TCREUR_Public/120503.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

             Thursday, May 3, 2012, Vol. 13, No. 88



BTC: Creditors May Put Business for Sale Again


PRAKTIKER AG: Mulls Closure of Nine Stores This Year
Q-CELLS SE: Sale or Controlled Insolvency Among Options


TREASURY HOLDINGS: Legal Proceedings Against NAMA Begins


FONDAZIONE MONTE: Standstill Agreement Deadline Postponed


UAB BITE: Fitch Affirms 'B-' Issuer Default Rating


CARLSON WAGONLIT: S&P Assigns 'B+' Rating to US$850MM Sr. Notes


SONGA OFFSHORE: Moody's Affirms 'B2' CFR; Outlook Stable


GAZPROMBANK: S&P Rates Subordinated Series 4 Notes 'BB-'


MAPFRE SA: S&P Lowers Subordinated Debt Rating to 'BB+'
* SPAIN: S&P Takes Negative Rating Actions on 16 Banks


* TURKEY: S&P Affirms 'BB/B' Long-Term Sovereign Credit Ratings

U N I T E D   K I N G D O M

ARGOS: Hires Consultants to Conduct Radical Overhaul
DEWEY & LEBOEUF: Prepares to Liquidate U.K. Office
* UK: Moody's Says RMBS Master Trusts Exposed to Extension Risk
* UK: Moody's Says Olympics Give Short-Term Boost to Corporates

* Upcoming Meetings, Conferences and Seminars



BTC: Creditors May Put Business for Sale Again
---------------------------------------------- reports that the creditors of Bulgaria's incumbent
telco BTC, which operates under the brand name Vivacom, may be
expected to put the company up for sale again in one or two
years' time.

According to, Capital Daily, citing insiders,
reported that "The collapse of talks for BTC sale means lenders
will have to seek restructuring options for the debt-laden
company and manage it themselves."

Capital Daily noted that the planned sale of Bulgaria's incumbent
telco BTC failed after its creditors rejected the offers of all
three bidders, including Turkcell, the biggest Turkish mobile-
phone company, relates.

The restructuring talks will aim at securing better terms and
reducing the debt, which is burdening BTC, its parent company NEF
Telecom Bulgaria and the holding company that owns NEF Telecom, discloses.

Capital Daily disclosed that some of the subordinated non-
performing loans may be transformed into equity capital, others
restructured or even written down, according to

The insiders said that if the debt is reduced, in one or two
years the company will be more likely to attract a quality
investor and higher bids, notes.

The mezzanine subordinated non-performing loans total EUR400
million, discloses.  The mezzanine lenders include
French financial group AXA, Austrian investor Mezzanine
Management, US Tennenbaum Capital Partners, Darby Overseas
Investments, Deutsche Bank and Royal Bank of Scotland, states.

The creditors hired Morgan Stanley in London last year to help
sell the company, after it breached the terms on the loan, recounts.


PRAKTIKER AG: Mulls Closure of Nine Stores This Year
Julie Cruz at Bloomberg News reports that Praktiker AG will close
at least nine stores in Germany this year.

According to Bloomberg, Harald Guenter, a spokesman for the
company, said by phone on Wednesday that Praktiker already closed
its first store in Krefeld and will close six more stores in
Germany in the second half of the year.

The spokesman, as cited by Bloomberg, said that Praktiker will
also shut down two stores of its Extra Bau + Hobby brand this
year, one in May, and one in October.

The retailer announced a EUR300 million (US$394 million)
financing program in November as part of a reorganization that
includes eliminating unprofitable outlets and cutting 1,400 jobs,
Bloomberg relates.

Based in Kirkel, Praktiker AG is Germany's third largest home-
improvement retailer.

Q-CELLS SE: Sale or Controlled Insolvency Among Options
Stefan Nicola at Bloomberg News reports that Q-Cells SE said
Henning Schorisch, an insolvency administrator, may be sold or
restructured in a controlled insolvency as talks with investors
over the company begin.

According to Bloomberg, Mr. Schorisch said on Wednesday at Q-
Cells headquarters in Bitterfeld-Wolfen that talks with creditors
about a possible debt-to-equity conversion as well as finding an
investor for the Solibro thin-film unit, which isn't affected by
the insolvency, are continuing.

"All options remain on the table, and that's positive," Bloomberg
quotes Mr. Schorisch as saying.  Mr. Schorisch, as cited by
Bloomberg, said he's "cautiously optimistic" that the company,
which employs about 1,300 in Saxony-Anhalt and Berlin, can be
restructured without significant job losses because it's a
"technology leader."

Mr. Schorisch, a lawyer at HWW Wienberg Wilhelm, was named by a
local court as preliminary insolvency administrator until formal
insolvency proceedings are opened and a permanent administrator
is named, Bloomberg recounts.

Q-Cells, which has about EUR150 million (US$197 million) in
liquid assets, is back to producing cells 24 hours a day, seven
days a week, Bloomberg discloses.  Mr. Schorisch, as cited by
Bloomberg, said that it's planning for an internal interim
progress report on mergers and acquisitions by the middle of the
month after several interested parties contacted the insolvency
administrator.  He said that there have been no layoffs yet,
Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on April 9,
2012, the Executive Board of Q-Cells filed a request to open
insolvency proceedings at the competent District Court in Dessau.

Q-Cells SE is a German solar cell and module maker.


TREASURY HOLDINGS: Legal Proceedings Against NAMA Begins
Ciaran Hancock at The Irish Times reports that Treasury Holdings
has begun legal proceedings against the National Asset Management

Treasury Holdings, the Irish Times says, is seeking substantial
compensation and is contesting the constitutionality of the
legislation governing its activities.

It is understood that Treasury, which is jointly controlled by
businessmen Richard Barrett and Johnny Ronan, has made an
application to the High Court on both matters, the Irish Times

This relates to NAMA's decision in January to appoint joint
receivers to certain assets secured against loans of more than
EUR1 billion owed to the agency, the Irish Times states.

