial institutions, investors and

Judge Stuart Bernstein of the U.S. Bankruptcy Court for
the Southern District Court of New York granted Glitnir
permission to enter into a proceeding under Chapter 15 of the
U.S. bankruptcy code on January 6, 2008.

HELLENIC TELECOM: Fitch Puts 'BB' Issuer Default Rating on RWN
Fitch Ratings has placed Hellenic Telecommunications Organization
S.A.'s (OTE) 'BB' Long-term foreign currency Issuer Default
Rating (IDR) and OTE PLC's 'BB' senior unsecured rating on Rating
Watch Negative (RWN).

The Rating Watch Negative (RWN) reflects OTE's mid-term tight
liquidity profile in the absence of a tangible refinancing plan
for the company's upcoming maturities in 2013.  At end-2011,
OTE's liquidity was composed of cash balances totalling EUR683
million, complemented by EUR353 million investments in "highly
rated short-term government notes" (as disclosed by the company).
This was later boosted by EUR380 million proceeds from the sale
of OTE's stake in Telekom Serbia in Q112, which was placed in
similar securities.  OTE's current liquidity only covers
maturities due for the remainder of 2012 but only a fraction of
2013.  OTE faces elevated refinancing risk for its upcoming bond
and other syndicated loan redemptions of EUR1.25 billion and
EUR0.9 billion, respectively, in 2013. Fitch stresses that a
failure to devise a refinancing plan to cover 2013 redemptions by
October 2012 may result in a downgrade not necessarily limited to
one notch.

The RWN also reflects the risk of further contraction in the
Greek economy in 2012 & 2013 coupled with the possibility of
domestic competitive and regional regulatory pressures leading to
knock-on effects on OTE's service revenue beyond those identified
in Fitch's rating case.  However, the agency also notes that the
company's FY11 revenue and EBITDA were better than Fitch's
expectations amidst a difficult Greek economic environment.

Negative action on OTE's ratings could also occur as the
sustainability of Greece's public finances and its continued
membership of the eurozone depend upon the implementation of
structural and fiscal reforms. PSI and OSI have given Greece a
window of opportunity, but it will entail a challenging internal
devaluation if the program is to succeed.  The probable
alternative, further default and potential exit from the
eurozone, would be even less palatable.

Positive rating drivers would be material developments in the
relationship with 40% shareholder Deutsche Telekom AG (DT,
'BBB+'/Stable) which lead Fitch to assume greater levels of
formal support for OTE, or a material reversal of the trajectory
of recent rating actions for the sovereign.

OTE's current ratings are constrained by the Greek sovereign
ratings, rather than a significant weakening of OTE's standalone
financial performance.  Even in light of a stronger than expected
FY11 performance, Fitch's rating case factors in further
operating weakness so that in 2012 OTE can incur a drop in
revenue of as much as 7% followed by another 7% decline in 2013.
OTE's net-debt-to-EBITDA ratio, excluding short-term investments,
of 2.54x at FY11 is still comparable to low 'BBB' rated peers.
Aside from sovereign related concerns, liquidity challenges and
using prudent assumptions of its ability to curtail capex outlays
and maintain low dividend payments, Fitch estimates that EBITDA
would need to drop by 40% for OTE's standalone profile to
converge to the 'BB' IDR.  This would take OTE's funds from
operations leverage to 4.5x and interest cover ratio to 4.0x.

However, this analysis only considers the 'static profile' (i.e.
the long-term sustainability of the capital structure relative to
expected operational cash flows).

Potential refinancing support from 40% shareholder DT as a lender
of last resort is also a possibility that Fitch considers in its
analysis, in particular with regard to OTE's liquidity position.
Fitch currently considers that any increased formalization of
support could have a positive impact on OTE's ratings.  Despite
the level and format of any support, it would nonetheless be
unlikely to restore OTE to investment grade against a background
of continued sovereign distress in Greece.


BHT GROUP: Saint Gobain Among Potential Bidders
Geoff Percival at Irish Examiner reports that French building
materials group Saint Gobain is tipped to boost its Irish
presence through a takeover of Tubs and Tiles owner, BHT Group.

KPMG was appointed examiner to the ailing EUR32 million debt-
laden BHT business in February, after which a number of potential
buyers were speculated upon -- including the Dublin-headquartered
Grafton Group, Irish Examiner recounts.

The name of Saint Gobain -- which owns a number of Irish-based
businesses, including the Northern-based bathroom seller,
Bassetts and the plasterboard specialist, Gypsum Industries --
cropped up at the weekend, Irish Examiner relates.

Grafton has refused to comment on it being linked as a possible
bidder for BHT, but if Saint Gobain was to get the business it
would considerably up competition in the Irish market, even
though the bulk of Grafton's business is now done in Britain,
Irish Examiner notes.

At its recent annual results presentation, Grafton's management
suggested that the group wouldn't be overly interested in buying
BHT's retail operations as many outlets were already located
relatively close to those of Woodie's DIY, Grafton's main retail
interest, Irish Examiner states.

However, it has emerged that Grafton has acquired two of BHT's
Brooks timber merchants outlets in the North, Irish Examiner

Although these were outside of BHT's examinership process, the
move would suggest that Grafton is only interested in BHT on a
shop-by-shop basis, rather than as a group-wide entity, Irish
Examiner notes.  According to Irish Examiner, commentators said
Grafton remains on the radar as a potential bidder.

BHT Group provides building, plumbing, tiling and flooring goods.

STRINLER GROUP: NAMA Appoints Receivers to Three Subsidiaries
The Irish Times reports that the National Asset Management Agency
(NAMA) has taken control of three companies led by well-known
Galway developer Chris Crehan. The companies are part of the
Strinler Group, the report says.

The report relates that the agency last week appointed Ken
Fennell of insolvency and restructuring specialists Kavanagh
Fennell as receiver to three companies controlled by Mr. Crehan
and his family: Coolagh Constructions, Kapstone and Inchagoill
Contracting (Salthill).

