TCREUR_Public/120509.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, May 9, 2012, Vol. 13, No. 92

                            Headlines



B E L G I U M

BRUSSELS AIRPORT: S&P Affirms 'BB+' Corporate Credit Rating


G E R M A N Y

SEB IMMOINVEST: To Be Liquidated Within Five Years


H U N G A R Y

* HUNGARY: Mandatory Company Liquidations Up 28% in April


I R E L A N D

HARVEST CLO V: S&P Raises Ratings on Two Note Classes to 'BB+'
TREASURY HOLDINGS: Files Suit v. NAMA Over Battersea Loans


I T A L Y

BANCA TERCAS: Moody's Cuts Bank Financial Strength Rating to E+


K A Z A K H S T A N

BTA BANK: Creditors Still Seek Consensual Negotiation


S P A I N

SANTANDER FINANCIACION: Moody's Withdraws Ratings on Notes
* COMMUNITY OF VALENCIA: S&P Affirms 'BB/B' Issuer Credit Ratings
* SPAIN: Government Mulls Setting Up "Bad Bank"


S W E D E N

ESSELTE GROUP: Moody's Assigns 'B2' CFR; Outlook Stable


T U R K E Y

TURKIYE IS BANKASI: S&P Affirms 'BB/B' Counterparty Ratings


U N I T E D   K I N G D O M

AN AGENCY CALLED ENGLAND: Under Creditors Voluntary Liquidation
ARCH CRU: Investors to Get Additional Compensation
ARGOS: Seeks to Alleviate Fears About Future
DEWEY & LEBOEUF: Loses Three Partners in London
* UK: NHS Hospitals Obtained GBP415MM in Emergency Loans in 2011


X X X X X X X X

* S&P Affirms Ratings on 21 CDO of SF Tranches at 'CCC-'


                            *********


=============
B E L G I U M
=============


BRUSSELS AIRPORT: S&P Affirms 'BB+' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Belgium-based airport operator group The Brussels Airport Company
(BAC) and Brussels Airport Holding S.A/N.V. (BAH) (together the
group) to positive from stable. "At the same time, we affirmed
our 'BB+' long-term corporate credit ratings on the group," S&P
said.

"In addition, we affirmed our 'BB+' issue rating on BAH's senior
secured bank loan. The recovery rating on this loan is unchanged
at '3', indicating our expectation of meaningful (50%-70%)
recovery in the event of a payment default," S&P said.

"The outlook revision reflects a recent improvement in the
group's credit metrics, such that, in our view, the group will
reach and maintain Standard & Poor's-adjusted funds from
operations (FFO) to debt of more than 12% in the near term, and
more than 13% in 2013, despite a weak macroeconomic outlook in
Europe and higher capital spending plans," S&P said.

"The outlook revision also reflects our view that the group will
successfully extend the maturity profile of its debt, while
keeping the current level of debt the same. Currently, the
group's debt amounts to about EUR1.2 billion and matures in
2015," S&P said.

"The 'BB+' rating on the group is based on our assessment of its
SACP of 'bb+,' as well as our view that there is a 'low'
likelihood that the Kingdom of Belgium (AA/Negative/A-1+;
unsolicited ratings) would provide timely and sufficient
extraordinary support to the group in the event of financial
distress," S&P said.

"The issue rating on BAH's senior secured facilities is 'BB+', in
line with the long-term corporate credit rating. The recovery
rating on these instruments is '3', indicating our expectation of
meaningful (50%-70%) recovery for creditors in the event of a
payment default," S&P said.

The recovery rating is underpinned by a stressed enterprise
valuation of about EUR890 million, based on a going-concern
valuation, and a distressed EBITDA of about EUR127 million at our
simulated point of default in 2015.

"The positive outlook reflects the possibility of us raising the
rating on the group if it achieves adjusted FFO to debt of more
than 12% on a sustainable basis, with operating performance
remaining sound. A possible upgrade would also depend on the
successful extension of the group's debt maturity profile well
ahead of its maturity," S&P said.

"We could revise the outlook to stable if we believe that the
company will not achieve adjusted FFO to debt of more than 12% on
a sustainable basis. Weaker credit ratios than we forecast could
be caused by softer economic conditions than we currently
anticipate, deteriorating operating performance, or a more
aggressive financial policy, such as an increase in leverage. We
could also take a negative rating action if the group reduces the
amount outstanding on its shareholder loan, because this could
lead us to reassess our view that this instrument is equity-like
in nature," S&P said.


=============
G E R M A N Y
=============


SEB IMMOINVEST: To Be Liquidated Within Five Years
--------------------------------------------------
Dalia Fahmy at Bloomberg News reports that SEB Asset Management
AG will liquidate its EUR6 billion (US$7.8 billion) ImmoInvest
portfolio, the largest German property mutual fund to be
dissolved after failing to meet investor withdrawals.

According to Bloomberg, a statement on Monday said that SEB
ImmoInvest will be wound up within five years after investors
asked for redemptions that exceeded its liquidity "considerably".
The fund increased the cash portion of its assets to more than
30% by selling real estate, Bloomberg discloses.

"Despite all efforts, the liquidity required could not be met
without jeopardizing the quality and structure of the SEB
ImmoInvest portfolio," Bloomberg quotes Frankfurt-based SEB Asset
Management as saying.  The company owns 132 properties including
Berlin's Potsdamer Platz.

