TCREUR_Public/120524.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 24, 2012, Vol. 13, No. 103

                            Headlines



A U S T R I A

VOLKSBANKEN VERBUND: Fitch Keeps 'BB-' Viability Rating on RWN


C Y P R U S

CYPRUS POPULAR: Fitch Cuts Ratings on Covered Bonds to 'BB+'


D E N M A R K

* DENMARK: Regional Bank Sector Face More Insolvencies


F I N L A N D

ENCORIUM OY: Encorium Group Unit Seeks Bankruptcy in Espoo


F R A N C E

CEGEDIM SA: S&P Cuts Corp. Credit Rating to 'B+; Outlook Negative


G E R M A N Y

INVENTUX TECHNOLOGIES: Solar Market Price Drop Prompts Insolvency


H U N G A R Y

MALEV ZRT: Former Employees Conduct Protests Over Benefits


I R E L A N D

BACCHUS 2006-1: S&P Raises Rating on Class E Notes to 'CCC+'
EIRCOM GROUP: High Court Approves Five-Year Survival Scheme
WORLDSPREADS PLC: 15,000 Clients Covered by Compensation Scheme


L I T H U A N I A

SNORAS BANK: British Court Orders Arrest of Antonov's Property


L U X E M B O U R G

MONIER GROUP: Fitch Affirms 'B' Long-Term Issuer Default Rating


N E T H E R L A N D S

SENSATA TECHNOLOGIES: Moody's Upgrades Corp. Family Rating to Ba3
ST. JAMES PARK: S&P Raises Rating on Class E Notes to 'B+'


P O R T U G A L

* CITY OF LISBON: Moody's Withdraws 'Ba3' LT Issuer Rating


R U S S I A

BBVA LEASING: Fitch Affirms Rating on Class C Notes at 'Csf'
METALLURGICAL COMMERCIAL: Moody's Upgrades Debt Ratings to 'B2'
MY BANK: Moody's Withdraws 'Ba2' Long-Term National Scale Rating
MY BANK: Moody's Withdraws 'E' Bank Financial Strength Rating


S P A I N

BANKIA SA: Spain to Provide EUR9-Bil. to Cover Provisioning Needs
GAT FTGENCAT: Fitch Affirms Junk Ratings on Two Note Classes


S W E D E N

SAAB AUTOMOBILE: Receivers Halt Sale Negotiations with Youngman


U K R A I N E

RAILWAYS TRANSPORT: Fitch Assigns 'B' ST Foreign Currency Rating
UKRAINIAN RAILWAYS: S&P Assigns 'B-' LT Corporate Credit Rating


U N I T E D   K I N G D O M

HBOS PLC: Moody's Issues Summary Credit Opinion
MAN GROUP: Moody's Retains Review on (P)Ba1 Jr. Sub. Notes Rating
ROYAL BANK: Moody's Issues Summary Credit Opinion
ULYSSES NO. 27: S&P Cuts Ratings on Two Note Classes to 'D'


X X X X X X X X

* EUROPE: Experts Mull Extra Capital Buffers for Banks
* EU Telecom Operators' Cost Saving Opportunities Diminishing
* Upcoming Meetings, Conferences and Seminars


                            *********


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A U S T R I A
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VOLKSBANKEN VERBUND: Fitch Keeps 'BB-' Viability Rating on RWN
--------------------------------------------------------------
Fitch Ratings has affirmed Volksbanken Verbund's (VB-Verbund)
Long-term Issuer Default Rating (IDR) at 'A', Short-term IDR at
'F1', Support Rating at '1' and Support Rating Floor (SRF) at
'A'.  The Outlook on the Long-term IDR is Stable.  The agency has
maintained VB-Verbund's Viability Rating (VR) of 'bb-' on Rating
Watch Negative (RWN).

At the same time, Fitch has affirmed VB-Verbund's central
institution, Oesterreichische Volksbanken-Aktiengesellschaft's
(OeVAG) Long-term IDR at 'A', Short-term IDR at 'F1', Support
Rating at '1' and SRF at 'A'.  The Outlook on the Long-term IDR
is Stable.

Fitch placed VB-Verbund's VR on RWN in October 2011 to reflect
the challenges at OeVAG in relation to its capitalization, risk
profile and business model.  OeVAG had announced a number of
measures aimed at strengthening the group's capital and financial
position and at creating a more sustainable business model.
Further restructuring measures were announced on February 27,
2012, including a capital write-down of 70% and a simultaneous
capital increase, EUR250 million of which to be injected by the
Republic of Austria and EUR234 million by VB-Verbund's primary
banks.

The maintenance of the RWN reflects that the restructuring
process at OeVAG and VB-Verbund is still ongoing.  In Fitch's
view, the ultimate aim of tightening liquidity and capital
management as well as reporting standards across the VB-Verbund
will be beneficial for VB-Verbund's financial and risk profile in
the medium term.  However, in the meantime, VB-Verbund remains
exposed to considerable execution and implementation risks
relating to its restructuring process.  Fitch expects to resolve
the RWN upon completion of the legal implementation of the new
group structure, which is currently anticipated for Q312.

If VB-Verbund and OeVAG start to lag in implementing announced
measures, notably the announced capital measures and the revised
cross-support mechanism, the VR could be downgraded, potentially
by more than one notch.  Any additional extraordinary support
from the Republic of Austria could also lead to a downgrade of
VB-Verbund's VR.  Conversely, if the repositioning of the group
is successful, resulting in an improved capital position and
adequate and sustainable underlying profitability, the VR could
be affirmed.

The Long-term and Short-term IDRs of Wiener Spar- und
Kreditinstitut rGmbH (WSK), one of VB-Verbund's member banks,
have been placed on RWN.  This reflects the possibility that WSK
may not participate in VB-Verbund's ongoing restructuring process
and may consequently exit VB-Verbund, no longer benefitting from
VB-Verbund's "group" ratings.

Given the very small size of the bank, the agency does not expect
WSK's potential exit to have any meaningful impact on the group
and hence VB-Verbund's ratings remain unaffected by this
development.  If WSK decides to exit VB-Verbund, its ratings
would likely be downgraded in line with its standalone risk
profile and withdrawn.

The affirmation of VB-Verbund's and OeVAG's IDRs are based on
Fitch's view of the availability of sovereign support by the
Republic of Austria ('AAA'/Stable).  In Fitch's view, VB-
Verbund's sizeable domestic market share will remain unaffected
by OeVAG's ongoing reorganization and VB-Verbund will therefore
continue to be systemically important for the Austrian economy.
At end-2011, VB-Verbund had a domestic deposit market share of
6.9%.

Fitch has stated that it expects sovereign support for banks to
weaken over time in many developed economies. Should the agency
change its view about the propensity of the Austrian authorities
to provide support for VB-Verbund and other major Austrian banks,
this would lead to downward pressure on VB-Verbund's IDRs,
Support Rating and SRF.

VB-Verbund, which is not a legal entity itself but a cooperative
grouping of member banks, is Austria's fourth-largest banking
group. OeVAG is the central institution of VB-Verbund.  As such,
Fitch has assigned OeVAG "group" ratings under Fitch's rating
criteria for banking structures backed by mutual support
mechanisms.  Fitch does not assign a VR to OeVAG.