According to the report, Mr. Fennell was already appointed
receiver to Coolagh Constructions by EBS last October, while
Ulster Bank appointed David Hughes and Luke Charleton of Ernst
Young to both Coolagh and Kapstone around the same time.

Consolidated accounts for that business show that by early 2010
it owed a total of EUR88.6 million to its banks AIB, EBS and
Ulster Bank, the Irish Times discloses.

The figures, for the 12 months ended February 28, 2010, show that
loans given by all three were secured by charges over various
sites owned by the business and with personal guarantees given by
members of the Crehan family, totalling more than EUR26 million,
according to the report.

Strinler group was behind developments in a number of areas
around Galway city, including Knocknacarra, and had sites at
Ballymoneen, Ballyburke and Rahoon.  The group also owned the
Clybaun Hotel in the city.


FONDIARIA-SAI SPA: To Merge with Unipol Under Rescue Plan
Sonia Sirletti and Francesca Cinelli at Bloomberg News report
that Unipol Gruppo Finanziario SpA would hold about 67% of
insurer Fondiaria-SAI SpA after a planned merger is completed,
valuing the biggest investor in Italy's second-largest insurer at
a 33% discount.

According to Bloomberg, Unipol said it values shares of Premafin
Finanziaria SpA, Fondiaria's controlling shareholder, at as much
as 19.5 euro cents ($0.26) a share.  That's 33% lower than
Premafin's last trading price before its suspension on April 16,
Bloomberg notes.  Unipol's proposed terms of the merger would
allow it to hold 66.7% of the new entity, Bloomberg discloses.

Unipol agreed in January to buy new shares in Premafin as part of
a plan to rescue unprofitable Fondiaria, Bloomberg recounts.  The
purchase will allow Premafin to participate in the EUR1.1 billion
stock sale announced by Fondiaria on Jan. 30, Bloomberg says.
After the capital increase, Unipol's insurance unit, Premafin,
Fondiaria and its unit Milano Assicurazioni SpA will merge to
challenge Italy's biggest insurer, Assicurazioni Generali SpA,
Bloomberg discloses.

Premafin's board was set to meet on April 16 to review Unipol's
evaluation.  If directors approve the plan, both Fondiaria and
Milano's boards were expected to discuss it, according to

Fondiaria, which gets most of its revenue from property and
casualty businesses, is suffering from rising claims and tougher
competition at home, Bloomberg notes.  The insurer posted a net
loss of EUR852.7 million last year, after it wrote down the value
of non- strategic assets and real estate by EUR657 million,
Bloomberg recounts.

Fondiaria - Sai S.p.A. offers life and non-life insurance and
reinsurance in Italy and abroad.  The Company also offers life,
health, accident, automobile, marine, fire, general liability,
and credit insurance.  Through subsidiaries, Fondiaria - SAI is
active in real estate, securities brokerage, and agriculture.

MX GROUP: Solarday Subsidiary Enter Liquidation Process
Recharge reports that Solarday, a subsidiary of MX Group, has
entered the liquidation process, dealing a blow to Italy's
flagging hopes of keeping a manufacturing footprint in the PV

According to the report, Solarday has posted a prominent message
on its Web site saying it has entered the liquidation process.

Solarday has also touted itself as a building-integrated PV
specialist, capable of producing bespoke modules in various
shapes and colours for use in high-end buildings - a market
segment that a number of Italian manufacturers have targeted.

It is unclear how Solarday's bankruptcy will affect the broader
plans of Milan-based MX, itself part-owned by Switzerland's Solar
Industries Group, the report notes.

Solarday had opened its module assembly plant in Mezzago,
Brianza, Italy in 2006 and had employed over 100 people.  MX
Group acquired a majority ownership of Solarday in 2011.


E-MAC NL: Fitch Confirms 'Bsf' Rating on Class E Notes
Fitch Ratings has confirmed four E-MAC NL transactions' ratings:
E-MAC NL 2004-I B.V. (E-MAC NL 2004-I), E-MAC NL 2004-II B.V. (E-
MAC NL 2004-II), E-MAC Program III B.V. Compartment NL 2008-I (E-
MAC NL 2008-I) and E-MAC Program II B.V. Compartment NL 2008-IV
(E-MAC NL 2008-IV), ahead of the put option in April 2012.

The transactions' noteholders hold a put option to have their
notes redeemed upon exercising their rights on and after the
first put dates.  The agency understands that the Mortgage
Payment Transactions (MPT) provider (CMIS Nederland B.V.) for E-
MAC NL 2004-I, E-MAC NL 2004-II and E-MAC NL 2008-I and servicing
advance optionholder (RBS plc) for E-MAC NL 2008-IV will not
grant servicing advances to the issuers, which are required in
order to redeem the notes.  As a result, none of the notes will
be redeemed and the transactions will continue to operate as
before, with the addition of the extension margins, which rank
subordinate to the reserve fund in the priority of payments.

The agency has observed that the excess revenue generated by the
mortgage portfolio remains insufficient to cover the payments due
on the extension margins and the interest deficiency ledgers in
these transactions are gradually building up.  Fitch's ratings do
not address the payment of the extension margin.  In Fitch's
opinion, failure to pay the extension margin would not constitute
an event of default.

Fitch understands that the trustees for both E-MAC NL 2004-I and
E-MAC NL 2008-I held subsequent noteholder meetings in January
2012 to vote on several extraordinary resolutions.  Both meetings
concluded that the frequency of auctions for the mortgage
receivables and put dates should be reduced, but did not
determine to amend the event of default definition.  Noteholders
in E-MAC NL 2004-I also decided to initiate legal proceedings
against the MPT provider.  The agency believes the legal
proceedings may have an effect on the cashflows of the
transactions in the future as the related fees are likely to rank
senior in the waterfall.

The rating actions are as follows:

E-MAC NL 2004-I B.V.