The fund will distribute money to investors in semiannual
payments starting in June, Bloomberg discloses.  SEB ImmoInvest
will be dissolved by April 30, 2017, Bloomberg notes.


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


* HUNGARY: Mandatory Company Liquidations Up 28% in April
---------------------------------------------------------
MTI-Econews, citing company information provider Opten, reports
that the number of mandatory liquidation procedures initiated
against Hungarian companies came to 1,796 in April, up 28% from a
year earlier.

The number of liquidations was 7.7% below the average in the
first quarter, MTI-Econews says.

The number of voluntary liquidations jumped, however 48% from a
year earlier to 3,307 in April, MTI-Econews calculated based on
earlier Opten figures.

The number was down 16% from March, but exceeded 3,000 for the
third month in a row, MTI-Econews notes.


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


HARVEST CLO V: S&P Raises Ratings on Two Note Classes to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
all rated classes of notes in Harvest CLO V PLC.

Specifically, S&P has:

-- raised its ratings on the class E-1, E-2, P combo, and T
    combo notes; and

-- affirmed its ratings on the class A-D, A-R, A-2, B, C-1, C-2,
    D, S combo, and U combo notes.

"The rating actions follow our assessment of the transaction's
Performance -- using data from the latest available trustee
report dated Feb. 29, 2012 -- and a cash flow analysis. We have
taken into account recent transaction developments and applied
our 2010 counterparty criteria," S&P said.

"Our analysis indicates that the credit enhancement available for
all the rated classes of notes has increased since we previously
took rating action in the transaction on April 16, 2010. In our
opinion, this is due to a reduction in the outstanding balances
of the class A-D and A-R notes, which have been paid down from
interest and principal proceeds to cure previously failing
coverage tests. In addition, we note that the class D, E-1, and
E-2 notes have repaid previously deferred interest, and that all
the notes are currently paying timely interest. From the February
2012 trustee report, we observe that all the coverage tests have
improved since our last review, and are now passing," S&P said.

"Our analysis indicates that there has been an improvement in the
credit quality of the portfolio, such as a fall in assets rated
'CCC+', 'CCC', or 'CCC-', to 5.7% from 12.2%. Together with a
decrease in the portfolio's weighted-average maturity to 5.2
years from 6.9 years, this has resulted in a reduction in our
scenario default rates (SDRs) for all rating categories in our
analysis of this transaction. We note too an increase in the
weighted-average spread to 3.4% from 2.86%, although our analysis
indicates that the weighted-average recovery rates have fallen,"
S&P said.

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

"From our analysis, we note that non-euro-denominated assets
currently compose 26.46% of the portfolio. U.S. dollar-
denominated assets and British pound sterling-denominated assets
(composing 22.97% of the portfolio) are funded by the class A-R
notes, which can be drawn in both U.S. dollars and sterling to
create a natural currency hedge. Additionally, 3.49% of the non-
euro-denominated assets in the portfolio are hedged by cross-
currency swaps. Any remaining foreign exchange mismatches are
hedged by options. In our opinion, the documentation for the
options and cross-currency swaps does not fully reflect our 2010
counterparty criteria. Hence, in our cash flow analysis, we have
also considered scenarios where the options and cross-currency
swap counterparties do not perform, and where, as a result, the
transaction may be exposed to greater currency risk," S&P said.

"Our credit and cash flow analysis, without giving credit to the
options and cross-currency swap counterparties, indicates that
the credit enhancement available to the class A-D and A-R notes
is at a level that we consider to be commensurate with our
current ratings on these notes. We have therefore affirmed our
ratings on these notes," S&P said.

"In our opinion, the credit enhancement available to the class A-
2, B, C-1, C-2, and D notes is also commensurate with our current
ratings, taking into account our credit and cash flow analysis.
As our current ratings on all of these classes of notes are equal
to or lower than those on the options and cross-currency swap
counterparties in the transaction, they are not constrained by
our ratings on the options and cross-currency swap
counterparties," S&P said.

"We have raised our ratings on the class E-1, E-2, P combo, and T
combo notes, as our credit and cash flow analysis indicates that
the credit enhancement is now commensurate with higher ratings
than previously assigned. In addition, we have corrected by
raising our rating on the class T combo notes. Due to an error,
we modeled a higher stated coupon for this class than we should
have when we took rating action on these tranches in April 2010.
The principal notional amounts of both the class P combo and T
combo notes have been paid down by interest from their rated
components," S&P said.

"From our analysis, we note that due to the lack of equity
distributions, the OAT (obligation assimilable du tresor)
component collateralizing the class S combo notes has been
further liquidated on each payment date since we last took rating
action on these notes on July 16, 2010 -- although the principal
amount of the class S combo OAT component is still larger than
that of the principal amount of the class S combo notes. We also
understand that the class U combo noteholders have elected not to
sell their corresponding OAT since the transaction's first
payment date; hence, no sale of the OAT strip has taken place
since July 2010. However, if the class U combo noteholders choose
to sell their class U combo notes, the liquidation of the class U
combo OAT component would, in our opinion, expose the transaction
to market value risk. Taking into account the overall performance
of the portfolio and the factors, in our view, the
creditworthiness of the class S combo and U combo notes is still
commensurate with their current ratings. Hence, we have affirmed
our ratings on these notes," S&P said.