Treasury Holdings was in breach of the covenants on the
borrowings and deemed insolvent when NAMA called in the loans,
the Irish Times recounts.

In March, Treasury Holdings won leave to pursue a judicial review
of NAMA's actions, the Irish Times recounts.

The developer is now preparing to pursue two additional cases
relating to NAMA's decision, the Irish Times discloses.

One will focus on the detrimental financial consequences for
Treasury of NAMA's decision to call in its loans in January, the
Irish Times states.  The damages sought have not been quantified,
the Irish Times says.

The other is being taken against the State and the Attorney
General and will test the constitutionality of the NAMA Act 2009
and of the way in which NAMA used its powers when moving against
Treasury, the Irish Times notes.

According to the Irish Times, the damages claim will focus on a
number of issues relating to NAMA's decision to appoint joint
receivers -- PwC and Ernst Young -- to some of Treasury's assets
earlier this year.

Treasury Holdings is an Irish property developer.  The company
owns the Westin Hotel in Dublin and the Irish headquarters of
accounting firm PricewaterhouseCoopers.


FONDAZIONE MONTE: Standstill Agreement Deadline Postponed
Dow Jones Newswires reports that Fondazione Monte dei Paschi di
Siena, the Italian banking foundation that controls Banca Monte
dei Paschi di Siena SpA, said Wednesday it has agreed with its
lenders to postpone the deadline to reach an agreement to bring
down its debt through May.

According to Dow Jones, in a statement, Fondazione Monte dei
Paschi di Siena said the negotiations are at "very advanced"
levels and the only the "last details" are needed for its debt

The previous standstill agreement with the creditors expired
Monday, Dow Jones relates.

The foundation has also started selling part of its controlling
stake in the bank to raise capital, Dow Jones discloses.


UAB BITE: Fitch Affirms 'B-' Issuer Default Rating
Fitch Ratings has affirmed UAB Bite Lietuva's Long-term Issuer
Default Rating (IDR) at 'B-'.  The Outlook on the Long-term IDR
is Stable.  The agency has also affirmed SIA EECF Bella Finco's
senior secured revolving credit facility (RCF) at 'B'.

The Recovery Rating of the facility is 'RR3'.  The senior secured
notes due 2014 issued by Bite Finance International BV have been
affirmed at 'B-'.  The Recovery Rating for the notes is 'RR4'.
Bite's ratings are supported by the continued cash flow
generation improvements in its Latvian operations and the
relatively stable underlying performance, excluding regulatory
cuts, in its Lithuanian operations.  LTM EBITDA in Latvia grew to
EUR3.8 million in Q112, from -EUR1.9 million in Q111 and -EUR10.2
million in Q110.  The company continues to add high numbers of
postpaid subscribers in Latvia, which gives Fitch comfort that
the company will not return to generating negative EBITDA in the

Although mobile service revenue continues to decline in
Lithuania, this is largely attributed to regulatory cuts, which
should begin to ease after 2012.  While these revenue declines
are causing overall EBITDA to decline in Lithuania, the growth in
Latvia is more than compensating for the Lithuanian decline.
Overall group EBITDA has grown to EUR44.7 million in Q112 from
EUR39.2 million in Q111 and EUR36 million in Q110.

The growth in EBITDA has helped the company to continually
improve its leverage, with net debt: EBITDA standing at 4.2x in
Q112, from 5.1x in Q111 and 5.9x in Q110.  Fitch believes this
trend will continue to improve, although a potential LTE network
rollout at some point over the next few years could impact free
cash flow generation and slow further leverage improvements.

Bite competes with two much larger, international operators.  If
either of these competitors were to engage in disruptive market
practices, Bite might not have the financial flexibility to match
such moves. This size differential constrains the rating to a
certain extent.

Fitch would consider a negative rating action if the company
returns to a negative FCF generating position, although temporary
spikes related to capex would be tolerated.  A negative rating
action could also occur if FFO adjusted net leverage approaches
5.5x or if the company does not make headway into refinancing its
2014 bond maturity.

Conversely, the refinancing of the 2014 maturity could allow for
positive rating action to be taken at some point in the future.
As well as the refinancing, further improvements in the Latvian
operations together with stable Lithuanian operating trends would
be required before a positive rating action is envisaged.  If
Latvian margins begin to approach 20% and Fitch believes that the
operations in the country are firmly established, then a positive
rating action could be taken.


CARLSON WAGONLIT: S&P Assigns 'B+' Rating to US$850MM Sr. Notes
Standard & Poor's Ratings Services assigned its 'B+' issue rating
to the proposed US$850 million dual-currency senior secured notes
due 2019 to be issued by Netherlands-based business travel
management company Carlson Wagonlit B.V. (CWT; B+/Stable/--).

A proportion of the proposed notes will be issued in dollars, and
a proportion in euros. The issue rating is in line with the
corporate credit rating on CWT.

"We also assigned a recovery rating of '4' to the proposed notes,
indicating our expectation of average (30%-50%) recovery
prospects for creditors in the event of a payment default," S&P

"The company will use the proceeds of the proposed notes and a
new, unrated super senior US$100 million secured revolving credit
facility (RCF) due 2018 to repay its existing EUR285 million
senior floating-rate notes and US$493 million senior secured
facilities. The company expects to establish the new RCF and
cancel an existing US$161 million RCF at the same time that it
closes the proposed notes' offering. We will withdraw the issue
ratings on the debt instruments to be repaid on their repayment,"
S&P said.

                       RECOVERY ANALYSIS

"The recovery rating on the proposed notes is supported by our
valuation of CWT as a going concern, underpinned by its leading
market positions and sizable customer base," S&P said. The
proposed notes will benefit from:

  * Guarantees and 65% share pledges of certain holding
    companies; Security over all the shares and assets of CWT's
    material U.S. subsidiaries; and

  * A 100% share pledge of the immediate parent company of CWT.