  -- Class A (ISIN XS0188806870): confirmed at 'AAAsf'; Outlook
  -- Class B (ISIN XS0188807506): confirmed at 'AA+sf'; Outlook
  -- Class C (ISIN XS0188807928): confirmed at 'A-sf'; Outlook
  -- Class D (ISIN XS0188808819): confirmed at 'BBB-sf'; Outlook

E-MAC NL 2004-II B.V.

  -- Class A (ISIN XS0207208165): confirmed at 'AAAsf'; Outlook
  -- Class B (ISIN XS0207209569): confirmed at 'A+sf'; Outlook
  -- Class C (ISIN XS0207210906): confirmed at 'BBB+sf'; Outlook
  -- Class D (ISIN XS0207211037): confirmed at 'BBBsf'; Outlook
  -- Class E (ISIN XS0207264077): confirmed at 'Bsf'; Outlook

E-MAC Program III B.V. Compartment NL 2008-I

  -- Class A1 (ISIN XS0348427955): confirmed at 'AAAsf'; Outlook
  -- Class A2 (ISIN XS0344800957): confirmed at 'AAAsf'; Outlook
  -- Class B (ISIN XS0344801765): confirmed at 'AAsf'; Outlook
  -- Class C (ISIN XS0344801922): confirmed at 'Asf'; Outlook
  -- Class D (ISIN XS0344802060): confirmed at 'BBsf'; Outlook

E-MAC Program II B.V. Compartment NL 2008-IV

  -- Class A (ISIN XS0355816264): confirmed at 'AAAsf'; Outlook
  -- Class B (ISIN XS0355816421): confirmed at 'AAsf'; Outlook
  -- Class C (ISIN XS0355816694): confirmed at 'Asf'; Outlook
  -- Class D (ISIN XS0355816934): confirmed at 'BBsf'; Outlook

GLOBAL SENIOR: Fitch Says Deed Amendments Won't Affect Ratings
Fitch Ratings says that Global Senior Loan Index Fund I B.V.'s
ratings will not be impacted as a result of the recent trust deed

The trust deed was amended to remove uncertainty about the
treatment of defaulted assets for the purpose of the
overcollateralization (OC) test and the interest coverage (IC)
test.  This was clarified in March 2012, when amendments to the
transaction documents were executed after noteholders of each
class of notes passed extraordinary resolutions approving the

The amendments mean that defaulted assets will be marked at the
lower of their market value and rating agencies' recovery
estimates for the purpose of calculating OC ratios, instead of
being marked at par.

Fitch notes the OC tests are unusual in that the OC levels could
be elevated by increasing 'CCC' portfolio exposure -- whereas in
more traditional transactions, rising 'CCC' exposure will reduce
OC levels.  For the purpose of calculating the OC tests in this
transaction, the excess 'CCC' bucket is included at the aggregate
of their lowest market value and lowest recovery estimate, as per
the transaction documents.  In Fitch's view, this treatment is
not in line with common market practice.  By taking some assets
rated 'CCC' and below potentially at above their par value and
thereby increasing the OC levels, it could have the reverse of
the intended effect of having traditional haircuts for assets
with substantial credit risk in the OC tests.

Fitch considers the risk of overstating excess 'CCC' assets in
the OC calculation remote given current depressed market values
and recovery prospects for leveraged loans.  As of February 2012
there are no excess 'CCC' assets. Nevertheless, Fitch notes that
excess 'CCC' assets have been accounted for at more than par in
the OC test in the past.

The notes' ratings are as follows:

  -- EUR453.1m class A1 (ISIN XS0327321435): 'AAAsf'; Outlook
  -- EUR42.4m class A2 (ISIN XS0327323217): 'AAsf'; Outlook
  -- EUR115.0m Funding Notes (ISIN XS0327323647): 'BBsf'; Outlook

LEO MESDAQ: Fitch Affirms 'Bsf' Ratings on EUR224-Mil. Notes
Fitch Ratings has affirmed Leo Mesdag B.V.'s notes with Stable
Outlooks, as follows:

  -- EUR642.5m class A (XS0266637171) affirmed at 'Asf'; Outlook
  -- EUR20.5m class B (XS0266638146) affirmed at 'Asf'; Outlook
  -- EUR112.5m class C (XS0266642171) affirmed at 'BBsf'; Outlook
  -- EUR142.5m class D (XS0266642767) affirmed at 'Bsf'; Outlook
  -- EUR82m class E (XS0266644383) affirmed at 'Bsf'; Outlook

The affirmations and Stable Outlooks reflect the stability of the
sole underlying loan, which is secured on a portfolio of 71
department stores and three car parks located throughout the
Netherlands let to three prestigious privately-held retailers,
Hema, Bijenkorf and V&D.  Although passing rent and interest
cover ratio (ICR) have risen since the last rating action in May
2011, these increases were anticipated, and reflect the end of a
partial rental holiday whilst refurbishment works were carried
out on two assets.  Fitch does not anticipate any significant
increase in rental income before loan maturity in 2014.

Although Fitch has characterized the portfolio's collateral as
'A-', representing good to excellent quality, there exists some
differentiation between individual assets.  At the top end Fitch
considers the iconic Amsterdam and The Hague De Bijenkorf
department stores as trophy assets, whilst some of the more
peripherally located Hema and V&D stores are viewed as secondary
by the agency.  The valuer maintains an 'A1' grade, signifying
the highest quality, on 39 assets, (48.5% by market value), 'A2'
on a further 38.4% and 'B1' or 'B2' on the remaining 13.1%.

While the Dutch retail sector is undergoing some stress,
retailers trading in established retail markets are expected to
fare better than those in marginal locations.  Due to long leases
of over 14 years on a weighted average (WA) basis, the main risk
in this transaction is tenant default, and the likely decline in
net operating income (NOI) that this would precipitate.  Although
only 2.5 years remain on the loan, the risk also applies at
maturity when potential providers of debt and equity finance will
factor lease default risk into their risk premiums -- a task made
more difficult by the paucity of publicly available information
about the tenants.