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

Harvest CLO V is a managed cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. It closed in April 2007 and is
managed by 3i Debt Management Investments Ltd.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

         http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Harvest CLO V PLC
EUR697.55 Million Senior Secured Notes Including EUR65 Million
Subordinated Notes,
and EUR47.55 Million Combination Notes

Class                  Rating
            To                      From

Ratings Raised

E-1         B (sf)                  CCC+ (sf)
E-2         B (sf)                  CCC+ (sf)
P combo     BB+ (sf)                B+ (sf)
T combo     BB+ (sf)                CCC- (sf)

Ratings Affirmed

A-D         AA (sf)
A-R         AA (sf)
A-2         A+ (sf)
B           A- (sf)
C-1         BBB- (sf)
C-2         BBB- (sf)
D           BB+ (sf)
S combo     BB (sf)
U combo     BB (sf)


TREASURY HOLDINGS: Files Suit v. NAMA Over Battersea Loans
----------------------------------------------------------
Jamie Smyth and Ed Hammond at The Financial Times report that
Treasury Holdings is suing Ireland's National Asset Management
Agency for hundreds of millions of euros in damages over the
state agency's decision to appoint receivers to the company's
flagship Battersea power station development.

In an application to Dublin's High Court on May 1, Treasury
Holdings alleged NAMA breached the company's constitutional
rights and acted in breach of its own statutory duties by calling
in loans related to Battersea and 36 Irish properties, the FT
notes.

The company claims it had lined up a credible investor for
Battersea, the Malaysian company SP Setia, the FT states.  NAMA's
actions cost the company EUR400 million in management fees and a
share of GBP4.5 billion in gross profits over the lifetime of the
flagship development in London, it alleges in the action, the FT
discloses.

Treasury Holdings, the FT says, is also initiating a legal action
against the Irish state, claiming the act that established NAMA
is unconstitutional because it restricts a plaintiff's
entitlement to launch a suit for damages, say people with
knowledge of the case.

In December, NAMA and Lloyds Bank appointed receivers to
Battersea Power Station Shareholder Vehicle, the holding company
behind the London development, the FT recounts.  Treasury
Holdings owned 41% of the holding company through its
shareholding in Real Estate Opportunities, the majority
shareholder in Battersea, the FT discloses.

NAMA also subsequently appointed receivers to 36 of Treasury's
Irish developments in a move that sparked a legal challenge from
Treasury Holdings in the Irish courts, the FT relates.  The
agency, as cited by the FT, said it called in the loans because
Treasury was "hopelessly and grossly insolvent."

In March, Treasury Holdings won the right to undertake a full
judicial review of NAMA's decision to appoint receivers, the FT
recounts.

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


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


BANCA TERCAS: Moody's Cuts Bank Financial Strength Rating to E+
---------------------------------------------------------------
Moody's Investors Service has downgraded Banca Tercas' bank
deposit rating to B3 from Baa3 and the Prime-3 short-term rating
to Non-Prime; at the same time, the bank's standalone bank
financial strength rating (BFSR) was downgraded to E+, mapping to
a b3 standalone credit strength, from D+/baa3. All ratings remain
on review for downgrade.

Rating Rationale

Moody's says that the downgrade of Banca Tercas' standalone
rating was triggered by the intervention of the Italian regulator
on May 4, placing Banca Tercas under administration by the Bank
of Italy, as well as by the factors that led to the intervention
by the Bank of Italy, namely serious operating irregularities as
well as inadequate governance structures, and internal controls.
In addition, the bank's financial fundamentals had deteriorated
significantly, which had been the focus of the review initiated
on February 15. Banca Tercas' profitability had weakened
considerably given its heightened provisioning requirements for a
deteriorating loan portfolio. The resulting loss for 2011,
combined with low capital levels, leaves the bank weakly
positioned to absorb any possible further asset quality
deterioration.

The combination of these factors point to a significantly higher
risk profile, compatible with an E+ standalone financial strength
rating. The review for downgrade will focus on the developments
over the coming weeks and the actions that will be taken by the
regulator, assessing whether they can underpin the bank's current
risk profile or whether they may lead to a possible further
deterioration for creditors. The review will also assess the
future direction and prospects for Banca Tercas, including steps
the bank can take to reinforce its risk management, governance
and control structures. The review will also consider any actions
or plans to strengthen the bank's capital base to improve its
resilience against further credit losses and against the broader
challenges facing the Italian banking system, notably a
deteriorating operating environment, weakening asset quality and
more challenging wholesale funding markets.

The downgrade of the deposit rating is in line with the lowering
of the BFSR rating and standalone credit strength. The B3 long-
term deposit rating reflects a low likelihood of systemic
support, providing no uplift from the b3 standalone credit
strength. The long-term deposit rating remains on review for
downgrade, in line with the BFSR.

Banca Tercas' BFSR could be moderately upgraded -- although
unlikely in the short to medium term -- if its controls,
governance structure and operations are visibly and demonstrably
strengthened, accompanied by improving profitability and
capitalization over a sustained period. The BFSR could be
downgraded further if the administration weakens the bank's
franchise or funding profile, if further credit quality issues
surface, or if there are steps taken by the administrator that
would be to the detriment of creditors or depositors.

The following ratings were downgraded:

     Bank Financial Strength Rating, Downgraded to E+ from D+

     Bank Deposit Rating, Downgraded to B3 from Baa3

     Short-term rating, Downgraded to Non Prime from Prime 3

Banca Tercas is headquartered in Teramo, Italy. At December 2011,
it had total assets of EUR5.3 billion.