"This collateral will also secure the new RCF on a super senior
basis. The proposed notes will receive guarantees from CWT's U.S.
entities, representing 36.1% of its revenues and 38.9% of its
EBITDA in 2011. The proposed notes will not benefit from
guarantees or security from the non-U.S. entities, however," S&P

"The recovery rating on the proposed notes is constrained by the
new dual-tranche US$100 million RCF, which will rank ahead of the
proposed notes on the payment of proceeds in the case of
enforcement, according to the intercreditor agreement. The
refinancing of previous subordinated debt with the new senior
secured notes also contributes to the dilution of the overall
recovery prospects. The recovery rating on the proposed notes is
also constrained by CWT's exposure to various insolvency regimes,
which could delay insolvency proceedings in the event of a
default and therefore prove expensive," S&P said.

"We also note that the documentation for the proposed notes
allows for credit facilities of up to US$125 million (including
the new RCF); an incremental US$125 million of debt under a
general basket; and further debt providing that the company
complies with the proposed notes' incurrence covenants. However,
there are limits to the amount of debt that the company can incur
through nonguarantor subsidiaries to avoid excessive structural
subordination of the proposed notes. The documentation also
allows, among other things, for an unlimited amount of
securitization, although the company currently has no plans to
establish such a program. If CWT were to incur significant
additional debt under these conditions, the recovery prospects
for the proposed notes could be materially diluted," S&P said.

"To estimate recoveries for the proposed notes, we simulate a
default scenario. We assume that a default is caused by lower
revenues as a consequence of weak economic conditions compounded
by travel disruptions. We simulate a hypothetical payment default
in 2015, at which point we estimate CWT's stressed enterprise
value at approximately US$620 million," S&P said.

"We also assume that the prospective super senior RCF would be
drawn at the point of default. We calculate a residual value of
US$399 million, assuming full drawings on the RCF and prepetition
interest--together totaling about US$104 million--and deducting
US$117 million of priority liabilities, which include enforcement
costs and 50% of the company's 2011 pension deficit. This
residual value would be sufficient, in our view, for average
(30%-50%) recovery for holders of the proposed US$850 million
senior secured notes," S&P said.

New Ratings

Carlson Wagonlit B.V.
Senior Secured Debt
  US$850 mil. equivalent notes            B+
   Recovery Rating                        4


SONGA OFFSHORE: Moody's Affirms 'B2' CFR; Outlook Stable
Moody's Investors Service has affirmed the B2 Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) of Songa
Offshore SE. The outlook on the ratings is revised to stable from

Ratings Rationale

The rating action follows the company's recent NOK633 million
equity issuance and credit facility amendments, including a
deferral of US$106 million of loan installments for four
quarters. In Moody's view, these actions have eased Songa's near-
term liquidity risk at a time when it has a large capital
expenditure program for its existing fleet and a US$48 million
bond maturing in June 2012. Moody's had previously indicated that
the outlook would likely be stabilized if sufficient financing
was in place to meet all immediate liquidity needs, with adequate
headroom under the bank covenants.

Songa needed new financing because of operational issues with its
rigs in Malaysia and vessel upgrades this year in relation to its
three existing rigs in Norway's North Sea, the Dee, Trym and
Delta, which all have contracts with Statoil ASA (Aa2 stable)
extending to at least 2015. However, to enhance their
capabilities and to meet the required specifications (and in
doing so increasing their useful life) Songa needs to spend
around US$225 million on the rigs, with approximately half of
that funded by Statoil. The proceeds from the equity issuance
will be used to partly finance the difference.

In addition, Songa needs funding to build four new, so called
Cat-D drilling rigs, which are high-specification,
semisubmersible rigs for use in a midwater (up to 3,000 feet)
harsh environment in the Norwegian North Sea.

The B2 CFR reflects the company's high adjusted leverage, as well
as the company's exposure to oil industry cyclicality and small
asset base with only six rigs and low diversification. The stable
outlook nevertheless reflects Moody's view that the recent
financing has removed near-term liquidity risks, supported by the
company's contract backlog and a positive operating environment

Songa currently operates only six drilling rigs, including the
Eclipse in Angola, but over the past year won significant eight-
year drilling contracts from Statoil that require the Cat-D rigs.
Last year, Songa arranged the two initial construction payments
of US$113 million each on the first two rigs through a
combination of bank loans and NOK1.4 billion (around US$244
million) five-year bond issuance and in February, Statoil agreed
to provide financing for the two initial payments of US$113
million each on the other two rigs as part of its two eight-year
contract awards. Overall, Songa benefits from a strong and
supportive relationship with Statoil, evident in the number of
three-year and eight-year contracts it has won.

The drilling market environment has improved over the last 18
months, with dayrates rising in most geographies. However,
Songa's liquidity has been stressed by operational issues in its
fleet of rigs during the fourth quarter last year. In Malaysia,
the Venus experienced 50 days downtime owing to required repairs
on subsea equipment and the Mercur had more extensive testing
than expected as it is also contracted by Petroliam Nasional
Berhad (PETRONAS, A1 stable). Additionally, delays in finalizing
acceptance testing of Songa's new rig, the Eclipse, by Total S.A.
(Aa1 stable) before it started operations also resulted in cash
flow since the third quarter of 2011 that was below Moody's

Moody's expects Songa's debt/EBITDA to remain high for its rating
at around 5.0x at the end of this year because of the recent
operational setbacks and upfront payments for the two additional
rigs. However, this is mitigated by the combination of a larger
contract backlog of over US$7.1 billion and increasing benefits
from the relationship with Statoil. Additionally, Moody's expects
leverage to fall to about 4.0x in 2013 as it benefits from higher
utilization of the Eclipse and the rigs in the North Sea.
Although Moody's notes Songa has a history of unpredictability
with regards to announcing construction of new rigs.