For the rating analysis, that the classes A and B notes can
survive a permanent decline of 20% of NOI alongside cap rates
above 8.5% is a measure of solid investment-grade credit quality
in Fitch's opinion.  For the other notes, their speculative-grade
ratings indicate much less protection against deterioration in
collateral value and financing terms. With a senior loan balance
of EUR1 billion, a bulk asset sale or refinancing would almost
certainly require a "club deal" involving multiple lenders.
However complex, this is eased by the five years between loan and
bond maturity within which to bring about an exit.

OPERA FINANCE: Noteholders Set to Vote on Bond Extension
Simon Packard at Bloomberg News reports that Europe's first
commercial mortgage-backed securities to default on maturity were
the focus of competing proposals on Monday as creditors seek to
recover some of the about US$600 million (US$788 million) they're

Opera Finance (Uni-Invest) BV noteholders were scheduled to vote
on a plan to extend the bonds to 2016 and hire Blackstone Group
LP's Valad Property Group affiliate to sell the real estate
backing the CMBS.  If they reject that plan, senior creditors
will vote on an offer from TPG Capital and Patron Capital
Partners to buy their Class A notes, Bloomberg discloses.

According to Bloomberg, Philip Cropper, CBRE Group Inc. managing
director for real estate finance, said that their decision may be
a model for future CMBS defaults, and show the willingness of
European investors to restructure and dispose of property or sell
the securities to the highest bidder.  About 48% billion of CMBS
will mature during the next three years, Morgan Stanley
estimates, Bloomberg discloses.  Most are backed by non-prime
properties, Bloomberg notes.

Dutch real estate company Uni-Invest Holding NV borrowed the
money and defaulted Feb. 15, when the loans matured, Bloomberg

Investors in the four classes of CMBS notes will first vote on a
"consensual restructuring" of the loans, extending them by four
years, adjusting interest payments and hiring Valad to manage and
sell the collateral, Bloomberg says.  Valad has said the most
junior CMBS noteholders may recover some money after four years,
Bloomberg relates.

Mark Nichol, a structured finance analyst at Bank of America
Merrill Lynch, said that since the value of the real estate
backing the CMBS has fallen, investors owning the three junior
classes of notes will probably approve the Valad plan, Bloomberg
notes.  He said that leaves the Class A noteholders with the
ultimate decision, according to Bloomberg.

If the Class A noteholders reject the Valad proposal, they will
then vote on the TPG-Patron offer of an initial payment of 40
percent, about EUR144 million, plus interest and some expenses,
Bloomberg says.  The balance would be in new four-year notes to
be repaid with asset-sale proceeds, Bloomberg discloses.

The three junior CMBS tranches wouldn't get paid under the Patron
and TPG proposal, Bloomberg notes.


SOVCOMFLOTS OAO: Fitch Says Leverage Remains High
Fitch Ratings says that although OAO Sovcomflot's (Sovcomflot;
'BBB-'/Negative) FY11 results are in line with Fitch's
expectations, leverage remains high in the context of the
company's 'BB+' standalone rating and would need to reduce
dramatically by 2013 following the company's intended IPO to
avoid further negative rating action.  The 'BBB-' Issuer Default
Rating, incorporates a one-notch uplift for state support.
Sovcomflot's FY11 results, published on April 12, 2012, reported
a material decrease in profitability with EBITDAR reducing to
US$510 million from US$561 million in FY10.  This was on account
of weak tanker shipping dynamics and in particular, a further
softening in freight rates and high bunker costs.  Combined with
continually high capex spending, this drove a substantial
deterioration in leverage to 6.2x net adjusted funds from
operations (FFO) as at FY11.

Fitch said in its full rating report published on February 8,
2012, that its rating case expectation for FFO adjusted net
leverage was for around 6.0x in FY11 and FY12 given the
persistent challenging shipping environment, but that this
leverage would need to be cut to around 4.0x by 2013 in order to
avoid a downgrade.  The capacity for the company to deleverage
will be largely dependant on proceeds raised by the company from
the intended IPO being applied in reduction of debt.

The agency emphasizes that where there is no additional certainty
regarding the transaction and its timing by the end of H212, and
therefore an increased likelihood that the IPO will be delayed to
2013, this would lead to increased rating pressure.  Fitch also
calculates that, depending on the development of freight rates
and Sovcomflot's future capex plans, at least US$800 million
would need to be reinvested into Sovcomflot in order for credit
metrics to improve to levels commensurate with the current rating
level.  In the event that tanker fundamentals remain weak in 2013
or proceeds reinvested are less than US$800 million, Fitch would
expect Sovcomflot to moderate its leverage through a reduction in

Sovcomflot is authorized to issue new shares by means of a
presidential decree, on the condition that the Russian government
retains a 75%+1 share stake.  Sovcomflot is believed to be the
only company to have been provided with such a decree and
announcements by the Economic Development Ministry in February
2012 declared that Sovcomflot will be one of the first major
companies to be privatized in 2012.


BBVA RMBS: Moody's Cuts Ratings on Three Cert. Classes to 'Ba2'
Moody's Investors Service has downgraded by one notch to Ba2 (sf)
from Ba1 (sf) the class A1, A2 and A3 notes issued by BBVA RMBS
3, Fondo de Titulizacion de Activos.  The rating action concludes
the review for downgrade initiated by Moody's on December 21,
2011 due to the worse-than-expected performance of the
collateral. Concurrently, Moody's has also withdrawn the ratings
of the class A3 notes that were downgraded, and assigned
definitive ratings to three new classes of notes issued by BBVA

The following ratings were downgraded:

    EUR1200M A1 Certificate, Downgraded to Ba2 (sf); previously
    on Dec 21, 2011 Ba1 (sf) Placed Under Review for Possible

    EUR595.5M A2 Certificate, Downgraded to Ba2 (sf); previously
    on Dec 21, 2011 Ba1 (sf) Placed Under Review for Possible

    EUR960M A3 Certificate, Downgraded to Ba2 (sf); previously on
    Dec 21, 2011 Ba1 (sf) Placed Under Review for Possible

The following new ratings have been assigned:

    EUR681.0M Serie A3a Note, Assigned A1 (sf)

    EUR136,2M Serie A3b Note, Assigned Baa1 (sf)

    EUR63,5M Serie A3c Note, Assigned Ba1 (sf)

    EUR27,2M Serie A3d Note, Assigned Ba3 (sf)

Ratings Rationale

The downgrades reflect the worse-than-expected performance of the
collateral and take into consideration updated reporting
information on recovery rates. The downgrades also reflect
Moody's negative sector outlook for Spanish RMBS and the
weakening of the macroeconomic environment in Spain, including
high unemployment rates.