Principal Methodlogies Used

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


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


BTA BANK: Creditors Still Seek Consensual Negotiation
------------------------------------------------------
Nariman Gizitdinov at Bloomberg News reports that the creditors
of BTA Bank, the Kazakh lender that's seeking to restructure its
debt for a second time in many years, continue to seek
"consensual" talks after demanding early reimbursement of
recovery units last week.

According to Bloomberg, BTA said on May 3 that the lender
received a "notice of acceleration" regarding its more than
US$5.2 billion "initial reference amount of recovery units" from
BNY Mellon Corporate Trustee Services Ltd. as trustee for the
holders of the units.

"The acceleration doesn't represent a change in the creditors'
approach," Bloomberg quotes Joseph Swanson, co-head of European
restructuring at Houlihan Lokey in London, which is advising BTA
creditors, as saying.  "The goal is still to have a consensual
negotiation with the objective of leaving BTA healthy and able to
support its clients."

BTA said on April 23 that it had halted all payments on its
recovery units, Bloomberg notes.

Kazakh sovereign-wealth fund Samruk-Kazyna took over BTA in
February 2009, two months before the nation's largest lender at
the time defaulted on $12 billion of debt, Bloomberg recounts.
BTA is seeking an agreement with creditors on its second
restructuring by September, Bloomberg says, citing a March 22
presentation published on its Web site.

                         About BTA Bank

BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO --
http://bta.kz/-- is a Kazakhstan-based financial institution,
which is involved in the provision of banking and financial
products for private and corporate clients.

The BTA Group is one of the leading banking groups in the
Commonwealth of Independent States and has affiliated banks in
Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and
Turkey.  In addition, the Bank maintains representative offices
in Russia, Ukraine, China, the United Arab Emirates and the
United Kingdom.  The Bank has no branch or agency in the United
States, and its primary assets in the United States consist of
balances in accounts with correspondent banks in New York City.

As of November 30, 2009, the Bank employed 5,043 people inside
and 4 people outside Kazakhstan.  It has no employees in the
United States.  Most of the Bank's assets, and nearly all its
tangible assets, are located in Kazakhstan.

JSC BTA Bank, also known as BTA Bank of Kazakhstan, commenced
insolvency proceedings in the Specialized Financial Court of
Almaty City, Republic of Kazakhstan.  Anvar Galimullaevich
Saidenov, the Chairman of the Management Board of BTA Bank, then
filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 10-10638)
on Feb. 4, 2010, estimating more than US$1 billion in assets and
debts.

On March 9, 2010, the Troubled Company Reporter-Europe reported
that JSC BTA Bank was granted relief in the U.S. under Chapter 15
when the bankruptcy judge in New York recognized the Kazakh
proceeding as the "foreign main proceeding."  Consequently,
creditor actions in the U.S. were permanently halted, forcing
creditors to prosecute their claims and receive distributions
in Kazakhstan.

In the U.S., the Foreign Representative is represented by Evan C.
Hollander, Esq., Douglas P. Baumstein, Esq., and Richard A.
Graham, Esq. at White & Case LLP in New York City.

The Specialized Financial Court of Almaty approved BTA Bank's
debt restructuring on Aug. 31, 2010, trimming its obligations
from US$16.7 billion to US$4.2 billion, and extending its longest
maturity dates to 20 year from eight.  Creditors who hold 92% of
BTA's debt approved the restructuring plan in May.  BTA
reportedly distributed US$945 million in cash to creditors
and new debt securities including US$5.2 billion of recovery
units (representing an 18.5% equity stake) and US$2.3 billion of
senior notes on Sept. 1, 2010.  BTA forecasts profit of slightly
more than US$100 million in 2011, Chief Executive Officer Anvar
Saidenov told reporters in Almaty.


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


SANTANDER FINANCIACION: Moody's Withdraws Ratings on Notes
----------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of classes A,
B, C, D, E and F notes issued by Santander Financiacion 3, FTA,
after the deal was early liquidated on 15 February 2012 interest
payment date.

Issuer: SANTANDER FINANCIACION 3 FTA

    EUR845M A Notes, Withdrawn (sf); previously on Nov 17, 2009
Downgraded to Aa2 (sf)

    EUR49M B Notes, Withdrawn (sf); previously on Nov 17, 2009
Downgraded to Baa1 (sf)

    EUR28M C Notes, Withdrawn (sf); previously on Nov 17, 2009
Downgraded to Ba2 (sf)

    EUR36M D Notes, Withdrawn (sf); previously on Nov 17, 2009
Downgraded to Caa2 (sf)

    EUR42M E Notes, Withdrawn (sf); previously on Nov 17, 2009
Downgraded to Caa3 (sf)

    EUR22M F Notes, Withdrawn (sf); previously on May 13, 2008
Definitive Rating Assigned Ca (sf)

Moody's Investors Service has withdrawn the ratings of all
classes of notes issued by Santander Financiacion 3, FTA after
the deal was early liquidated with the consent of Banco
Santander, S.A. which was the only noteholder and deal
counterparty.

Available funds were only sufficient to repay principal and
interest in full for classes A,B, C and D while 41.2% of class E
and 100% of classes F principal was not repaid. Interests on
classes E and F were paid also partially.

Potential loss on tranche E and F was factored in rating of the
note prior to rating withdrawal. Santander Financiacion 3, FTA
closed on May 2008. The transaction was backed by a mixed
portfolio of auto loans and consumer loans originated by Banco
Santander, S.A. (Aa3 on review for possible downgrade /P-1 not on
watch).