At this time, Moody's believes that the company's liquidity
remains satisfactory over at least a 12 month horizon, factoring
in the existing cash balance, the Revolving Credit Facilities
(RCF) and negligible near-term debt maturities. Nevertheless,
Moody's expects the company to be free cash flow negative until
2013 because of high capital expenditure and initial payments for
new rigs, financing of which has already been agreed with

Given the high leverage, a positive rating action is not expected
in the short term. However, it is possible if Songa reduces
debt/EBITDA to below 3.0x on a sustained basis. Negative pressure
on the rating would likely result if debt/EBITDA remains above
4.5x through 2013, or if there is a lack of improvement in fleet
utilization or a failure to contract vessels at suitably high

The principal methodology used in rating Songa Offshore SE was
the Global Oilfield Services Rating Methodology published in
December 2009.

Songa, established in Norway in 2005 and listed on the Norwegian
stock exchange with a market capitalization of approximately
NOK3 billion, has grown rapidly through both acquisitions and
some re-commissioning of second-hand floaters and currently has a
fleet of six semisubmersibles, with four under construction. For
the 12 months ending December 2011, it reported revenue of about
US$500 million.


GAZPROMBANK: S&P Rates Subordinated Series 4 Notes 'BB-'
Standard & Poor's Ratings Services assigned its 'BB-' issue
rating to the subordinated Series 4 notes to be issued by
Gazprombank (BB+/Stable/B; Russia national scale 'ruAA+') via GPB
Eurobond Finance PLC.

"The bond placement totals US$500 million and will form part of
Gazprombank's loan participation note program, equivalent to
US$10 billion. The subordinated Series 4 notes have a seven-year
maturity and a fixed 7.25% interest rate to be paid semi-
annually. The proceeds of the bond issue will be used to provide
a subordinated loan to Gazprombank, and repayment of bonds is
linked to the repayment of the corresponding subordinated loan.
The described transaction structure is subject to approval from
the Central Bank of the Russian Federation (CBR) with regards to
the structure of the subordinated loan agreement in line with the
CBR's Regulation 215-P," S&P said.

"The bond is rated two notches below the long-term counterparty
credit rating on Gazprombank. This accounts for the structural
subordinated nature of the loan that GPB Eurobond Finance PLC
will provide to Gazprombank from the proceeds of the Series 4
bond issue, and that repayment of the Series 4 bond issue is
linked to repayment of the corresponding subordinated loan, in
accordance with the Standard & Poor's methodology on rating bank
hybrid capital instruments," S&P said.

"Standard & Poor's bases its ratings on Gazprombank on its 'bb'
anchor for a commercial bank operating only in Russia and the
bank's adequate business position, moderate capital and earnings,
moderate risk position, and average funding and adequate
liquidity, as our criteria define these terms. The long-term
rating incorporates two notches of support above its stand-alone
credit profile (SACP), reflecting Gazprombank's status as a
government-related entity. The SACP is 'bb-'," S&P said.

"The stable outlook reflects our expectation that Gazprombank's
main rating factors will remain unchanged over the next 12
months. We expect Gazprombank's asset quality to remain better
than the system average, capital to increase in proportion to
risk assets, and earnings to improve, thanks to increasing
commercial banking revenues and decreasing dependence on volatile
gains from investments," S&P said.

"We could take a positive rating action if Gazprombank improved
its risk-adjusted capital ratio before diversification to above
10%. Sales of noncore assets and a substantial shift in revenues
toward recurring commercial banking business would also be
positive rating factors. We could also raise the ratings on
Gazprombank if, in our opinion, the bank's link with the Russian
government strengthened," S&P said.

"We would consider lowering the ratings on Gazprombank if its
current capital adequacy and asset quality weakened. Other
potentially negative developments would be a weakening in the
bank's risk profile and an increase in its appetite for market
risk. We could also lower the rating if we considered that the
bank's role or link with the government had become less
important, leading to lower expected support from the Russian
government," S&P said.


MAPFRE SA: S&P Lowers Subordinated Debt Rating to 'BB+'
Standard & Poor's Ratings Services lowered to 'A-' from 'A' the
long-term counterparty credit and insurer financial strength
ratings on the two operating entities that S&P regards as core to
Spain-based Mapfre insurance group: Mapfre Global Risks, Compania
Internacional de Seguros y Reaseguros S.A., and Mapfre Re
Compa¤ˇa de Reaseguros S.A.

"At the same time, we lowered the long-term counterparty credit
rating on the group's holding company, Mapfre S.A., to 'BBB' from
'BBB+'. We also lowered our long-term issue ratings on the
subordinated debt of Mapfre S.A. to 'BB+' from 'BBB-'. The
outlook on the ratings on Mapfre S.A. and the core operating
entities is negative," S&P said.

"We regard Mapfre's U.S. operations--Commerce Insurance Co. and
Citation Insurance Co. and their intermediate holding company,
Mapfre USA Corp.--as strategically important. Commerce and
Citation have stand-alone credit profiles of 'a-', and we have
affirmed the 'A-' long-term counterparty credit and insurer
financial strength ratings on these entities. We have also
affirmed our 'BBB' long-term counterparty credit rating on Mapfre
USA. We have revised to negative our outlook on all three U.S.
entities," S&P said.

"The rating actions on the various Mapfre Group entities follow
our lowering of the long- and short-term ratings on the Kingdom
of Spain (BBB+/Negative/A-2)," S&P said.

"Under our criteria, our view of country risk generally
constrains our ratings on an insurer. Following the sovereign
rating action, Mapfre Group's country risk has, in our view,
increased. Over 40% of the EUR19.6 billion business written by
the group is in its domestic market and over 50% of its EUR38.0
billion reported invested assets are invested there," S&P said.

"However, we estimate that Mapfre's exposure, in terms of
revenues and assets, to the U.S., Brazil, and other countries
with sovereign local currency ratings of 'A-' or higher is close
to 40%. We estimate a further 35% of the Mapfre group's
policyholder liabilities are held by entities domiciled outside
Spain," S&P said.