The rating actions are as follows:

VB-Verbund

  -- Long-term IDR: affirmed at 'A'; Stable Outlook
  -- Short-term IDR: affirmed at 'F1'
  -- Viability Rating: 'bb-'; RWN maintained
  -- Support Rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'A'

OeVAG

  -- Long-term IDR: affirmed at 'A'; Stable Outlook
  -- Short-term IDR: affirmed at 'F1'
  -- Support Rating affirmed at '1'
  -- Support Rating Floor: affirmed at 'A'
  -- Government guaranteed bonds affirmed at 'AAA'
  -- Market Linked Securities: affirmed at 'Aemr'
  -- Senior unsecured notes: affirmed at 'A'/'F1'

Wiener Spar- und Kreditinstitut rGmbH

  -- Long-term IDR: 'A'; placed on RWN
  -- Short-term IDR: 'F1'; placed on RWN

The other VB-Verbund member banks' Long-term IDRs have been
affirmed at 'A' with Stable Outlook and Short-term IDRs at 'F1'.
The full list of VB-Verbund member banks (in addition to OeVAG
and Wiener Spar- und Kreditinstitut rGmbH) is as follows:

Bank fuer Aerzte und freie Berufe AG
Volksbank Weinviertel e.Gen.
VOLKSBANK OBERES WALDVIERTEL rGmbH
Gaertnerbank, rGmbH
Volksbank Tullnerfeld eG
Volksbank Bad Goisern eingetragene Genossenschaft
Volksbank Osttirol rGmbH
Volksbank Oetscherland eG
Volksbank Fels am Wagram e.Gen.
Volksbank Krems-Zwettl AG
Volksbank Laa eGen
Volksbank Marchfeld e.Gen.
Volksbank, Gewerbe- und Handelsbank Kaernten AG
VOLKSBANK fuer den Bezirk Weiz rGmbH
Volksbank Tirol Innsbruck-Schwaz AG
Volksbank Altheim-Braunau rGmbH
Volksbank Feldkirchen, rGmbH
Volksbank Schaerding eG
Volksbank Steirisches Salzkammergut, rGmbH
VOLKSBANK BADEN e.Gen.
VOLKSBANK OBERKAERNTEN rGmbH
VOLKSBANK VOECKLABRUCK-GMUNDEN e.Gen.
Volksbank Wien AG
Volksbank Enns- und Paltental rGmbH
Volksbank Bad Hall e.Gen.
Volksbank Linz-Wels-Muehlviertel AG
Volksbank Gmuend eingetragene Genossenschaft
Allgemeine Bausparkasse rGmbH
Volksbank Alpenvorland e.Gen.
Waldviertler Volksbank Horn rGmbH
Volksbank Ost rGmbH
Volksbank Kufstein eG
Volksbank Ried im Innkreis eG
Volksbank Enns-St. Valentin eG
Volksbank Friedburg rGmbH
Oesterreichische Apothekerbank eG
Volksbank Voecklamarkt-Mondsee rGmbH
Volksbank Gailtal eG
Volksbank Niederoesterreich Sued eG
Volksbank Oberndorf rGmbH
Volksbank Obersdorf-Wolkersdorf-Deutsch-Wagram e.Gen.
VOLKSBANK GRAZ-BRUCK e.Gen.
Volksbank Muerztal-Leoben e.Gen
Volksbank Eferding-Grieskirchen rGmbH
Volksbank fuer die Sued- und Weststeiermark rGmbH
Volksbank Donau-Weinland rGmbH
Volksbank Salzburg eG
Volksbank Almtal e.Gen.
VOLKSBANK VORARLBERG e.Gen.
VOLKSBANK LANDECK eG
Volksbank Aichfeld-Murboden rGmbH
SPARDA-BANK VILLACH/INNSBRUCK rGmbH
Volksbank Kaernten Sued e.Gen.
IMMO-BANK AG
Volksbank Niederoesterreich-Mitte e.G.
Volksbank Sued-Oststeiermark e.Gen.
Volksbank Suedburgenland rGmbH
SPARDA-BANK LINZ rGmbH
VB Factoring Bank AG
Volksbank-Quadrat Bank AG



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C Y P R U S
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CYPRUS POPULAR: Fitch Cuts Ratings on Covered Bonds to 'BB+'
------------------------------------------------------------
Fitch Ratings has downgraded and placed on Rating Watch Negative
(RWN) Cyprus Popular Bank's (CPB, 'BB+'/RWN/'B') and Bank of
Cyprus's (BoC, 'BB+'/ RWN/'B') Cypriot covered bonds secured by
Greek residential mortgage loans, and placed the Cypriot covered
bonds secured by Cypriot residential mortgage loans on RWN, as
follows:

  -- CPB covered bonds (Programme I): downgraded to 'BB+' from
     'BBB-'; maintained on RWN
  -- CPB covered bonds (Programme II): 'BBB-' placed on RWN
  -- BoC covered bonds (Greek cover pool): downgraded to 'BB+'
     from 'BBB-'; maintained on RWN
  -- BoC covered bonds (Cypriot cover pool): 'BBB-' placed on RWN

The rating actions on the covered bonds secured by Greek
residential mortgage loans follow the downgrade of Greece's
sovereign rating to 'CCC' from 'B-', and the revision of the
Country Ceiling to 'B-' from 'AAA' on May 17, 2012.  With exit
from EMU a material and rising risk, Fitch has revised the
Country Ceiling to 'B-' for Greece, which effectively imposes a
cap on the ratings of all issuers and transactions domiciled in
Greece.

In line with Fitch's covered bonds rating methodology, the Long-
term Issuer Default Rating (IDR) constitutes a floor for the
rating of the covered bonds.  As such, the Cypriot covered bonds
issued by CPB and BoC and secured by Greek residential mortgage
loans have been downgraded to their respective IDRs of 'BB+', and
no uplift for recoveries can be granted.  The covered bonds have
been placed on RWN to reflect the RWN on CPB and BoC's IDRs.

The rating actions on the covered bonds secured by Cypriot
residential mortgage loans follow the placement of CPB and BoC's
IDRs on RWN.  Notably, for both programs the probability of
default (PD) rating of the covered bonds is equalized with the
IDR due to over-collateralization between the cover pool and
covered bonds being insufficient to allow for any uplift on a PD
basis from the IDR of each bank.  As a consequence, any downgrade
of the IDR would result in a corresponding downgrade of the
rating of the associated covered bonds, all else being equal.

The outstanding Cypriot covered bonds represent EUR4.95bn of
Fitch-rated debt on aggregate, including EUR1.75bn of bonds
issued by CPB under Programme I (Greek mortgage pool), EUR1.5bn
of covered bonds issued by CPB under Programme II (Cypriot
mortgage pool), EUR700 million of covered bonds issued by BoC
(Greek mortgage pool) and EUR1 billion of covered bonds issued by
BoC (Cypriot mortgage pool).  The covered bonds under all four
programs are issued under the Cypriot legal covered bond
framework and regulated by the Central Bank of Cyprus.



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D E N M A R K
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* DENMARK: Regional Bank Sector Face More Insolvencies
------------------------------------------------------
Adam Ewing at Bloomberg News, citing Niro Invest Aps, reports
that Denmark's regional bank industry faces more insolvencies,
adding to five since last year, as capital levels remain too low
to survive impairments.

"The banking industry is doing what it can, but we haven't
seen the last crash yet," Bloomberg quotes Nicholas Rohde,
managing director at Denmark-based Niro, which predicted most of
2011's failures, as saying in an interview on Tuesday.  "There
are still some lenders where the capital base is so thin they
will have difficulties in absorbing unforeseen losses."

Standard & Poor's said that Denmark's banks will suffer
writedowns at least as severe as those endured in 2011, Bloomberg
relates.  The rating company estimates total Danish loan losses
swelled to DKK155 billion (US$26.6 billion) in the four years
through 2011, with another DKK30 billion in impairments yet to be
taken, Bloomberg discloses.