The principal methodology used in this rating was Moody's
Approach to Rating Consumer Loan ABS Transactions published in
July 2011.


* COMMUNITY OF VALENCIA: S&P Affirms 'BB/B' Issuer Credit Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term issuer
credit ratings on the Spanish normal-status regions, and removed
the ratings from CreditWatch with negative implications, where it
placed them on Jan. 30, 2012:

  * The Autonomous Community of Madrid to 'BBB+' from 'A'
  * The Autonomous Community of Galicia to 'BBB+' from 'A'
  * The Autonomous Community of the Canary Islands to 'BBB+' from
    'A'
  * The Autonomous Community of Andalusia to 'BBB' from 'A'
  * The Autonomous Community of Aragon to 'BBB' from 'A'
  * The Autonomous Community of the Balearic Islands to 'BBB-'
    from 'A-'
  * The Autonomous Community of Catalonia to 'BBB-' from 'A'.

S&P is also lowering our short-term issuer credit ratings on:

  * The Autonomous Community of Madrid to 'A-2' from 'A-1'
  * The Autonomous Community of Galicia to 'A-2' from 'A-1'
  * The Autonomous Community of Catalonia to 'A-3' from 'A-1'.

"We affirmed our 'BB/B' long- and short-term issuer credit
ratings on the Autonomous Community of Valencia and removed them
from CreditWatch negative, where we placed them on Feb. 28,
2012," S&P said.

"We also affirmed our 'BB' issue ratings on Valencia's senior
unsecured debt. We have assigned a '4' recovery rating to this
debt, indicating our expectation of average (30%-50%) recovery in
the event of a payment default," S&P said.

The outlooks on all eight regions are negative.

The rating actions follow S&P's downgrade of the Kingdom of
Spain. They also reflect:

- S&P's downward revision of the institutional framework score
   for Spanish normal-status regions; and

- S&P's view that the deterioration in Spain's economy is
   further eroding the long-term growth potential of major
   regional tax bases, and for some regions, worse-than-expected
   budgetary performances in 2011, debt burden projections, or
   liquidity positions.

"We have revised down our institutional framework score for the
Spanish regions, to '3' from '2'. Following our downgrade of
Spain, we now believe the central government's capacity to
provide support to the regions over the long run has weakened,"
S&P said.

"In addition, Spain has entered into what we see as a mild
recession in 2012, and we anticipate a period of sluggish
economic activity over our forecast horizon (2012-2015). In the
same vein, we are of the view that regional tax bases--which were
already hit by the 2009 recession--will likely continue to shrink
in 2012, and undergo a period of lackluster growth over our
forecast horizon (2012-2015). Consistent with this view, we have
lowered our economic score for each region up to two levels," S&P
said.

"In accordance with our methodology applicable to local and
regional governments (LRGs) and their related sovereigns, we cap
the ratings on the autonomous communities of Madrid and Galicia
at the same level as the Kingdom of Spain," S&P said.

"An LRG can be rated higher than its sovereign only if we take
the view that the LRG exhibits certain characteristics described
in our criteria, including," S&P said:

  * The ability to maintain stronger credit characteristics than
    the sovereign in a stress scenario. This includes, among
    other factors, lack of dependence on the sovereign for any
    appreciable share of its revenues, and a more diverse and
    wealthy economy than the national economy;

  * An institutional framework that limits the risk of negative
    sovereign intervention; and

  * The ability to mitigate negative sovereign intervention
    through high financial flexibility and independent treasury
    management.

"We currently do not believe that any Spanish normal-status
region meets these criteria. Consequently, we do not rate the
regions of Madrid and Galicia -- the only two normal-status
regions capped by the sovereign -- higher than the Kingdom of
Spain," S&P said.

"Under our criteria, the 'indicative credit level' (ICL) for the
Autonomous Community of Madrid is 'a-'. The ICL for Galicia is
'a-'. The ICL is not a credit rating but instead reflects our
view of the 'intrinsic creditworthiness' of an LRG, under the
assumption that there is no sovereign rating cap," S&P said.

"The ICL takes into account our combined assessment of the
institutional framework where the LRG operates, as well as its
'individual credit profile,' which includes our assessment of the
LRG's economy, financial management, budgetary performance,
financial flexibility, debt burden, liquidity position, and
contingent liabilities," S&P said.

"The negative outlooks on the long-term ratings on the autonomous
communities of the Canary Islands, Andalusia, Aragon, the
Balearic Islands, Catalonia, and Valencia, reflect our view of
the risk that these autonomous communities might deviate from
budgetary targets set by the central government, resulting in
worse budgetary performances and higher debt accumulation in the
coming years. This could stem from a weaker economic performance,
which may depress tax revenues; or from looser controls on
operating and capital expenditures, which could be caused by a
weakening of the regions' respective financial management," S&P
said.

The negative outlooks on all eight regions reflect the risk that
liquidity and funding support mechanisms set up by the central
government might not function as smoothly as expected.

"The negative outlooks on the long-term ratings on the regions of
Madrid, Galicia, and the Canary Islands reflect our negative
outlook on the long-term sovereign rating on the Kingdom of
Spain. This is because we rate these three regions at the same
level as the long-term rating on Spain," S&P said.

S&P could revise the outlooks on the autonomous communities of
Madrid and Galicia to stable if it:

- perceived that liquidity evolved in line with its current
   expectations, on the back of functioning mechanisms of
   support from the central government, and

- revised the outlook on the long-term sovereign rating on Spain
   to stable.