"Accordingly, although we continue to assess Mapfre group's
exposure to Spanish country risk as high, under our criteria, we
allow a one-notch rating differential between the ratings on
Mapfre and the Spanish sovereign ratings. This is based on the
current rating level of Spain, current Mapfre's geographic
diversification in countries rated higher than Spain, and the
sensitivity of the insurance sector to country risk, which we
regard as high," S&P said.

"The ratings on the Mapfre Group's core operating entities
reflect the group's leading competitive position in Spain and
Latin America, its strong operating performance, and its strong
capitalization, the last of which has not been much affected by
the sovereign downgrade. The ratings also reflect our view that
the Mapfre Group's management track record is a positive factor
for the ratings," S&P said.

These factors are partially offset by the difficult economic and
financial climate in Spain.

"The negative outlook reflects that on our long-term rating on
Spain and our view that Mapfre's country risk could weaken
further if we were to lower the sovereign rating further," S&P

"We could lower the ratings on Mapfre's core operating
subsidiaries if we were to lower the ratings on Spain or if there
were a significant weakening in Mapfre's business risk and
financial risk profile. Conversely, we would most likely revise
the outlook to stable if the outlook on the Kingdom of Spain
were to be revised to stable. We currently regard positive rating
action as unlikely," S&P said.

* SPAIN: S&P Takes Negative Rating Actions on 16 Banks
Standard & Poor's Ratings Services has taken these rating actions
on 16 Spanish banks:

  * "We lowered our long- and short-term counterparty credit
    ratings on Banco Santander S.A. (Santander) and its core
    subsidiary Banco Espa¤ol de Credito S.A. (Banesto) to 'A-/A-
    2' from 'A+/A-1'. We lowered our ratings on Santander's
    senior debt to 'A-' from 'A+'. We lowered our ratings on its
    non-deferrable subordinated debt and Tier 1 hybrid notes by
    one notch and placed them on CreditWatch with negative
    implications. We also lowered the long- and short-term
    ratings on its highly strategic subsidiary Santander Consumer
    Finance, S.A. (SCF) to 'BBB+/A-2' from 'A/A-1'. We affirmed
    the long- and short-term ratings on highly strategic
    subsidiary Banco Santander Totta S.A. at 'BB/B'. The outlooks
    on the long-term ratings on Santander and the abovementioned
    core and highly strategic subsidiaries are negative," S&P

  * "We lowered our long- and short-term counterparty credit
    ratings on Banco Bilbao Vizcaya Argentaria S.A. (BBVA) to
    'BBB+/A-2' from 'A/A-1'. The outlook is negative. We lowered
    our ratings on BBVA's senior debt to 'BBB+' from 'A'. We
    lowered our ratings on its non-deferrable subordinated debt
    and Tier 1 hybrid notes by one notch (see Ratings List) and
    placed them on CreditWatch with negative implications. The
    outlook on the long-term rating on BBVA is negative," S&P

  * "We lowered our long- and short-term counterparty credit
    ratings on Banco de Sabadell S.A. (Sabadell) to 'BB+/B' from
    'BBB-/A-3'. The long-term rating remains on CreditWatch with
    negative implications, where we placed it on Dec. 8, 2011,"
    S&P said.

  * "We lowered our long- and short-term counterparty credit
    ratings on Ibercaja Banco S.A. (Ibercaja) to 'BBB-/A-3' from
    'BBB/A-2'. Both the long- and short-term ratings remain on
    CreditWatch with negative implications, where we placed them
    on March 5, 2012," S&P said.

  * "We lowered our long- and short-term counterparty credit
    ratings on Kutxabank S.A. (Kutxabank) to 'BBB-/A-3' from
    'BBB/A-2' and placed them on CreditWatch with negative
    implications," S&P said.

  * "We lowered our long- and short-term counterparty credit
    ratings on Banca Civica S.A. (Civica) to 'BB+/B' from
    'BBB-/A- 3'. The ratings remain on CreditWatch with positive
    implications, where we placed them on March 30, 2012," S&P

  * "We lowered our long- and short-term counterparty credit
    ratings on Bankinter S.A. (Bankinter) to 'BBB-/A-3' from
    'BBB/A-2' and placed them on CreditWatch with negative
    implications," S&P said.

  * "We lowered our long- and short-term counterparty credit
    ratings on Confederacion Espanola de Cajas de Ahorros (CECA)
    to 'BBB-/A-3' from 'BBB/A-2' and placed them on CreditWatch
    with negative implications," S&P said.

  * "We lowered our long- and short-term counterparty credit
    rating on Barclays Bank S.A. (BBSA) to 'BBB+/A-2' from 'A/A-
    1'. The outlook is negative," S&P said.

  * "We placed on CreditWatch with negative implications our
    'BBB+/A-2' long- and short-term counterparty credit ratings
    on CaixaBank S.A. (Caixabank) and our 'BBB-/A-3' on its
    parent, Caja de Ahorros y Pensiones de Barcelona (la Caixa).
    We also placed on CreditWatch with negative implications all
    debt ratings not placed on CreditWatch with negative
    implications on March 30, 2012," S&P said.

  * "We placed on CreditWatch with negative implications our
    'BBB-/A-3' long- and short-term counterparty credit ratings
    on Bankia S.A. (Bankia) and our 'BB-' long-term rating on its
    parent company Banco Financiero y de Ahorros S.A. (BFA). We
    affirmed the 'B' short-term rating on BFA," S&P said.

  * "We are keeping our 'BBB-/A-3' long- and short-term
    counterparty credit ratings on Banco Popular Espa¤ol S.A.
    (Popular) on CreditWatch with negative implications, where we
    placed them on Oct. 11, 2011," S&P said.

"The rating actions follow our downgrade on April 26, 2012, of
the Kingdom of Spain," S&P said.