Mr. Rohde estimates regional lenders need to cut about 200 of
their 900 branches to catch up with consolidation efforts at
Danske Bank and Nordea Bank AB's Danish unit, Bloomberg states.
He estimates the two have reduced branches by about 35% since
2004, compared with only 15% for regional lenders, according to
Bloomberg.

Of Denmark's four biggest listed banks, Danske has the worst risk
profile, behind Spar Nord Bank A/S, Jyske Bank A/S and Sydbank
A/S, according to the Niro survey, which is based on 2011 annual
report figures, Bloomberg says.  The weakest bank in the survey
was Aarhus Lokalbank A/S, followed by closely-held Basisbank A/S.
Aarhus Lokalbank merged with regional peer Vestjysk Bank A/S, the
seventh-riskiest in Niro's survey, in January, Bloomberg notes.

Mr. Rohde, as cited by Bloomberg, said that Denmark's banking
crisis has created a two-tier financial system with only those
lenders that treat their bad loans seriously set to do well.

"There are really two camps of banks now," Bloomberg quotes
Mr. Rhodes as saying.  "There are those that have taken most of
the credit losses already and those that will continue to see
rising impairments, which they will struggle with."

Meanwhile, the Financial Supervisory Authority is tightening
write-down rules, a measure the regulator says is necessary to
restore confidence in Denmark's banks, Bloomberg says.  The FSA
is also conducting stealth audits to ensure all lenders comply
with the rules, Bloomberg notes.  Banks deemed to be insolvent
usually have just days to find a merger partner or declare
themselves insolvent, Bloomberg states.



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F I N L A N D
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ENCORIUM OY: Encorium Group Unit Seeks Bankruptcy in Espoo
----------------------------------------------------------
Encorium Group, Inc.'s wholly owned operating subsidiary,
Encorium Oy, a company organized under the laws of Finland filed
a voluntary bankruptcy petition to liquidate its assets in the
District Court of Espoo, Finland.  The trustee appointed in the
Bankruptcy's filing was Mr. Lassi Nyyssonen.

In the Schedules of Assets and Liabilities filed by Encorium Oy
with the bankruptcy filing, Encorium Oy reported that, as of the
Petition Date, its total assets were approximately EUR8,500,000
and its total liabilities were approximately EUR11,700,000
million.

In connection with the filings, Encorium Oy has ceased all
business activity and operations.

The Company anticipates it will also file for bankruptcy for
Progenitor Holding AG, a company organized under the laws of
Switzerland.

The bankruptcy filing will cause a default by Encorium Oy on all
outstanding debt obligations.

Concurrent with the bankruptcy filing, all employees of Encorium
Oy have been terminated.

                        About Encorium Group

Encorium Group, Inc., is a clinical research organization that
engages in the design and management of complex clinical trials
for the pharmaceutical, biotechnology and medical device
industries.  The Company was initially incorporated in August
1998 in Nevada.  In June 2002, the Company changed its state of
incorporation to Delaware.  In November 2006, it expanded its
international operations with the acquisition of its wholly-owned
subsidiary, Encorium Oy, a clinical research organization founded
in 1996 in Finland, which offers clinical trial services to the
pharmaceutical and medical device industries.  Since 2006 the
Company has conducted substantially all of its European
operations through Encorium Oy and its wholly-owned subsidiaries
located in Denmark, Estonia, Sweden, Lithuania, Romania, Germany
and Poland.

On July 16, 2009 the Company sold substantially all of the assets
relating to the Company's US line of business to Pierrel Research
USA, Inc., the result of which the Company no longer has any
employees or significant operations in the United States. Due to
this sale, for the three and nine months ended Sept. 30, 2010 and
2009, the results of the U.S. business have been presented as
discontinued operations in the consolidated condensed financial
statements.

The Company reported a net loss of $9.08 million in 2010,
compared with a net loss of US$3.87 million in 2009.  The
Company's balance sheet at Dec. 31, 2010, showed US$7.97 million
in total assets, US$11.73 million in total liabilities and a
US$3.76 million total stockholders' deficit.

Asher & Company, LTD, in Philadelphia, Pennsylvania, noted that
the Company's recurring losses from operations, current available
cash, and anticipated level of capital requirements necessary to
fund its current operations raise substantial doubt about its
ability to continue as a going concern.

As reported by the TCR on Nov. 22, 2011, Encorium notified the
U.S. Securities and Exchange Commission that it could not file
its quarterly report on Form 10-Q for the fiscal quarter ended
Sept. 30, 2011, within the prescribed time period.



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F R A N C E
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CEGEDIM SA: S&P Cuts Corp. Credit Rating to 'B+; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'B+' from 'BB-' its
long-term corporate credit rating on French healthcare software
and services provider Cegedim S.A. The outlook is negative.

"At the same time, we lowered our issue rating on Cegedim's
EUR280 million unsecured notes due 2015 to 'B+' from 'BB-'. The
recovery rating on these notes remains unchanged at '3',
indicating our expectation of meaningful (50%-70%) recovery for
creditors in the event of a payment default," S&P said.

"The downgrade primarily reflects a combination of factors we had
previously flagged as potential triggers for a negative rating
action: free cash flow below EUR40 million and headroom on
covenants of less than 15%," S&P said.

"Cegedim's free cash flow generation was still low in 2011
compared with its debt amortization schedule. Our expectation of
a flat 2012 performance for Cegedim, coupled with still-high
capital expenditures, leads us to believe that its free cash flow
will not reach EUR40 million at year-end 2012," S&P said.

"The downgrade also reflects Cegedim's low headroom under its
financial covenants, below the 15% minimum threshold we would
consider adequate. Consequently, we have revised our assessment
of Cegedim's liquidity to 'less than adequate,' under our
criteria," S&P said.

"We see Cegedim's leverage improving modestly in 2012 from about
4.0x debt to EBITDA and 17% funds from operations (FFO) coverage
of debt, as adjusted by Standard & Poor's, at year-end 2011, to
about 3.7x and 21% at year-end 2012," S&P said.

"The negative outlook reflects the possibility that we could
downgrade Cegedim should liquidity issues arise in the context of
tight covenant headroom and still difficult market conditions.
While we think the group will remain free cash flow positive over
the next 12 months, our expectation of a flat to slightly
positive operating performance, coupled with still important
capital expenditures, is unlikely to push free cash flow
generation close to the EUR40 million debt amortization amount,
in our view. While we acknowledge that Cegedim can use its excess
cash and draw on its revolving credit facility to make debt
repayments, the level of cash generation does not offer
substantial protection from potential liquidity issues once
availabilities are fully drawn," S&P said.

"We could lower the ratings further if Cegedim was not able to
post free cash flow generation closer to its debt repayment level
or to restore a minimum cushion of 15% under its financial
covenants. Also, after the group suspended its dividend this
year, a return to a high payout ratio without a significant
operating recovery would likely negatively affect the ratings,"
S&P said.

"We could revise the outlook to stable if Cegedim was to generate
free operating cash flow sustainably in line with its debt
amortization schedule and to restore comfortable covenant
headroom of above 15%," S&P said.



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G E R M A N Y
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INVENTUX TECHNOLOGIES: Solar Market Price Drop Prompts Insolvency
-----------------------------------------------------------------
Marc Roca at Bloomberg News reports that Inventux Technologies AG
filed for insolvency.

The company, which has 200 employees, said in a statement on
Tuesday it filed for insolvency in Berlin-Charlottenburg's local
court last week and is looking for investors, Bloomberg relates.