S&P said it could revise the outlooks on the six remaining
autonomous communities to stable if it:

- perceived that their respective budgetary performances and
   debt burdens were in line with the agency's base-case scenario
   for 2012-2014, and assuming a gradual reduction in the deficit
   after capital expenditures;

- considered that as a result, the regions' management quality
   and liquidity positions were not likely to deteriorate;

- perceived that liquidity evolved in line with its current
   expectations, on the back of functioning mechanisms of support
   from the central government; and

- revised the outlook on the long-term sovereign rating on Spain
   to stable.


* SPAIN: Government Mulls Setting Up "Bad Bank"
-----------------------------------------------
Miles Johnson at The Financial Times reports that Spain's
government last week returned to the idea of setting up a "bad
bank" to hive off lenders' bad property assets, although with few
solid details known the plan was met with skepticism from some
analysts.

According to the FT, having considered the idea when first
elected last year, before scrapping it, Madrid is now considering
the merits of a state-organized holding company to take real
estate assets away from Spanish banks' balance sheets.

The return to the "bad bank" idea came as Spain and its banks
suffered a further credit rating downgrade from Standard &
Poor's, and the International Monetary Fund highlighted the
continuing risks posed by some of the country's part nationalized
cajas, the FT relates.

Finding a way to safely write down assets and restart the
property market has been a priority for the government, the FT
says.

The FT notes that analysts said if no additional money is raised,
aside from relatively small contributions from the Spanish
banking sector, then Spain will struggle to find the capital
cushion needed to provide provisions for lenders marking down
assets.


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


ESSELTE GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
to Esselte Group Holdings AB and rated its proposed $200 million
senior secured term loan B2. The proceeds from the new term loan
will be used to refinance the company's existing $175 million
term loan and pay a $23 million dividend. The rating outlook is
stable.

"Esselte's significant exposure to Europe is a concern because of
our expectation of recession in the Euro region in 2012" said
Kevin Cassidy, Senior Credit Officer at Moody's Investors
Service. "However, our concern is mitigated by the fact that the
majority of its European earnings come from the more stable
Northern European regions," he noted.

The following ratings were assigned:

Esselte Group Holdings AB

Corporate Family Rating at B2;

Probability of Default Rating at B2;

Esselte AB

$200 million senior secured term loan due 2017 at B2 (LGD4, 54%)

RATING RATIONALE

Esselte's B2 Corporate Family Rating reflects the company's
modest size with revenue below US$1 billion, moderate credit
metrics with proforma debt/EBITDA around 4.5 times (including all
Moody's standard adjustments), single digit EBITA margins and
minimal revenue growth. The rating also incorporates the mature
nature of the office supplies industry and modest customer
concentration. The rating is constrained by the company's very
high exposure to Europe where over half of its revenue and
earnings are generated. Mitigating this risk is that a
substantial amount of the company's European exposure comes from
the relatively better performing northern European countries. The
rating is supported by Esselte's solid market position within the
office supply product categories, good free cash flow generation,
commitment to pay down debt and good liquidity profile that
provides financial flexibility to continue to weather the
uncertain economic environment.

The stable outlook reflects Moody's expectation that Esselte will
continue to generate good free cash flow and pay down debt.
Moody's expectation of improving credit metrics is also reflected
in the outlook as is the expectation that the company will
maintain its generally conservative financial policies.

The rating could be upgraded if the company outperforms Moody's
expectations for a sustained period. Key credit metrics driving a
potential upgrade are EBITA margins approaching double digits
(currently around 6%) and debt/EBITDA sustained below 4 times
(currently over 4.5 times proforma). For the debt/ EBITDA upgrade
threshold to be met, EBITDA needs to increase by about US$15
million from proforma levels as of December 31, 2011 or debt
needs to decrease by around US$45 million.

A rating down grade is not likely in the near term given the
company's scale and moderate financial leverage. The rating could
be downgraded over the medium term if the company's operating
performance significantly deteriorates. Key credit metrics
driving a potential downgrade would be debt/EBITDA sustained at 6
times or higher or if the company consumes cash for a prolonged
period. For the debt/ EBITDA downgrade threshold to be met,
EBITDA needs to decrease by about US$45 million from proforma
levels as of December 31, 2011 or debt needs to increase by
around US$175 million.

The principal methodology used in rating Esselte was Moody's
Global Consumer Durables methodology published in October 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Esselte is the category leader in binders, desktop products, and
workspace products in Europe, and in filing products in North
America. Founded in Sweden, the company was acquired by J.W.
Childs in July 2002. Roughly 60% of its sales are in Europe and
the Asia Pacific, and 40% in North America. It has manufacturing
facilities in Europe, North America, and China. Net sales for the
twelve months ending March 2012 were just under US$1 billion.


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


TURKIYE IS BANKASI: S&P Affirms 'BB/B' Counterparty Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlooks to stable
from positive on the long-term counterparty credit ratings on six
Turkish financial institutions:

    Trkiye Garanti Bankasi A.S. (Garanti),
    Garanti Finansal Kiralama A.S. (Garanti Leasing),
    HSBC Bank A.S.,
    Trkiye Is Bankasi A.S. (Isbank),
    Trkiye Vakiflar Bankasi T.A.O. (VakifBank), and
    Yapi ve Kredi Bankasi A.S. (YapiKredi).