The withdrawal of the rating of the class A3 notes and the
assignment of new ratings to the new classes of notes issued by
BBVA RMBS 3 follows Moody's review of the recent structural
changes to the class A3 notes. The class A3 notes are replaced by
a senior (75%), mezzanine (15%), mezzanine (7%) and junior (3%)
structure comprised of the A3a, A3b, A3c, A3d notes. The class
A1, A2, B and C notes remain equal and are not affected by the
changes to the class A3 notes. Structural amendments to the terms
and conditions of the A3 notes have created four sub-series (A3a,
A3b, A3c and A3d, or the A3 tranches), which on a combined basis
would receive the same cash flows as the original class A3 notes.
However, the amortization of these notes will be on a sequential
basis amongst these notes for the repayment of principal.

As for the payment of interest, the A3 tranches would carry the
same coupon as the current class A3 notes. However, the interest
is paid pari passu on the class A1, A2 notes and on the sum of
the outstanding balances of the A3 tranches, which on a combined
basis would receive the same cash flows as the current A3 does.
However, the A3a notes would be senior to the A3b, A3c and A3d
notes. Therefore, interest payable to the A3a notes is paid first
out of the interest cash flows destined for the A3 tranches,
followed consecutively by the A3b, A3c and A3d notes.


BBVA RMBS 3 closed in July 2007. The transactions are backed by a
portfolio of first-ranking mortgage loans originated by BBVA
(Aa3/P-1 on Review for Possible Downgrade ) and secured on
residential properties located in Spain. The loans were
originated between 2003 and 2007, with the current weighted
average loan-to-value (LTV) ratio standing at 80.65%. A
significant share of the securitized mortgage loans was
originated via brokers (30.8%) and loans to non-Spanish nationals
(1.50%). BBVA acts as servicer, paying agent and swap
counterparty to the transactions.

Reserve fund and principal deficiency (PDL): Rising levels of
defaulted loans have ultimately caused the full depletion of the
reserve fund and are currently triggering an unpaid PDL. The
unpaid PDL has increased to EUR135 million, which corresponds to
100% of the most junior notes and 30% of the class B notes, from
EUR104 million in March 2011.

Loans more than 90 days in arrears represented 3.42% of the
current portfolio balance as of March 2012, while cumulative
defaults amounted to 6.77% of the original portfolio balance. The
last figure does not include loans repossessed before being 12
months in arrears. Outstanding repossessions represented 5.83% of
original pool balance as of March 2012. The pool factor was
72.27% as of March 2011. For the recovery rates previously
reported, they considered repossession (either payment in kind or
properties allocated to the fondo after the auction) as being
equivalent to a 100% recovery. The cumulative monetary recovery
rate in this transaction as of March 2012 was 6.44%. The
cumulative recovery rate taking into consideration the monetary
recovery and the acquisition value of unsold properties and
assets awarded or paid in kind to the fund by securitized assets
is 48.99%.

Moody's analysis focused primarily on (i) an evaluation of the
underlying portfolio of loans; (ii) historical performance
information and other statistical information; (iii) the credit
enhancement provided via excess-spread, the cash reserve and the
subordination of the notes. As the Euro area crisis continues,
the rating of the structured finance notes remain exposed to the
uncertainties of credit conditions in the general economy. The
deteriorating creditworthiness of euro area sovereigns as well as
the weakening credit profile of the global banking sector could
negatively impact the ratings of the notes.


Moody's has reassessed its lifetime loss expectation taking into
account the collateral performance to date, as well as the
current macroeconomic environment in Spain. In March 2012,
cumulative monetary recovery rose to 6.44%. Moody's has concerns
over the timing and degree of future recoveries in a weaker
Spanish housing market. On the basis of Moody's negative sector
outlook for Spanish RMBS, the rating agency has updated the
portfolio expected loss assumption to 7.7% of original pool
balance up from 5.65% at April 2011.


Moody's has assessed the loan-by-loan information to determine
the MILAN Aaa CE. The rating agency has increased its MILAN Aaa
CE assumptions to 21.7%, up from 16.0% as at April 2011. Moody's
has considered that there could be other characteristics of the
pool that have not been properly captured in the MILAN model.
Therefore, the MILAN number has been qualitatively adjusted in
order to generate a loss distribution with a certain level of
volatility or to account for a higher probability of "fat tail"
events with respect to the expected loss.

The methodologies used in this rating were Moody's Approach to
Rating RMBS in Europe, Middle East, and Africa published in
October 2009, Moody's Updated Methodology for Rating Spanish RMBS
published in October 2009, Cash Flow Analysis in EMEA RMBS:
Testing Structural Features with the MARCO Model (Moody's
Analyser of Residential Cash Flows) published in January 2006,
and Revising Default/Loss Assumptions Over the Life of an
ABS/RMBS Transaction published in December 2008.

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche.

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


SAAB AUTOMOBILE: Youngman Places SEK3.2-Bil. Bid for Assets
Christina Zander at Dow Jones Newswires, citing Swedish daily
Dagens Industri, reports that Chinese car maker Zhejiang Youngman
Lotus Automobile Co. has placed a bid of approximately SEK3.2
billion (US$470 million) for the assets of Saab Automobile AB and
is prepared to invest another SEK10 billion in the company.