Inventux has been affected by the "dramatic" price drop in panels
and can't produce at a breakeven point due to Asian competition
that's "massively subsidized," Bloomberg quotes the company as
saying in the statement.  Rolf Rattunde from the Leonhardt law
firm has been appointed as temporary administrator, Bloomberg
discloses.

"The prices on the solar market are currently so low that an
economically reasonable price policy does not exist any more, it
can actually only get better," Mr. Rattunde, as cited by
Bloomberg, said.  "Therefore, Inventux offers good opportunities
for investors who look to the long term."

Inventux Technologies AG is a manufacturer of silicon-based,
thin-film photovoltaic panels based in Berlin, Germany.



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H U N G A R Y
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MALEV ZRT: Former Employees Conduct Protests Over Benefits
----------------------------------------------------------
MTI-Econews reports that hundreds of former employees of bankrupt
Malev staged a demonstration at the National Development ministry
over their and the airline's situation on Tuesday.

According to MTI-Econews, representatives of their unions handed
over a petition to a ministry official, demanding an explanation
from the development minister, the government and parliamentary
parties about the situation that had developed around Malev.

The unions also demand payment of all due remuneration and
benefits and the government's assistance in helping the more than
2,000 families affected by the Malev bankruptcy, MTI-Econews
discloses.

Csaba Demeter, the deputy chairman of the pilots' union Hunalpa,
told the demonstrators that the ministry official gave them
assurance that the ministry would make every effort to resolve
the sitation, MTI-Econews notes.

The Hungarian airline cancelled all it flights and terminated
operation on February 3 due to financial difficulties, MTI-
Econews recounts.  The airline company is currently undergoing a
liquidation process, MTI-Econew says.

Malev is Hungary's national air carrier.



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I R E L A N D
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BACCHUS 2006-1: S&P Raises Rating on Class E Notes to 'CCC+'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
BACCHUS 2006-1 PLC's class B, C, D, and E notes. "At the same
time, we affirmed our ratings on the class A-1A, A-2A, and A-2B
notes," S&P said.

"BACCHUS 2006-1 is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The rating actions follow our
assessment of the transaction's performance, and the application
of our relevant criteria for transactions of this type," S&P
said.

"For our review of the transaction's performance, we used data
from the trustee payment date report (dated April 2, 2012), in
addition to our credit and cash flow analysis. We have considered
recent transaction developments, and have applied our 2010
counterparty criteria and our cash flow CDO criteria," S&P said.

"From our analysis, we have observed an increase in the
performing assets in the collateral portfolio. There are no
defaulted assets, and we have observed a decline in the
proportion of assets in the collateral portfolio that we consider
to be rated in the 'CCC' category ('CCC+', 'CCC', or 'CCC-')
since we previously reviewed the transaction. This, among other
things, has resulted in a decrease in the scenario default rates
at each rating level," S&P said.

"In the same period, we have also observed increased weighted-
average spread earned on the collateral portfolio. All par value
tests now comply with their minimum triggers, whereas the par
value tests for the class C, D, and E notes were failing at our
previous review," S&P said.

"Currently, none of the notes are deferring interest. The issuer
has repaid the capitalized interest on the class C, D, and E
notes since our last review. The issuer has made principal
payments on the class A-1A and A-2A notes to cure par value tests
since our previous review. This, among other things, has resulted
in an increase in the available credit enhancement for all of the
classes of notes," S&P said.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rate. In our
analysis, we used the reported portfolio balance that we
considered to be performing, the principal cash balance, 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 various
default patterns, levels, and timings for each liability rating
category, in conjunction with different interest rate stress
scenarios," S&P said.

"In our opinion, the documents for the portfolio asset swaps do
not fully comply with our 2010 counterparty criteria. Therefore,
in our cash flow analysis for ratings that are more than one
notch above our issuer credit rating on the relevant
counterparties, we also considered potential scenarios where the
swap counterparties fail to perform, and where the transaction is
exposed to greater currency risk as a result," S&P said.

"Taking into account our credit and cash flow analysis, and our
2010 counterparty criteria, we consider the credit enhancement
available to the class B, C, D, and E notes in this transaction
to be commensurate with higher ratings than we previously
assigned. We have therefore raised our ratings on these classes
of notes," S&P said.

"We consider the credit enhancement available to the class A-1A,
A-2A, and A-2B notes to be commensurate with our current ratings.
We have therefore affirmed our ratings on these classes of
notes," S&P said.

"The application of our largest obligor default test constrained
our ratings on the class D and E notes. This test is a
supplemental stress test that we introduced in our 2009 criteria
update for corporate collateralized debt obligations. At our
previous review, the application of our largest obligor default
test constrained our ratings on the class C, D, and E notes at
lower rating levels, even though the results of our cash flow
analysis showed that these notes were passing at higher ratings,
particularly the class D notes," S&P said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

       http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class          Rating
         To               From

BACCHUS 2006-1 PLC
EUR400 Million Senior Secured and Deferrable Floating-Rate Notes

Ratings Raised

B        A+ (sf)          BBB+ (sf)
C        BBB- (sf)        B+ (sf)
D        B+ (sf)          CCC- (sf)
E        CCC+ (sf)        CCC- (sf)

Ratings Affirmed

A-1A     AA- (sf)
A-2A     AA+ (sf)
A-2B     AA- (sf)


EIRCOM GROUP: High Court Approves Five-Year Survival Scheme
-----------------------------------------------------------
Mary Carolan at The Irish Times reports that a five-year survival
scheme for Eircom approved by the High Court will see it and
related companies exit the State's biggest examinership on
June 11.

The Irish Times relates that Mr. Justice Peter Kelly said on
Tuesday he was satisfied to confirm the scheme advocated by
Michael McAteer, the examiner to Eircom Ltd., Meteor Mobile
Communications and Irish Telecommunications Investments Ltd.,
"and endorsed by most of its creditors".

The scheme would safeguard most of the jobs of the workforce of
almost 6,000 people and he was told there would be no job losses
above some 1,000 to be achieved via a program of voluntary
redundancies to be implemented over the coming years, the Irish
Times discloses.

He was satisfied to approve a business plan and restructuring
proposals aimed at reducing the companies' crippling indebtedness
to EUR2.35 billion from EUR4 billion and with the added advantage
of securing their future over five years, the Irish Times notes.

According to the Irish Times, he noted that a line of credit was
also to be made available by the companies' secured lenders and
the companies had some EUR22 million cash ahead of projected
figures at this stage.

Based on the evidence, he was satisfied the scheme was of benefit
to the companies, their employees and the State arising from the
strategic importance of Eircom, the Irish Times states.

He was also satisfied the scheme did not unfairly prejudice any
class of creditors as those unsecured creditors who would get
nothing under the scheme would also have got nothing in a
liquidation scenario, the Irish Times says.

The scheme will involve first lien creditors, owed EUR2.7
billion, and swop creditors taking a cut of 15% on their debt and
second lien creditors taking a cut of 90%, the Irish Times
discloses.

The restructuring proposals will involve the secured creditors
taking over the equity of the companies via a structure of
companies, according to the Irish Times.  The EUR350 million
debts of FRN (floating rate noteholders) will be wiped out, the
Irish Times notes.

Headquartered in Dublin, Ireland, Eircom Group --
http://www.eircom.ie/-- is an Irish telecommunications company,
and former state-owned incumbent.  It is currently the largest
telecommunications operator in the Republic of Ireland and
operates primarily on the island of Ireland, with a point of
presence in Great Britain.


WORLDSPREADS PLC: 15,000 Clients Covered by Compensation Scheme
---------------------------------------------------------------
Barry O'Halloran at The Irish Times reports that almost all
15,000 clients of Worldspreads are covered by a compensation
scheme operated by its UK regulator.