"At the same time, we affirmed the 'BB/B' long- and short-term
counterparty credit ratings on Isbank, Garanti Leasing,
YapiKredi, HSBC Bank A.S., and VakifBank, and the 'BB' long-term
counterparty credit rating on Garanti. We also affirmed the
Turkey national scale long- and short-term ratings at 'trAA/trA-
1' on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S.," S&P
said.

"The outlook revisions follow that on the sovereign, the Republic
of Turkey (foreign currency, BB/Stable/B; local currency, BBB-
/Stable/A-3), reflecting our concern that less-buoyant external
demand and worsening terms of trade could inhibit Turkey's
economic rebalancing," S&P said.

"We expect Turkey's creditworthiness to continue to be a key
driver of future rating actions on Turkish banks because of their
significant holdings of government securities and general
exposure to the domestic environment. Our Banking Industry
Country Risk Assessment (BICRA) on Turkey remains unchanged in
group '5', on a scale from '1' to '10', ranging from the lowest-
risk banking systems in group '1' to the highest risk in group
'10'. However, Turkey's above 8% annual real GDP growth over the
past two years has been largely driven by rapid domestic credit
expansion, financed mainly by short-term external funding for
banks. The increasing use of cross-border borrowing to fund asset
growth is a risk for Turkish banks. Rising risk aversion in
global capital markets could also erode investor confidence in
Turkey and Turkish banks," S&P said.

"The stable outlooks reflect that on the sovereign. Turkish
banks' financial performance and fundamentals will remain highly
correlated with sovereign creditworthiness through, among other
things, their significant holdings of government securities and
exposure to the domestic economic and financial environment.
Therefore, a negative rating action on the sovereign would
trigger the same on these entities," S&P said.

"We would also consider negative rating actions on these
institutions if Turkey's economy deteriorated more than we
currently expect and put additional pressure on their asset
quality, funding profiles, or financial performances," S&P said.

"A positive rating action on the sovereign, all other things
being equal, would lead to positive rating actions on the six
financial institutions," S&P said.

RATINGS LIST
Ratings Affirmed; CreditWatch/Outlook Action


                                        To                 From
Turkiye Garanti Bankasi A.S.
  Counterparty Credit Rating            BB/Stable/--
BB/Positive/--
Garanti Finansal Kiralama A.S.
HSBC Bank A.S.

Turkiye
Vakiflar Bankasi TAO
Yapi ve Kredi Bankasi A.S.
Turkiye Is Bankasi AS
Counterparty Credit Rating             BB/Stable/B
BB/Positive/B


Ratings Affirmed
HSBC Bank A.S.
Turkiye Is Bankasi AS
Turkiye Vakiflar Bankasi TAO
Yapi ve Kredi Bankasi A.S.
National Scale Rating                     trAA/--/trA-1

NB. Does not include all ratings affected


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


AN AGENCY CALLED ENGLAND: Under Creditors Voluntary Liquidation
---------------------------------------------------------------
Insider Media reports that An Agency Called England was placed
into creditors' voluntary liquidation.

The agency entered into a company voluntary arrangement (CVA) in
March 2011 following a restructure and management changes,
Insider Media recounts.  The CVA would have resulted in creditors
receiving cash owed to them, estimated to have been 35p in the
GBP1, Insider Media states.

However, documents released by recovery firm BWC Business
Solutions, which was the supervisor of the CVA, said An Agency
Called England Ltd. ceased trading in late February 2012, Insider
notes.

BWC Business Solutions said creditors' and employees' claims
totalling GBP444,263 and GBP14,429 respectively have been
received to date, Insider Media relates.  However, the failure of
the CVA means that "no dividend distribution will be available to
any class of creditor", Insider Media states.  A meeting for
creditors was scheduled to take place at BWC Business Solutions'
offices in Leeds at 11:00 a.m. on May 8, Insider Media discloses.

Although An Agency Called England has been placed into creditors'
voluntary liquidation, it is understood that a new business known
as 'England' has been set up, owned by newco Regional Media and
Television Ltd., according to Insider Media.

An Agency Called England is a Leeds-based marketing agency.


ARCH CRU: Investors to Get Additional Compensation
--------------------------------------------------
Brooke Masters at The Financial Times reports that as many as
15,000 investors in the failed Arch Cru funds will be in line for
an additional GBP100 million in compensation under a redress plan
announced on April 30 by the City watchdog.

The Financial Services Authority estimates that up to three-
quarters of the investors who lost money when the funds were
suspended in 2009 had received unsuitable advice, the FT
discloses.

Making the first ever use of new redress powers it received in
2010, the FSA plans to order the independent financial advisers
involved to contact their customers and offer compensation, the
FT says.

The plight of Arch Cru investors has been a cause celebre since
the funds were suspended for lack of liquidity in 2009, the FT
notes.  According to the FT, although the funds were UK
domiciled, they were invested in a series of "cells" listed on
the Channel Islands stock exchange that in turn bought everything
from oil tankers and student housing to wine.

The watchdog estimates the proposal will force IFAs to pay as
much as GBP100 million in compensation on top of the GBP54
million that Capita Financial Managers, the authorized corporate
director of the UK funds, together with HSBC and BNY Mellon, the
funds' depositaries, have already agreed to pay to Arch Cru
investors, the FT states.


ARGOS: Seeks to Alleviate Fears About Future
--------------------------------------------
Nathalie Thomas at The Telegraph reports that Argos-owner Home
Retail Group axed its final dividend and failed to overcome
doubts that the catalogue retailer can survive on the high
street.