According to Dow Jones, the source notes that Bo Lundgren,
general director of the Swedish National Debt Office, or NDO, has
said the authority won't release its collateral in the bankrupt
company unless it gets all of the SEK2.2 billion it lent to Saab
Auto, through the European Investment Bank, back.

Dow Jones notes that the paper said if the NDO doesn't get its
money back, it will keep Saab's profitable subsidiary Saab
Automobile Parts and only sell it at a later time.

Youngman was one of the Chinese investors that stepped forward
when the struggling Swedish auto maker ran out of cash last year
and was forced to seek court protection from its creditors, Dow
Jones relates.  But General Motors Co. refused to license the
technology which provides the basis for Saab's existing models to
any purchaser likely to compete head-to-head with it in China,
where the group is a major player, Dow Jones recounts.

                           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

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

U N I T E D   K I N G D O M

ABN AMRO: Fitch Upgrades Rating on Subordinated Notes to 'BB+'
Fitch Ratings has upgraded two securities issued by ABN AMRO Bank
-- XS0244754254, GBP750 million subordinated Upper Tier II
perpetual notes (c.GBP150 million still outstanding), issued
February 17, 2006 have been upgraded to 'BB+' from 'BB-', three
notches below ABN AMRO's Viability Rating (VR) of 'bbb+'.  This
reflects Fitch's view of below average recoveries on a
subordinated instrument (one notch) and incremental non-
performance risk relative to the bank's VR (two notches).

XS0246487457, EUR1 billion Tier 1 perpetual capital securities,
issued October 3, 2006 have been upgraded to 'BB' from 'BB-',
four notches below ABN AMRO's VR ('bbb+').  The notching reflects
Fitch's view of poor recoveries because of its deep subordination
(two notches) and incremental non-performance risk relative to
the bank's VR (two notches).

The two securities are now rated in line with the standard
notching for similar instruments, as described in Fitch's
criteria 'Rating Bank Regulatory Capital and Similar Securities',
dated December 15, 2011.  Since the ratings of these securities
are notched from ABN AMRO's VR, these ratings are sensitive to
any movement in ABN AMRO's VR.

The upgrades follow the activation of the trigger for the payment
of the coupon on both securities by the payment of an ordinary
share dividend by ABN AMRO.  ABN AMRO has announced that its
general shareholders meeting agreed on the payment of a final
EUR50 million dividend on April 16, 2012 on top of a EUR200
million interim dividend paid in September 2011.  Both securities
are subject to a potential coupon and call ban until March 10,
2013 because of the state aid received by the bank and related
investigation conducted by the European Commission.  However, the
payment of the ordinary share dividend on April 16, 2012 makes
the next coupon payments, due on February 17, 2013 and March 10,
2013, mandatory because of coupon pusher clauses contained within
the terms of the bonds.

AQUASCUTUM: On Verge of Collapse; Around 250 Jobs at Risk
The Scotsman reports that Aquascutum is said to be close to
collapse, with administrators expected to be called yesterday.

According to the Scotsman, around 250 jobs are at risk after its
owner Harold Tillman sold a majority stake in Jaeger, whose
operations are tied with it.

The company, which has dressed Winston Churchill and the Queen
Mother, is the latest victim of an ailing retail market, the
Scotsman relates.  It was sold to Mr. Tillman in 2009, and he has
invested some GBP20 million in a battle to improve its fortunes,
the Scotsman recounts.  However it is understood to be struggling
under increased losses, the Scotsman notes.

Aquascutum, which sells classic tailored clothing, was founded in
1851 by tailor John Emary.

ASSETCO PLC: Restates 2010 Revenues; Moves Into the Red
Rose Jacobs at The Financial Times reports that Assetco restated
its 2010 revenues at nearly half their original value on Tuesday
and moved operating profits for the year into the red due to "a
serious failure of management and internal financial controls".

According to the FT, Tudor Davies, who joined the UK-listed group
as chairman about a year ago as a condition of three of Assetco's
creditors giving further financial support, said "there was a
significant overstatement of profits and assets in the financial
accounts for the year ended March 31 2010".

Last year, shareholders injected GBP16 million into AssetCo --
which has a 20-year contract to supply fire engines and other
equipment to the London Fire Brigade -- to stave off creditors
demanding the company be wound up, the FT recounts.  But it was a
fraught fundraising, with John Shannon, the company's co-founder,
chief executive and 30% shareholder, being forced by a court
injunction to approve the deal, the FT discloses.

In September, the company underwent a financial restructuring in
which GBP69 million was raised, including GBP14 million from
shareholders, the FT relates.

It also reviewed past accounts and said on Tuesday that revenues
for the 2009/10 financial year were GBP18.6 million lower than
stated, at GBP26.2 million, producing operating losses of GBP11.4
million, compared with the GBP17.4 million profit declared by the
previous management, the FT notes.

Revenues in the 18 months to September 30 last year were GBP12.8
million, producing an operating loss of GBP24.1 million, the FT

Mr. Davies, as cited by the FT, said that due to "the lack of
clarity in past financial statements", it was impossible to judge
how much further money would be needed to finance new fire
engines and whether the group would breach its operating

Assetco PLC -- is a United Kingdom-
based holding company.  The Company is engaged in the provision
of management services to the emergency services market.  It is
also engaged in automotive engineering, the provision of asset
management services and the supply of specialist equipment to the
emergency services market.  The Company operates in one segment,
the Fire and Rescue Services.  The Fire and Rescue Services
segment provides management services to the fire and rescue
market.  Its subsidiaries include AssetCo Emergency Limited,
AssetCo Managed Services (ROI) Limited, AssetCo Bermuda Limited,
AssetCo Resource Limited, Simentra Limited, Supply 999 Limited,
AssetCo Municipal Limited and AssetCo Managed Services Limited.
In January 2010, the vehicle assembly business of UV Modular
Limited (UVM) was discontinued.  In September 2009, the Company
disposed its subsidiary, Auto Electrical Services (Manchester)

GAME GROUP: OpCapital Buys Spanish Ops Out of Administration
Reuters reports that Game Group's Spanish operations have been
bought out of administration by investment firm OpCapita, with an
eye to eventually selling them on.