Worldspreads collapsed in March when the board discovered a GBP13
million (EUR16.15 million) shortfall in client funds in its main
operating business, London-based Worldspreads Ltd., the Irish
Times recounts.  The company owed its clients GBP29.7 million but
had just GBP16.6 million to pay them, the Irish Times discloses.

The financial services compensation scheme covers losses up to
GBP50,000, the Irish Times says.

Worldspreads owed about 80 clients more than GBP50,000, according
to the Irish Times.  In their case, the compensation scheme will
pay them GBP50,000, and they will be able to recover a portion of
the balance from a pool established by the special administrators
who took over the company in March, the Irish Times states.

The pool, the Irish Times says, will be established from the
company's remaining resources and those clients will be repaid on
a pro-rata basis.  In other words, if the pool covers 50% of the
company's liabilities, they will be paid 50% of the figure due to
them above GBP50,000, the Irish Times notes.

Irish-based Worldspreads plc is a financial spread-betting firm.



=================
L I T H U A N I A
=================


SNORAS BANK: British Court Orders Arrest of Antonov's Property
--------------------------------------------------------------
RIA Novosti reports that a British court has ordered the arrest
of property belonging the former majority shareholder of the
Lithuania's Bankas Snoras, Vladimir Antonov, in connection with
the disappearance of EUR493 million.

The Supreme Court of England and Wales ruled on May 18 that the
property which is both directly and indirectly owned by Mr.
Antonov, including securities of companies he owns, bank accounts
and other property entrusted to banks, is subject to arrest, RIA
Novosti recounts.  Mr. Antonov may appeal the court decision, RIA
Novosti notes.

The Prosecutor General of Lithuania in early May reduced the
amount of embezzlement of which the former owners of Snoras are
accused to LTL300 million (EUR86 million), RIA Novosti, citing
Lithuanian newspaper Verslo zinios.  Currently residing in
London, major shareholders Raimundas Baranauskas and Mr. Antonov,
are accused of embezzling LTL700 million (EUR202 million)
compared with the earlier claim of LTL987 million (EUR285
million), RIA Novosti discloses.

The Chairman of the Bank of Lithuania, Vitas Vasiliauskas says
that prosecutors are now suing for LTL700 million, despite the
Bank of Lithuania declaring that property worth more than
LTL9.9 billion has been lost, because it was necessary to
separate the trial of civil suits against the owners of the bank,
and the bankruptcy process, RIA Novosti notes.

On November 16, 2011, the Lithuanian government nationalized
Snoras bank to save it from bankruptcy, RIA Novosti relates.  The
court decision on Snoras bankruptcy was taken on December 7 and
came into force on December 20, 2011, RIA Novosti recounts.

Bankas Snoras AB is Lithuania's fifth biggest lender.  Snoras
held LTL6.05 billion in deposits and had assets of LTL8.14
billion at the end of September.  It competes with Scandinavian
lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB.  It
also controls investment bank Finasta and Latvian lender Latvijas
Krajbanka AS.


===================
L U X E M B O U R G
===================


MONIER GROUP: Fitch Affirms 'B' Long-Term Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has affirmed Monier Group S.a.r.l's Long-term
Issuer Default Rating (IDR) at 'B' with a Stable Outlook.
Fitch has also withdrawn the expected ratings on Monier's
EUR433 million term loan due 2017 and Monier's EUR150 million
super senior revolving credit facility (RCF) due 2017.

The agency has also withdrawn the expected rating on Monier Bond
Finance & CO S.C.A's proposed EUR250 million senior secured notes
due 2019.  In accordance with Fitch's policy, the expected
ratings have been withdrawn because the notes were not issued.

At the same time, the agency has published Monier's existing
EUR150 million super senior RCF due in installments in 2012 and
2014 rating of 'BB' with a Recovery Rating of 'RR1' and Monier's
existing EUR683 million senior secured facilities due 2015 rating
of 'B+' with a Recovery Rating of 'RR3'.

Monier's IDR reflects its leading position in the European
pitched roofing market, where the company occupies the number one
position in concrete tiles (37% of FY11 sales) and has further
leading positions in clay tiles (21%), chimneys (14%) and roofing
components (21%).  The rating is supported by the fact that
Monier's sales are equally split between new build and
renovation, which has helped the company's recovery since its
debt restructuring in 2009.  In addition, Monier has a good
geographic footprint, underpinned by its core German market (25%
of FY11 sales) its lack of exposure to periphery euro countries
and MENA regions and its growing presence in Asia (7%).

Liquidity is sufficient and supported by the company's high
unrestricted cash balance of EUR225 million at FY11 and full
availability under the EUR150 million RCF, which provides
additional flexibility at the 'B' rating level.  However, the
availability of the RCF will fall to EUR105 million in October
2012.

The IDR is primarily constrained by the leveraged capital
structure, which resulted in FFO adjusted leverage of 6.0x (4.3x
net) in 2011, which is considered relatively high for a building
materials company of this size with exposure to cyclical
construction markets.  With only moderate improvements in EBITDA
expected over the next two years as well as higher capex and on-
going restructuring costs, gross deleveraging is expected to be
limited as is free cash flow generation.

Using conservative assumptions under Fitch's Recovery Ratings
methodology, with a 20% discount to EBITDA applied to the
company's FY11 reported EBITDA of EUR168 million and a distressed
enterprise value/EBITDA multiple of 5x, the agency's analysis
results in superior recovery prospects (91%-100%) for the super
senior RCF and above average-average recovery prospects (51%-70%)
for the senior secured term loan.

The current rating headroom is sufficient for a Stable Outlook,
but Fitch does not expect any positive rating action at least for
the next 12-18 months, while the global construction markets
remain subdued.  Underperformance of Fitch's expectations, which
prevents the company from deleveraging to the extent FFO adjusted
leverage remains above 6.0x on a continued basis and free cash
flow generation becomes neutral or negative, is likely to put
downward pressure on the IDR.

In its analysis, Fitch has excluded Monier Holdings SCA's EUR332
million purchaser loan facility (PIK Loan) from leverage metrics.
Monier Holdings SCA is a holding company outside the Monier
restricted group of companies and the PIK loan is PIK for life,
unsecured and unguaranteed.  There is also no reference to the
PIK issuer in any covenants or event of default of Monier debt
instruments.  Therefore, Fitch considers that the PIK notes do
not increase the risk of a default of Monier.



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


SENSATA TECHNOLOGIES: Moody's Upgrades Corp. Family Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service upgraded all of Sensata Technologies
B.V. credit ratings by one notch and affirmed the SGL-1
Speculative Grade Liquidity rating. The Corporate Family Rating
and Probability of Default Rating were upgraded to Ba3 from B1.
The rating outlook was changed to stable from positive.

Ratings Rationale

The ratings upgrade for Sensata reflects the company's strong
credit metrics and expected good margins with free cash flow to
debt over 12% for 2012. Moody's expects the company to end 2012
with Debt to EBITDA below 3.0 times, and EBITA to interest
coverage to be over 4.5 times on a Moody's adjusted basis. The
ratings benefit from a broad geographic reach in the sensor and
control markets and increasing product content in new vehicles
and other applications. The ratings however, are constrained by
the weakness in Europe, the risk of slower than expected growth
in the U.S., and the potential for large debt financed
acquisitions.

Upgrades:

$250M revolver due 5/12/16, to Ba2 (LGD2, 28%) from Ba3 (LGD3,
30%)

$1.1B Sr Sec Term due 5/12/18, to Ba2 (LGD2, 28%) from Ba3 (LGD3,
30%)

$700M Sr Note due 5/15/19, to B2 (LGD5, 83%) from B3 (LGD5, 86%)

Affirmations:

SGL-1

Outlook:

The ratings outlook is stable.