"The sovereign downgrade has direct negative rating implications
for the banks that we rate at or above the sovereign rating on
Spain, and on most banks whose ratings incorporate uplift over
their stand-alone credit profiles (SACP) to reflect Spanish
government support," S&P said.

Therefore, the lowering of the long- and short-term sovereign
credit ratings on the Kingdom of Spain has led to follow-on
rating actions on:

  * "Santander and some of its core and highly strategic
    subsidiaries, which we rate one notch above the sovereign,
    and BBVA, and BBSA, which we rate at the same level as the
    long-term sovereign rating on Spain. We seldom rate financial
    institutions above the foreign currency rating on the country
    where the institution is domiciled and, in these occasions,
    the maximum notching differential according to our criteria
    is limited to one notch unless the sovereign rating is 'B-'
    or lower, reflecting our view of the interconnection between
    a banking system and the related sovereign," S&P said.

  * "Sabadell, CECA, Ibercaja, Cˇvica, Bankinter, and kutxabank,
    which are six of the eight banks whose ratings include uplift
    over their SACPs. Following the sovereign rating action on
    Spain, we have removed entirely or reduced the number of
    notches of uplift incorporated into the ratings on these
    banks because of the combination of the lowering of the long-
    term rating on Spain to 'BBB+' and our current assessments of
    these banks' SACPs, in accordance with our criteria.
    Following the actions on the banks and in accordance with our
    criteria, we factor uplift into the ratings to reflect
    Spanish government support on only four banks -- Bankia, and
    indirectly its parent company BFA, Banco Popular, and Banco
    Sabadell," S&P said.

  * "CaixaBank, and its parent company, la Caixa, where we
    anticipated the ratings would likely benefit from one notch
    of government support if we were to lower our assessment of
    CaixaBank's SACP on completion of its acquisition of Civica,"
    S&P said.

"In addition, the factors behind the lowering of the long- and
short-term sovereign ratings on Spain could have an impact on our
view of the economic risk and industry risk affecting the Spanish
banking system, and on our opinion of the specific rating factors
(business position, capital & earnings, risk position, and
funding & liquidity) driving our assessments of these banks'
SACPs. Consequently, we have placed on CreditWatch negative most
of our issuer and issue ratings on Spanish banks that were not
already on CreditWatch. At the same time, we have expanded our
rationale for the already existing CreditWatch placements on
Cˇvica, Ibercaja, Popular, and Sabadell, which are currently
involved in mergers. The CreditWatch status for these banks now
also includes the potential impact of our possible revision of
economic risk and industry risk factors affecting the banking
system," S&P said.

"We did not place the counterparty credit and senior debt ratings
on Santander and its subsidiaries mentioned above and on BBVA on
CreditWatch with negative implications because we do not expect
to lower those ratings even if we were to lower our assessments
of their SACPs. However, there is a potential for these banks'
SACPs to be lowered, which would likely have a negative impact on
the ratings on their non-deferrable subordinated debt and hybrid
securities. Consequently, we placed the ratings on the non-
deferrable subordinated debt and hybrid securities on CreditWatch
negative," S&P said.

"We have not placed the ratings on BBSA on CreditWatch negative
because we do not expect our ratings on BBSA to be affected by
our review of the impact of the sovereign downgrade on the
economic and industry risks of the Spanish banking system. As a
highly strategic subsidiary of U.K.-based Barclays Bank PLC
(A+/Stable/A-1), the long-term rating on BBSA is derived from
notching down one notch from the ratings on its parent. Under our
criteria, we also cap the ratings at a level equal to that of the
long-term rating on Spain. Consequently, the ratings on BBSA
remain at the same level as those on Spain," S&P said.


* TURKEY: S&P Affirms 'BB/B' Long-Term Sovereign Credit Ratings
Standard & Poor's Ratings Services revised the outlook on
Turkey's long-term foreign and local currency sovereign credit
ratings to stable, from positive. "At the same time, we affirmed
our 'BB/B' foreign currency and 'BBB-/A-3' local currency long-
and short-term sovereign credit ratings on Turkey. We also
affirmed the Turkey long- and short-term national scale ratings
at 'trAA+/trA-1'. The '3' recovery rating and 'BBB-' transfer and
convertibility (T&C) assessment remain unchanged," S&P said.

"Less-buoyant external demand and worsening terms of trade (the
price of exports compared to imports) have, in our view, made
economic rebalancing more difficult, and have increased the risks
to Turkey's creditworthiness given its high external debt and the
state budget's reliance on indirect tax revenues. We have revised
the outlook on Turkey's long-term sovereign credit ratings to
stable from positive, reflecting our view that the ratings are
likely to remain at the current level during the next 12 months,"
S&P said.

Under S&P's sovereign ratings criteria, the key constraints on
Turkey's ratings are:

  * Its external vulnerability as measured by high net external
    debt and gross external financing needs relative to its
    capacity to generate foreign currency (measured by current
    account receipts [CARs]).

  * "Modest income levels. We estimate Turkey's GDP per capita at
    US$9,840 at end-2011, which is below the majority of its
    trading partners but compares well with similarly rated
    sovereigns. This reflects modest levels of absolute
    productivity, as well as low labor participation rates,
    especially among women," S&P said.

  * "Risks related to the 2010-2011 credit boom. Turkey's real
    GDP growth of more than 8% annually over the past two years
    was mostly driven by rapid domestic credit expansion,
    financed mainly by short-term external funding to banks.
    Domestic demand, particularly via import-intensive private
    consumption and investment in nontradable sectors, mainly
    contributed to this rapid GDP growth," S&P said.