Reuters relates that OpCapita said there were no plans to close
stores across the profitable Game Iberia business, which employs
1,000 people in 290 stores across Spain and Portugal.

According to Reuters, OpCapital said that it was evaluating a
potential sale of Game Iberia while focusing on the operational
turnaround of the British operations.

Game also has operations in France, Scandinavia, Australia and
the Czech Republic, Reuters discloses.

Game Group is a video games retailer.

HORSESHOE HORTICULTURE: Cash Flow Woes Prompt Liquidation
Daily Echo reports that Horseshoe Horticulture Ltd has gone into
liquidation after more than 30 years.

Alexander Kinninmonth and David Green of RSM Tenon in Southampton
have been appointed joint liquidators of the business, the report

Daily Echo says Norman Frampton, a director of the company,
attributed its difficulties to problems which occurred on
contracts, including overruns, allegations of vandalism and late
payment by debtors.  Cash flow problems meant the company was
unable to meet its financial commitments and had no alternative
but to cease trading, the report notes.

"It is a shame to see the closure of such a long-standing family
businesses. With profit margins being squeezed, problems
experienced on contracts create cash flow pressures which can be
difficult to overcome," the report quotes Mr. Kinninmonth as

Horseshoe Horticulture Ltd is a family-run landscape gardening
business.  The company traded from Horseshoe Farm in Broomhill,
Wimborne, and employed 24 people.

R&M DELUXE: In Receivership; 17 Jobs Affected
Gareth Mackie at The Scotsman reports that R&M Deluxe Group has
gone into receivership with the loss of 17 jobs.

According to the Scotsman, joint receivers Gary Fraser and Blair
Nimmo of KPMG said that R&M Deluxe Group, which had employed 45
people, had experienced "challenging trading conditions in recent

Along with a 72,000sq ft flagship site at its headquarters in
Hillington near Paisley, Instyle had stores at Aberdeen,
Tollcross in Glasgow and Uddingston in South Lanarkshire, the
Scotsman discloses.

The outlets in Aberdeen and Glasgow closed last week before the
receivers were called in, with the loss of seven jobs, the
Scotsman relates.  A further ten redundancies were announced on
Monday, the Scotsman says.

The remaining stores at Hillington and Uddingston are open for
business and a spokesman for KPMG said customers who had placed
orders or paid deposits for furniture would be dealt with on a
case-by-case basis, the Scotsman notes.

R&M Deluxe Group is the owner of Instyle Furniture, the Scottish
sofa manufacturer and retailer.

SOPHOS LTD: Moody's Affirms 'B2' CFR; Outlook Stable
Moody's Investors Service affirmed the B2 Corporate Family Rating
("CFR") and B3 probability of default rating ("PDR") of Shield
Holdco Ltd, the parent company of Sophos Ltd. Moody's also
assigned a provisional (P)B2 rating to the senior secured bank
debt proposed to be issued by Shield Finance Co Sarl, namely a
US$20 million revolving credit facility ("RCF") maturing 2017, a
EUR75 million Term Loan A maturing 2018 and a US$320 million Term
Loan B maturing 2019 (together "the refinancing"). The outlook on
all ratings is stable.

Sophos intends to use the proceeds from the proposed debt
issuance to refinance its existing bank debt facilities which
mature between 2016 and 2017. The ratings on Sophos' existing
bank debt facilities will be withdrawn upon the successful
completion of the refinancing.

Ratings Rationale

Despite its small size compared to larger competitors including
Symantec (Baa2/stable) and McAfee (not rated) and relatively
limited product line diversification, Sophos is positioned as one
of the leading software providers for SMEs. Sophos' business
profile also benefits from positive industry trends, a large and
diversified customer base and high customer retention rates. The
rating remains constrained by the intense competition and
consolidation trend in the sector which highlights the likelihood
of debt-financed M&A activity in the future as well as potential
integration issues.

"The B2 CFR reflects Sophos' continued good free cash flow
generation in fiscal year 2011/2012 and the positive momentum of
the recently acquired Astaro business" said Sebastien Cieniewski,
Moody's lead analyst for Sophos. Moody's notes however that
during H2 2011/12 the company experienced a year-on-year decrease
in pro-forma billings and cash EBITDA reflecting the more
difficult economic and competitive environment.

The unaudited financial statements of Sophos Ltd for FY2011/12
showed approximately US$403 million in billings and US$106
million in pre-exceptional Cash EBITDA, a year-on-year increase
of 17% and 12%, respectively. On a pro-forma basis for the
acquisition of Astaro in 2011 and at actual rates, billings and
cash EBITDA growth was 5% and 1%, respectively. Sophos' billings
growth is supported by the strong performance of Astaro and its
Unified Threat Management ("UTM) offering while some of the
company's more traditional products -- Gateway and Data
Protection -- saw declines during the period. The company's cash
EBITDA margin was negatively impacted in FY2011/12 by the product
mix (Astaro has lower margins than Sophos' other products) and
Moody's expects this margin to experience further pressure in
FY2012/13 as the company increases its marketing spend in an
environment of increased competition. Moody's also observes that
renewal rates have remained at historical levels of 80-85%.

Moody's considers that Sophos has an adequate liquidity position,
supported by US$81 million of cash as of March 2012 and the new
US$20 million RCF which will be undrawn at the closing of the
refinancing. Moody's understands that following the refinancing
the company will be subject to a net debt to Cash EBITDA covenant
(set at an opening level of 5.0x). Although covenants are
intended to step down over time, Moody's considers that they will
provide the company with material financial flexibility to
conduct M&A activity. The senior facilities documentation
includes two uncommitted incremental facilities of US$100 million
each, one of them being subject to the senior secured leverage
ratio being equal or less than the secured leverage ratio on the
closing date of the refinancing.