The company's Speculative Grade Liquidity Rating was affirmed at
SGL-1, reflecting Moody's view that the company is expected to
continue to have very good liquidity. Liquidity benefits from
strong positive cash flow, significant revolver availability and
good cushion under its financial covenants.

The stable outlook reflects Moody's expectations for continued
positive revenue growth driven by the continued recovery in the
U.S. Automotive market, trend toward increased content from
automotive clients and good operating margins (mid teens) will
help balance the anticipated challenging environment in Europe.
While these factors are expected to yield slow improvement in the
company's credit metrics over the next year, the company's
metrics have already rebounded to a level consistent with the Ba3
rating.

The company is unlikely to experience additional upward rating
traction over the next year due to the weakness seen in its
control's business, which accounted for approximately 29% of the
company's 2011 revenue, and uncertainty surrounding additional
acquisitions. Nevertheless, positive traction could occur if
there was a significant trend towards improving margins,
sustainable debt to EBITDA below 3.0 times and EBITA to interest
coverage estimated to be over 4.0 times on a sustainable basis.
Also important to positive rating traction is maintenance of its
strong liquidity profile including effective working capital
management.

The ratings outlook could come under pressure if the controls
business and or if the European business is weaker than
anticipated. The rating could be downgraded if the company's
leverage (debt to EBITDA) was to increase to over 4.0 times, or
if its free cash flow to debt was anticipated to be below 7.0%,
both on a sustained basis.

The principal methodology used in rating Sensata was the Global
Manufacturing Industry Methodology, published December 2010.
Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.

Sensata Technologies B.V., incorporated under the laws of The
Netherlands and with U.S. headquarters in Attleboro,
Massachusetts, is a global designer, manufacturer, and marketer
of customized and highly-engineered sensors and control products.
Revenues for the LTM period ended March 31, 2012 totaled
approximately $1.9 billion.


ST. JAMES PARK: S&P Raises Rating on Class E Notes to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
St. James's Park CDO B.V.'s class A1, A2, B, C, D, and E notes,
as well as its Revolving Loan Facility.

"For our review of the transaction's performance, we used data
from the trustee reports dated March and April 2012, in addition
to our cash flow analysis. We have taken into account recent
developments in the transaction, and have applied our 2010
counterparty criteria, as well as our cash flow CDO criteria,"
S&P said.

"Since our last review in June 2010, we have observed a slight
negative rating migration in the underlying portfolio. For
example, the proportion of 'CCC' rated assets has increased by
about 0.22%, and now comprises 5.08% of the portfolio, versus
4.86% in June 2010," S&P said.

All coverage tests are currently in compliance.

"Other positive findings in our analysis include a decrease in
the weighted-average life to 3.75 years from 5.20 years, and an
increase in the weighted-average spread to 3.41% from 3.08%," S&P
said.

"We subjected the transaction's capital structure to a cash flow
analysis to determine the break-even default rate for each rated
class, at each rating level. We used the portfolio balance that
we consider to be performing (EUR280 million), the reported
weighted-average spread (3.41%), and the weighted-average
recovery rates that we consider to be appropriate. We
incorporated various cash flow stress scenarios using our
standard default patterns, levels, and timings for each rating
category assumed for each class of notes, in conjunction with
different interest rate stress scenarios," S&P said.

"Therefore, in accordance with our analysis, we have raised our
ratings on the class A1, A2, B, C, D, and E notes, as well as the
Revolving Loan Facility, to levels that reflect the portfolio's
credit quality and the transaction's performance, in our
opinion," S&P said.

"St. James's Park CDO is a cash flow collateralized loan
obligation (CLO) transaction backed primarily by leveraged loans
to speculative-grade corporate firms. The transaction closed in
December 2007, and is managed by Blackstone Debt Advisors L.P.,"
S&P said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

       http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                              Rating
                          To                   From

St. James's Park CDO B.V.
EUR400 Million Floating-Rate Notes

Ratings Raised

A1                        AAA (sf)             AA+ (sf)
RLF                       AAA (sf)             AA+ (sf)
A2                        AAA (sf)             AA- (sf)
B                         AA+ (sf)             A (sf)
C                         A (sf)               BBB- (sf)
D                         BB+ (sf)             B+ (sf)
E                         B+ (sf)              CCC+ (sf)

RLF-Revolving Loan Facility.


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


* CITY OF LISBON: Moody's Withdraws 'Ba3' LT Issuer Rating
----------------------------------------------------------
Moody's Investors Service has withdrawn the Ba3 long-term issuer
rating with negative outlook assigned to the City of Lisbon.

RATING RATIONALE

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

Lisbon is the political, business and cultural center of
Portugal. The population is currently 547,300, accounting for
5.3% of Portugal's population. The city's economy is
predominantly service oriented and has the highest GRP per capita
within Portugal.



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


BBVA LEASING: Fitch Affirms Rating on Class C Notes at 'Csf'
------------------------------------------------------------
Fitch Ratings has affirmed BBVA Leasing 1 FTA's ratings, as
follows:

  -- EUR750.0m class A1 notes: affirmed at 'BBsf'; Outlook Stable
  -- EUR1.606.2m class A2 notes: affirmed at 'BBsf'; Outlook
     Stable
  -- EUR82.5m class B notes: affirmed at 'CCCsf', RE80%
  -- EUR61.3m class C notes: affirmed at 'Csf', RE0%

The affirmations and Stable Outlooks reflect that the
transaction's performance remains in line with its outstanding
ratings, which are below investment grade, even for the senior
notes.  Credit enhancement for the class A notes has increased
due to the sequential payment structure.  However, the class C
notes are very likely to incur losses since the principal
deficiency (PDL) amounts to almost two-thirds of the original
balance.  Moreover, the agency does not consider it likely that
recoveries and excess spread will be able to cure this.

Both cumulative losses and cumulative defaults are above the
agency's expectations at closing. As at March 2012, the Fitch
cumulative default ratio was 3.5% and the Fitch cumulative loss
ratio was 3.0%, compared with the original base case of 2.0% and
1.6%.

These defaults led to withdrawals of the cash reserve fund, which
was originally EUR41.3 million (1.65% of the original balance)
and has been fully drawdown since April 2010.  In addition,
losses continue to increase the PDL, which amounted to EUR41.6
million on the last interest payment date of March 2012.  The
notes have amortized sequentially since and the class A notes
(the only ones that have started to amortize) have repaid 83% of
the initial balance to date.

BBVA Leasing 1 FTA is a true sale securitization of a pool of
leasing contracts (real estate leases and chattel finance leases)
originated by Banco Bilbao Vizcaya Argentaria S.A. (BBVA; the
seller, servicer, account bank, paying agent and swap provider;
'A'/Negative/F1') and extended to non-financial small- and
medium-enterprises (SMEs) domiciled in Spain.


METALLURGICAL COMMERCIAL: Moody's Upgrades Debt Ratings to 'B2'
---------------------------------------------------------------
Moody's Investors Service has upgraded the long-term local and
foreign currency deposit ratings and long-term local currency
debt ratings of Metallurgical Commercial Bank (Metcombank) to B2
from B3. The bank's Not Prime short-term local and foreign
currency deposit ratings and the E+ standalone bank financial
strength rating (BFSR) remained unchanged, although the BFSR now
maps to a standalone credit assessment of b2 (formerly mapping to
b3). The outlook on the long-term ratings and the BFSR is stable.