"As a result of the above factors, Turkey's current account
deficit (CAD) exceeded 40% of CARs in 2011 (about 10% of GDP) and
the financial sector's net external debt rose to 40% of CARs at
end-2011, versus 7% at end-2009. We estimate that Turkey's gross
external financing needs (current account balance plus short-term
external debt by residual maturity) will reach 142% of CARs plus
usable reserves in 2012, one of the highest ratios for a rated
sovereign. This heavy reliance on external savings exposes Turkey
to shocks, either domestic -- for example if recent high domestic
credit growth were to result in future bad loans -- or external,
say if rising risk aversion were to deter foreign investors and
banks and result in a net outflow of foreign capital. Such
external shocks could lead to a rapid depreciation of the Turkish
lira, with a significant pass-through to inflation. In turn this
could increase domestic interest rates and have a potential
negative secondary effect on government borrowing costs. In
addition, we note that Turkish banks obtained about US$14.8
billion (8% of CARs) of foreign currency funding through
repurchase agreements of local currency securities with foreign
banks at end-2011; this exposes banks to margin calls should bond
prices fall or the Turkish lira depreciate," S&P said.

"Our ratings on Turkey are supported by our view of its generally
effective policymaking and institutions, its moderate and
declining public debt burden, and its monetary policy
flexibility. In our view, a floating exchange rate regime can
work as a channel of nominal adjustment for economies like Turkey
that are exposed to potentially volatile capital inflows. As the
Turkish lira has weakened since the second half of 2011, we
expect domestic demand for imports to moderate and Turkish
exports to become more competitive. However, we believe the
competitiveness gain from weaker exchange rates will probably be
partly offset by wage inflation through indexation. During
fourth-quarter 2011, credit growth decelerated as the cost of
external funding increased. The Banking Regulation and
Supervisory Agency of Turkey has also implemented macroprudential
measures that have helped manage credit growth. In our view,
however, Turkey's central bank's monetary policy--with stable
policy repo rates but frequently adjusted and diverging overnight
rates--has been less effective in influencing monetary conditions
or narrowing Turkey's sizable external deficit. This has been
partly due to the highly accommodative monetary policies of
global central banks in advanced economies," S&P said.

"We believe that the government will aim to stabilize net general
government debt to GDP at around 35% by 2015, despite our
expectation that GDP will slow to 2% in 2012 as credit growth
decelerates. We estimate that the general government primary
surplus will likely have reached 1% of GDP in 2011 before
deteriorating mildly over the ratings horizon (2012-2015) due to
our forecast of economic slowdown. In our opinion, much of 2011's
expected fiscal outperformance is due to temporary factors,
including what we view to have been an unsustainable, credit-
driven, year-on-year expansion of nominal GDP by some 15%, as
well as the government's success in raising funds by tax
amnesties. While Turkey's large and resilient economy benefits
from a young and rapidly growing population, the social security
deficit continues to be the major driver of headline general
government deficit, highlighting the need for social security
reform," S&P said.

"The stable outlook reflects our view that the key risks to the
Turkish economy will likely remain in balance in the next 12
months," S&P said.

"If external demand is stronger than we have assumed in our base
case scenario, and the Turkish economy continues to shift toward
net-export-driven growth, its external imbalances could unwind
without the fiscal accounts significantly weakening or banks
destabilizing. As of April 2012, the banking sector continued to
report a loan-to-deposit ratio of just under 100%, compared with
less than 80% at end-2009. As Turkey moves toward more-balanced
and sustainable growth, its sovereign credit standing could
improve," S&P said.

"We could consider a positive rating action if we see that
structural reforms to the social security and energy sectors, and
to education and labor policy, have boosted foreign direct
investment and GDP growth. Creditworthiness could also improve,
in our view, were the Turkish government to rationalize public
spending and reduce budgetary vulnerabilities in the medium-to-
long term," S&P said.

"On the other hand, if external demand is weaker than our
baseline assumption, or Turkey's oil import price rises further
and external financing costs increase, economic adjustment would
be seen in a sharper contraction in domestic demand. In our view,
this could adversely affect Turkey's fiscal account as well as
Turkish banks' credit quality, thus potentially weakening
Turkey's creditworthiness and placing pressure on the ratings,"
S&P said.

"Moreover, a continued abundant supply of liquidity, globally,
could exacerbate imbalances in Turkey. In our view, a delayed
correction would increase the risk of reduced access to external
funding and could also weaken the government's fiscal accounts
beyond our current expectations, which could place downward
pressure on the ratings," S&P said.

U N I T E D   K I N G D O M

ARGOS: Hires Consultants to Conduct Radical Overhaul
Louisa Peacock at The Telegraph reports that the new chief
executive of Argos, John Walden, has drafted in consultants to
conduct a radical overhaul of the struggling retailer.

Mr. Walden, who joined Argos nine weeks ago, has hired OC&C
Strategy Consultants to help him turn the business around, the
Telegraph relates.

The root and branch review could close some of the company's 700
shops as well as revamp the remaining stores to make them more
appealing to customers, the Telegraph discloses.

Analysts expect the number of Argos shops to be cut dramatically
as the company struggles to compete with online retailers, the
Telegraph notes.

The overhaul, which is already under way, is understood to be
assessing which stores are profitable and whether sales can be
substituted in other nearby stores or online, the Telegraph says.

Details of which stores face closure are not expected until at
least October, however, the Telegraph states.

Argos is a catalogue merchant based in the United Kingdom and
Ireland.  Together with sister company Homebase, it today forms
part of the Home Retail Group.

DEWEY & LEBOEUF: Prepares to Liquidate U.K. Office
Jeremy Hodges, Linda Sandler and Sophia Pearson at Bloomberg News
report that Dewey & LeBoeuf LLP is preparing to liquidate its
U.K. office while its U.S. practice tries to collect its bills
and preserve its business.

According to Bloomberg, two people familiar with the situation
said that the New York-based law firm's London office appointed a
committee including restructuring lawyer Mark Fennessy and
banking lawyer Bruce Johnston to review its options to wind down
or close the business.

Bloomberg notes that one of the people said more than 25 partners
work at Dewey's London operation, out of about 300 partners
worldwide before a round of departures.