Terry Duddy, chief executive of Home Retail, sought to alleviate
fears about the future of Argos, insisting there were plans to
close only 10 stores out of 750 this year despite expectations
the group could shut as many as 100 branches, the Telegraph
relates.

The retail veteran argued an "en masse" closure of stores would
make little financial sense as it would leave the group, which
also owns Homebase, liable to enormous rental payments, the
Telegraph discloses.

Mr. Duddy, as cited by the Telegraph, said that if Argos closed
100 of its worst-performing branches, the company would still
have to pay GBP125 million in rent and would lose out on GBP15
million of profits a year.

But retail analyst Philip Dorgan warned that John Walden, who was
brought in as managing director of Argos nine weeks ago, would
have to radically reposition the business away from bricks and
mortar to the web and mobile if it is to survive in the long
term, the Telegraph recounts.

According to the Telegraph, Mr. Dorgan, an analyst with Panmure
Gordon, said Argos would need a "significant store closure
program, as it shifts towards 'clicks' rather than 'bricks'".  He
suggested Argos would also have to compete with the likes of
online retail giant Amazon on price, the Telegraph notes.

"It will probably need a rescue rights issue to finance change,"
the Telegraph quotes Mr. Dorgan as saying.

Mr. Walden has asked OC&C Strategy Consultants to review the
chain's future, the Telegraph discloses.

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: Loses Three Partners in London
-----------------------------------------------
Kit Chellel and Jeremy Hodges at Bloomberg News report that Dewey
& LeBoeuf LLP lost three partners in London and Houston to Akin
Gump Strauss Hauer & Feld LLP, the latest in a string of
defections at the law firm battling to avoid bankruptcy.

According to Bloomberg, Akin Gump said in a statement that Dewey
energy attorneys John LaMaster and Marc Hammerson joined Akin
Gump in London, while Steven Otillar moved to the firm's Houston
office.

Dewey, based in New York, has been hit by the departure of about
100 partners and the ouster of Chairman Steven Davis, Bloomberg
notes.  Bloomberg relates that a person familiar with the matter
said the firm warned staff last week it may have to close if its
financial difficulties can't be resolved.

A three-partner team of mergers-and-acquisitions lawyers,
including Silicon Valley attorneys Richard Climan and Keith
Flaum, is preparing to leave Dewey for Weil Gotshal & Manges,
Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on May 03,
2012, Bloomberg News related that Dewey & LeBoeuf is preparing to
liquidate its U.K. office while its U.S. practice tries to
collect its bills and preserve its business.  Bloomberg disclosed
that two people familiar with the situation said 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 noted 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.

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: NHS Hospitals Obtained GBP415MM in Emergency Loans in 2011
----------------------------------------------------------------
Sally Gainsbury at The Financial Times reports that the
Department of Health has been forced to pay out GBP415 million in
emergency bailouts for NHS hospitals in the past year.

The sum is almost twice the size of emergency payouts issued the
year before and the largest since health department started
collating the data centrally in 2009-10, the FT notes.

According to the FT, Andy Burnham, the shadow health secretary,
said the figures were an "indictment" of the government's
reorganization of the NHS at a time when it faces unprecedented
restrictions in its funding.

The largest sums went to South London Healthcare trust which
received GBP79 million -- on top of GBP46 million it needed last
year; and Barking, Havering and Redbridge University Hospitals
which received GBP55 million, bringing the total emergency
funding it has received in the last three years to GBP114 million
-- more than the annual turnover of some small hospitals, the FT
discloses.

The health department has had to issue GBP817 million in
emergency loans to NHS hospitals in the three years since 2009-10
-- with more than half of the amount coming in the past 12
months, the FT says.


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


* S&P Affirms Ratings on 21 CDO of SF Tranches at 'CCC-'
--------------------------------------------------------
Standard & Poor's Services took various credit rating actions on
42 European synthetic collateralized debt obligation (CDO)
transactions. The affected tranches are backed by pooled
structured finance (SF) assets.

Specifically, S&P has:

- lowered and removed from CreditWatch negative its ratings on
   20 tranches,

- lowered and kept on CreditWatch negative its rating on one
   tranche, and

- affirmed its ratings on 21 tranches.

The complete list of public ratings affected by 's rating actions
is available in 'List Of European Synthetic CDO Of SF Rating
Actions At May 4, 2012, Following Our Revised Global CDO Of SF
Criteria,' published .

"We have taken the rating actions following the application of
our updated methodology and assumptions for rating CDO tranches
backed by pooled SF assets, which became effective on March 19,
2012. Our review has focused on updated synthetic rated
overcollateralization (SROC) ratios, which incorporate our
revised criteria, and any credit deterioration that may have
affected the tranches since we previously reviewed them," S&P
said.

"As part of the rating actions, we have resolved our CDO of SF
criteria-related CreditWatch negative placements of our ratings
on 21 synthetic CDO of SF tranches. We have also affirmed our
ratings on 21 other CDO of SF tranches that we currently rate
'CCC- (sf)', for which credit enhancement remains at levels that
we consider to be commensurate with our current ratings," S&P
said.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

         http://standardandpoorsdisclosure-17g7.com


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA.  Valerie U. Pascual, Marites O. Claro, Rousel Elaine T.
Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.

Copyright 2012.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 240/629-3300.


                 * * * End of Transmission * * *