Ratings Rationale

According to Moody's, the upgrade of Metcombank's long-term
ratings is driven by (i) continued diversification of the bank's
business profile reflected in the increasing number of products
and clients in its retail portfolio (mainly auto loans), and
improvements in its regional coverage; (ii) a significant decline
of related-party lending; (iii) a track record of adequate
financial performance in the recent years and (iv) the rating
agency's expectations of further improvement in diversification
of the bank's funding base and loan portfolio.

Since 2009, Metcombank has been implementing its strategy related
to diversification of its business. During 2011, the retail
portfolio (predominantly auto loans) recorded a three-fold
increase, year-on-year, and accounted for 61% the total loan book
as at year-end 2011. Moody's observes that the level of
Metcombank's related-party lending to Russia's largest steel
producer -- Severstal Group -- declined significantly during the
past three years. The level of related-party lending in 2011
(according to audited IFRS) decreased to 31% of Tier 1 and 4% of
the loan book (2010: 58% and 10%, respectively, and 2009: 78% and
20%, respectively). In addition, 28% of related-party loans were
collateralised by related-party deposits, which mitigates the
credit risk.

In recent years, the bank demonstrated adequate financial
performance. Metcombank's profitability was supported by
increased net interest margin of 6.8% in 2011 (2010: 5.2%),
mainly as a result of the performance of high-yield credit
products; however, profitability was negatively affected by
revaluation of securities, growing loan loss provision charges
and higher operating expenses. Going forward, Moody's believes
that the bank's profitability will continue to be negatively
affected by increasing loan loss provision charges. The bank's
total capital adequacy ratio stood at 11.6% as at 1 May 2012
(according to Russian Accounting Standards). A new capital
increase of RUB700 million in the form of a subordinated loan was
injected in the first half of 2012. Moody's notes that taking
into account Metcombank's growth plans, the bank will need
further capital injections to maintain a sufficient level capital
adequacy. The aforementioned capital increase is expected to come
either from the International Financial Corporation (which plans
to acquire around 10% of Metcombank's capital) or from the bank's
shareholder.

Metcombank's asset quality is adequate to date, with problems
loans (defined as impaired and restructured) accounting for 4.5%
of the gross loan book at year-end 2011. However, Moody's
cautioned that -- in the context of such rapid loan book growth
in recent years -- higher risks could be revealed as the new loan
book (generated in 2010 and 2011) starts to season, which is
likely to result in an increase both in the level of problem
loans and in the loan loss provision coverage, thus exerting
negative pressure on the bank's asset quality and profitability
indicators.

Despite the declining trend of related-party funding in 2011,
Metcombank's reliance on funds from Severstal Group still remains
considerable (59% of total non-equity funding as at year-end 2011
(according to IFRS), and an average ratio of 65% of total non-
equity funding -- taking into account fluctuation of funds from
Severstal group in 2011). The volatility of these funds exerts
negative pressure on Metcombank's liquidity position thereby
rendering the bank vulnerable to the substantial withdrawal of
funds. This situation is somewhat mitigated by (i) the long-
standing close business relationship between Metcombank and
Severstal Group, which have an agreement whereby Severstal Group
seeks to maintain a minimum balance on its deposit and current
accounts amounting to RUB5 billion and RUB2 billion,
respectively, and (ii) sufficient amount of liquid assets that
the bank maintains its balance sheet.

Upward pressure could be exerted on Metcombank's B2 long-term
ratings as a result of (i) its ability to diversify its funding
base away from the largest related-party depositor, (ii) further
improvements in diversification of its business profile that will
enable the bank to improve its market shares, and (iii) the
bank's ability to maintain good financial indicators --
especially in asset quality, in the context of a rapidly growing
retail loan book. Negative pressure could be exerted on the
bank's ratings due to an increase in related-party and single-
name concentrations and/or weakening of the bank's asset quality
and capitalization.

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.

Headquartered in the City of Cherepovets, North-West region of
Russia, Metcombank reported total audited IFRS assets of RUB25
billion (US$778 million) and net income of RUB170 million (US$5.3
million) as at year-end 2011.


MY BANK: Moody's Withdraws 'Ba2' Long-Term National Scale Rating
----------------------------------------------------------------
Moody's Interfax has withdrawn the Ba2.ru long-term national
scale rating (NSR) of My Bank (Russia). The NSR carries no
specific outlook.

Ratings Rationale

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

The rating withdrawal does not reflect a change in the bank's
creditworthiness.

Headquartered in Moscow, Russia, My Bank reported unaudited total
(local GAAP) assets of US$671 million as of end-December 2011.

The ratings are Moody's Interfax Rating Agency's National Scale
Ratings (NSRs) which are intended as relative measures of
creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative
risks. NSRs differ from Moody's global scale ratings in that they
are not globally comparable with the full universe of Moody's
rated entities, but only with NSRs for other rated debt issues
and issuers within the same country. NSRs are designated by a
".nn" country modifier signifying the relevant country, as in
".ru" for Russia.

ABOUT MOODY'S AND MOODY'S INTERFAX

Moody's Interfax Rating Agency (MIRA) specializes in credit risk
analysis in Russia. MIRA is a joint-venture between Moody's
Investors Service, a leading provider of credit ratings, research
and analysis covering debt instruments and securities in the
global capital markets, and the Interfax Information Services
Group. Moody's Investors Service is a subsidiary of Moody's
Corporation (NYSE: MCO).


MY BANK: Moody's Withdraws 'E' Bank Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn the following ratings of
My Bank (Russia): E standalone Bank Financial Strength Rating
(BFSR), which mapped to standalone credit assessment of caa1;
Caa1 long-term local and foreign currency deposit ratings; Caa1
local currency debt rating; and Not-Prime short-term local and
foreign currency deposit ratings.

Prior to the ratings withdrawal, My Bank's BFSR and long-term
debt and deposit ratings carried a stable outlook.

Ratings Rationale

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

The rating withdrawal does not reflect a change in the bank's
creditworthiness.

Headquartered in Moscow, Russia, My Bank reported unaudited total
(local GAAP) assets of US$671 million as of end-December 2011.



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


BANKIA SA: Spain to Provide EUR9-Bil. to Cover Provisioning Needs
-----------------------------------------------------------------
Christopher Bjork at Dow Jones Newswires reports that the Spanish
government will provide about EUR9 billion (US$11.4 billion) to
cover Bankia SA's provisioning needs.

According to Dow Jones, Finance Minister Luis de Guindos told
legislators in Parliament on Wednesday that since Bankia won't be
able to meet provisioning and capital needs, Spain's Fund for
Orderly Bank Restructuring will be ready to inject capital into
Bankia's unlisted parent company, Banco Financiero y de Ahorros
SA, which holds the company's most toxic real-estate asset.

At stake is the future of Spain's third largest bank by assets,
which controls roughly 10% of the country's loans and deposits
and was rescued by the government two weeks ago, Dow Jones notes.

The clean-up of Bankia has long been seen as a crucial test of
Spain's resolve to put its financial house in order, Dow Jones
says.  Bankia has the industry's largest exposure to Spanish
real-estate developers, with EUR37.52 billion in loans to the
sector, EUR17.85 billion of which are considered problematic, Dow
Jones discloses.

Mr. de Guindos, as cited by Dow Jones, said the government will
seek to sell Bankia once the bank is cleaned up, as part of a
strategy to restore investor confidence in the sector.  Another
option, he later told reporters, would be to combine Bankia with
three other bailed-out banks into a huge state-owned lender, Dow
Jones relates.

Bankia SA accepts deposits and offers commercial banking
services.  The Bank offers retail banking, business banking,
corporate finance, capital markets, and asset and private banking
management services.