Martin Bienenstock, one of four members of Dewey's chairman's
office, said that in New York, the firm is near an agreement with
banks about extending a credit line and plans to stave off
bankruptcy by collecting bills to pay lenders and transferring
employees and property to other firms, Bloomberg relates.  He
said that Dewey is talking with potential merger partners and its
lenders are being cooperative.

"Bankruptcy is always a last resort and is not in current plans,"
Bloomberg quotes Mr. Bienenstock, who heads Dewey's restructuring
group, as saying in an e-mail on Tuesday.  "If real property and
equipment leases are assumed by other firms or renegotiated, and
the lenders realize on their accounts receivable and inventory,
there may be no need."

Dewey's U.K. partnership, which also covers its Paris office, is
a separate legal entity to the firm's U.S. limited liability
partnership, so a decision on whether to file for so-called
administration can be made separately, Bloomberg notes.

Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP.  The New York Times
reports that before the recent departures, Dewey employed about
2,000 people -- roughly 1,000 lawyers in 25 offices across the
globe and the other half support staff including legal
secretaries, mailroom clerks and paralegals.

* UK: Moody's Says RMBS Master Trusts Exposed to Extension Risk
Absent sponsor support, extension risk for scheduled and bullet
notes remains significant for UK RMBS master trusts, according to
a new report published on May 1 by Moody's Investors Service.
Extension beyond a scheduled or bullet maturity can lead to the
re-pricing of risk, low redemption rates and actual and potential
trigger breaches in some trusts. These breaches affect principal
payment allocation and can significantly affect yields.

"Looking at only the assets in the deals, all notes in the Aire
Valley, Lanark, Langton and Lannraig master trusts extend under
their current total redemption rates (TRR)," says Jonathan
Livingstone, a Moody's Vice President-Senior Analyst and author
of the report "UK RMBS Master Trusts: Extension Risk Remains
Significant due to Low Principal Payment Rates". "We assess the
overall extension-risk score for 80.9% notes in all trusts to be
at least Medium/High, which is a slight increase compared with
the 73.8% recorded for 2011. This assessment reflects the (i)
reliance on a high proportion of scheduled notes without high
accumulation periods; and (ii) continuing historically low
principal payment rates observed in the trusts," says
Mr. Livingstone.

In this report, Moody's notes that many trusts are structured
such that they rely on the originator to refinance the notes on
their due dates or else the risk of notes extending remains high.
Lack of originator support and low repayment rates has meant that
many of the scheduled amortization notes in the Aire Valley and
Granite master trusts have already extended past their expected
maturity dates.

This report goes on to note that with the property market
remaining stagnant amidst tight credit conditions, TRRs will
remain at around 15% over the next 12 months, which is
significantly below their 34.5% average between 2005-08. TRRs
will also remain under downward pressure from (i) tight lending
conditions for buy-to-let (BTL), non-conforming and interest-only
mortgages; (ii) the increasing portion of borrowers who are
unable to refinance onto more attractive rates with other lenders
having standard variable rate (SVR) loans; (iii) trusts with
greater exposure to loans with limited-income verification,
interest-only features and higher-indexed LTVs, which tend to
have greater proportions of SVR loans so creating "mortgage
prisoners"; and (iv) continued historically low levels of
unscheduled principal payments, which occur when borrowers move

* UK: Moody's Says Olympics Give Short-Term Boost to Corporates
Although the 2012 Summer Olympic and Paralympic Games are
expected to provide a huge marketing opportunity for corporates,
the benefits are likely to be largely short-lived, providing only
a temporary fillip to corporate earnings, says Moody's investors
Service in a Special Comment published on May 1.

The new report is entitled "London 2012 Olympics Provide a Short-
term Boost, But No Gold Medal for Corporates".

"Overall, we think that the Olympics are unlikely to provide a
substantial boost to the UK economy and believe that the impact
of infrastructure developments on UK GDP has probably already
been felt," says Richard Morawetz, a Vice President -- Senior
Credit Officer in Moody's Corporate Finance Group. "We expect the
net impact of the Olympics on UK tourism will be positive
overall, but far less than gross visitor numbers would suggest."

Moody's expects that corporate sponsors will benefit most from
the Games. However, given the largely one-off impact of the Games
on corporate profits, the rating agency does not expect that this
alone will have an impact on its ratings, which tend to take a
longer-term view.

The hotel sector will be a clear beneficiary and can expect some
very positive revenue per room (revpar) numbers during and around
the events themselves. However, Moody's cautions that this could
result in some weak year-on-year comparable results in 2013.

While increased visitor numbers could boost sales of retail and
consumer products, Moody's expects that any longer-term benefits
will be mainly from increased visibility of the brands, rather
than actual sales.

The advertising and marketing sectors are also likely to benefit
not only from the Games, but also from the UEFA European Football
Championship and the US presidential elections, which make up a
trio of events that occur in the same year every four years.

In addition, the earnings uplift for the transport sector may not
be clear-cut, in Moody's view, as lower-margin tourist travellers
may displace business travellers during the Games.

Some sectors, such as construction, may already be affected by a
slowdown in projects as the infrastructure for the Games is
largely complete.


* Upcoming Meetings, Conferences and Seminars

July 14-17, 2012
     Southeast Bankruptcy Workshop
        The Ritz-Carlton Amelia Island, Amelia Island, Fla.
           Contact: 1-703-739-0800;

Aug. 2-4, 2012
     Mid-Atlantic Bankruptcy Workshop
        Hyatt Regency Chesapeake Bay, Cambridge, Md.
           Contact: 1-703-739-0800;

November 1-3, 2012
     TMA Annual Convention
        Westin Copley Place, Boston, Mass.

Nov. 29 - Dec. 2, 2012
     Winter Leadership Conference
        JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
           Contact: 1-703-739-0800;

April 10-12, 2013
     TMA Spring Conference
        JW Marriott Chicago, Chicago, Ill.

October 3-5, 2013
     TMA Annual Convention
        Marriott Wardman Park, Washington, D.C.


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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Information contained herein is obtained from sources believed to
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