While neutral in terms of leverage, the refinancing of the
existing debt will reduce Sophos' interest expenses as it
includes more favorable terms compared to the existing

The RCF, Term Loan A and Term Loan B have the same instrument
rating as they rank pari passu. The PDR of B3, one notch below
the B2 CFR, reflects the bank-debt-only nature of the capital
structure leading to Moody's assumption of a 65% recovery rate.

The stable outlook reflects Moody's expectations that Sophos will
continue generating firm cash flows, maintain an adequate
liquidity position and use excess cash flow proceeds to repay
debt. Positive pressure on the ratings or outlook could arise if
the Free Cash Flow to Debt ratio improves above 15% and the debt
to EBITDA ratio falls below 4.0x on a sustained basis. Downward
pressure might occur if the Free Cash Flow to Debt ratio falls
below 10% or in case of aggressive debt-funded M&A activity or if
the liquidity position deteriorates.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect Moody's preliminary
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, including any possible changes
during the syndication process, Moody's will endeavor to assign a
definitive rating to the facilities. A definitive rating may
differ from a provisional rating.

The principal methodology used in rating Shield Holdco Ltd was
the Global Software Industry Methodology published in May 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Abingdon (UK), Sophos is a leading IT provider,
specialized in security software and data protection for
businesses. The company operates in more than 150 countries but
generates more than 80% of its sales in two regions: Europe and
North America.

* UK: One in Four Food Firms at Risk of Insolvency, Study Says
Charlie Wright at The Grocer reports that a new study revealed
that a host of the UK's leading food and drinks manufacturers are
under severe financial pressure.

The Grocer relates that analysts at Company Watch put 173 of the
UK's 680 largest food and drinks makers in their 'warning area'
of companies vulnerable to insolvency or other financial

According to the report, the ratings are based on companies' most
recent published accounts and reflect concerns that many food
companies suffered from "weak balance sheets that lacked the
strength necessary to support their trading."

Company Watch singled out the likes of Premier Foods, Dairy Crest
and Britvic as being particularly at risk, the report notes.

"The accounts we examined are mainly for periods ending during
the latter part of 2010 and early 2011, which means these figures
do not yet reflect fully the upward pressure on manufacturers
costs from rising energy and commodity prices," the Grocer quotes
Nick Hood of Company Watch as saying.

"Once these factors feed through, we can expect the financial
health of the sector to deteriorate further, with more
manufacturing companies falling into our warning area and
becoming vulnerable to insolvency or restructuring."


CREDIT-STANDARD: Moody's Downgrades Deposit Ratings to 'B3'
Moody's Investors Service has downgraded Credit-Standard Bank's
long-term local and foreign-currency deposit ratings to B3 along
with a negative outlook, from B2. Concurrently, Moody's has
changed the outlook on Credit-Standard Bank's E+ standalone bank
financial strength rating (BFSR) to negative from stable. The
standalone BFSR now maps to b3 on the long-term scale (b2

Moody's rating action is largely based on Credit-Standard Bank's
financial statements for 2011 and 1Q 2012 prepared under Uzbeck
GAAP, as well as the bank's non-public management reports for
that period.

Ratings Rationale

Moody's says that the rating action was triggered by the
temporary freeze of Credit-Standard Bank's license for banking
operations in foreign currency (FX license) by the Central Bank
of Uzbekistan in 1Q 2012. Credit-Standard Bank has retained a
general banking license, therefore it has continued to provide a
range of services to its clients -- albeit to a lesser degree.
The temporary suspension of Credit-Standard Bank's FX license led
to over 70% outflow of customer funds from the bank,
deterioration of its market franchise as well as a decline in
recurring revenues.

In 1Q 2012, Credit-Standard Bank faced a severe deposit outflow
and lost over UZS74 billion (US$40 million) of 'customer funds,
and almost all of its USZ10 billion (US$5.7 million) interbank
funding. Moody's observes that the bank's historically
conservative liquidity management enables it to withstand deposit
outflow without access to external liquidity support -- as of 1
January 2012 customer deposits were over 110% covered by liquid
assets (65% of total assets as of that date).

However, the aforementioned 70% deposit outflow and decline in
total assets led to significant shrinkage of Credit-Standard
Bank's market position. Moody's estimates that the bank's share
of total banking assets and customer deposits declined to less
than 0.3% as at 1 April 2012 from close to 1% as at 1 January
2012. Moreover, a decline in interest-bearing liquid assets and
lower fees generated from settlement services caused a
significant decline in the bank's recurring revenues --
annualized interest income declined by 20% in 1Q 2012, while fee
and commission income decreased by more than 50% compared to
2011. As Credit-Standard Bank was not able to adjust operating
expenses respectively, it was close to break-even point in 1Q
2012 compared to over 3% return on average asset at year-end

The negative outlook on all Credit-Standard Bank's ratings
reflects Moody's concerns over the bank's ability to recover its
franchise and profitability. Although Credit-Standard Bank is
seeking to re-activate its FX license, its success is uncertain,
and the bank has not yet updated its strategy in the event of it
operating solely under a general banking license.

Principal Methodologies

The methodologies used in these ratings were "Bank Financial
Strength Ratings: Global Methodology", published in February
2007; "Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: Global Methodology" published in March 2012.

Headquartered in Tashkent, Uzbekistan, Credit-Standard Bank had
total assets of UZS80 million (US$43 million) as at March 31,
2012, and reported net income of UZS25 million (US$13,000) in the
three months ended March 31, 2012, according to the bank's non-
audited statutory reports under Uzbek GAAP.


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

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  Go to 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
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written permission of the publishers.

Information contained herein is obtained from sources believed to
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