GAT FTGENCAT: Fitch Affirms Junk Ratings on Two Note Classes
------------------------------------------------------------
Fitch Ratings has affirmed GAT FTGENCAT 2006, FTA's notes and
revised the Outlooks on the series A2(G) and B notes, as follows:

  -- Series A2(G) (ISIN ES0341097014) affirmed at 'Asf'; Outlook
     revised to Stable from Negative

  -- Series B (ISIN ES0341097022) affirmed at 'Asf'; Outlook
     revised to Stable from Negative

  -- Series C (ISIN ES0341097030) affirmed at 'BBsf', Outlook
     Negative

  -- Series D (ISIN ES0341097048) affirmed at 'CCsf'; Recovery
     Estimate RE 35%

  -- Series E (ISIN ES0341097055) affirmed at 'Csf'; Recovery
     Estimate RE 0%

Fitch has capped the series A2(G) and series B notes' rating at
'Asf', reflecting the agency's concerns about the transaction's
potential exposure to commingling and payment interruption risk.
The Stable Outlook on series A2(G) and series B reflects the
notes' increased credit enhancement (CE) due to structural
deleveraging, which allows the notes to withstand the agency's
'AAAsf' and 'AA+sf' stress scenarios, respectively.  The series
A2(G)'s structural CE stands at 39.4% while Series B's structural
CE is 33.2%.

The transaction's portfolio is originated and serviced by Caixa
d'Estalvis de Catalunya (Catalunya Banc), which is unrated.  The
agency considers that the transaction may be exposed to
commingling and payment interruption risk in the absence of any
other sources of liquidity apart from the reserve fund, which may
mitigate the temporary loss of liquidity following a hypothetical
default of Catalunya Banc.  The reserve fund has been below its
required amount of EUR9.5 million since September 2008, reaching
its lowest amount of EUR647,000 in May 2011, and currently is
significantly underfunded at EUR1.6 million.

The Negative Outlook on the Series C notes reflects that high
obligor, regional and industry concentration may increase the
sensitivity of the notes to a deterioration in portfolio credit
quality.

As of the March 2012 investor report, the transaction's portfolio
had amortized to EUR81 million or 18.4% of the initial balance,
with cumulative defaults standing at EUR18.6 million or 4.2% of
the initial portfolio balance.  In addition, loans more than 90
days past due have been continuously above 1% of the outstanding
balance since December 2010 and currently amount to EUR2.7
million or 3.3% of portfolio's balance.  The portfolio has
significant obligor concentration as the top 1 obligor and top 40
obligors account for 2.2% and 39% of portfolio outstanding
balance, respectively.

The transaction is a cash flow securitization of an initial
static pool of EUR440 million of 6,922 loans to Spanish small and
medium enterprises (SMEs) originated and serviced by Catalunya
Banc.



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


SAAB AUTOMOBILE: Receivers Halt Sale Negotiations with Youngman
---------------------------------------------------------------
Christina Zander at Dow Jones Newswires, citing Swedish Radio,
reports that the receivers in charge of bankrupt Saab Automobile
AB's estate are no longer negotiating a potential sale of the
Swedish car maker's assets with Chinese car maker Zhejiang
Youngman Lotus Automobile Co.

According to Dow Jones, a source familiar with the matter, as
cited by Swedish Radio, said a sale of the assets is expected to
be finalized next week, but who the buyer will be isn't yet
known.

Mahindra & Mahindra Ltd. is one of the companies interested in
the assets, Dow Jones says, citing reports in the Swedish media.

Swedish car maker Volvo Car Corp., owned by Zhejiang Geely
Holding Group, has also said it is interested in buying some of
Saab Automobile's machinery and test equipment, Dow Jones
relates.

Saab Automobile and units Saab Automobile Tools and Saab
Automobile Powertrain have been in the hands of court-appointed
receivers since the company was declared bankrupt in December,
nine months after it halted production due to a lack of funds,
Dow Jones notes.

Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.



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


RAILWAYS TRANSPORT: Fitch Assigns 'B' ST Foreign Currency Rating
----------------------------------------------------------------
Fitch Ratings has assigned the State Administration of Railways
Transport of Ukraine (Ukrzaliznytsia) (UZ) Long-term foreign and
local currency ratings of 'B-', a National Long-term rating of
'BBB+(ukr)' and a Short-term foreign currency rating of 'B'.  The
Outlooks for the Long-term ratings are Stable.

UZ's ratings reflect the company's key role in the management of
the national railways system and its strong legal, strategic and
operational links with the Ukrainian government, which has
approval powers on all strategic decisions, including tariff
setting, investment and debt planning.  Although UZ is the sole
rated entity, its ratings also factor in the opacity of links
with railways companies it manages and contingent risk stemming
from the liabilities of those railways companies.

Fitch notes that weaker links with or a lack of prompt government
support in case of need could lead to a rating downgrade.
Conversely, clearer links with operating railways companies in a
context of forthcoming sector reform along with more formalized
state support could be positive for the ratings.

UZ's mandate is to manage the six state-owned regional operating
railways companies and a number of auxiliary enterprises (UZ
Group). Although there are no legal ownership ties with these
companies, UZ acts as a Group's management company.  It controls
most of the Group's financial flows and sets debt policy of the
Group, and, in its capacity of group manager, signed certain loan
agreements jointly with borrowing operating entities.  The
government plans to streamline this complex structure grouping UZ
and the six railways operators under a new 100% state-owned joint
stock company as part of the reform process during 2012-2013.

UZ Group is one of the largest state monopolies, one of the major
national taxpayers and the largest employer.  It also plays a
crucial role in the Ukrainian economy development as it manages
72% of total cargo traffic.  The profitable freight business
allows national government to cross-subsidize the loss-making --
but politically and socially sensitive -- passenger segment.
Fitch believes the government's grip over UZ Group will be
unchanged after the completion of reform.

Leveraging on its profitable freight business, with Fitch
estimated EBITDA at UAH12.3bn in 2011, UZ Group plans to
moderately re-leverage its balance sheet to fund its UAH53bn
cumulative investments in 2012-2016 for the upgrade of the
railway network and rolling stocks.  Debt to EBITDA ratio should
remain comfortably below 2.5x unless higher-than-expected
economic slowdown causes an unexpected drop in traffic volumes
and.  as consequences, revenue and cash flow decline.  To support
its large capex program, UZ Group plans to increase tariffs by
35% in 2012-2016.  However Fitch believes that long term
visibility on tariff increase is limited as, in the past, the
government unexpectedly frozen tariffs for freight (in 2009-2010)
and passengers (2010-2011).

UZ's balance sheet is free of debt. However, at the group level,
the long-term nature of its asset structure does not fit well
with the short-term nature of its debt, about 40% of which
matures within one year.  In 2009, railway operating companies
missed a repayment on a bank loan totaling US$110 million, with
terms subsequently rescheduled in 2010 by means of obtaining
lenders' consent to restructure the loan.  Additionally several
covenants under long-term loan agreements of operating companies
were breached.  However, the company has obtained respective
waivers from the lender.

Group liquidity is tight as cash and undrawn facilities cover
only 70% of the remaining debt maturities (UAH4.8 billion) in
2012 and UAH2.7 billion negative free cash flow expected by Fitch
during 2012.  In this context, stable access to banks and capital
markets is essential for UZ Group, although the existing capex
flexibility mitigates the risk.


UKRAINIAN RAILWAYS: S&P Assigns 'B-' LT Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to 100% state-owned rail infrastructure
manager and operator The State Administration of Railways
Transport of Ukraine (Ukrainian Railways). The outlook is
positive.

"The rating reflects our view that there is a 'very high'
likelihood that the government of the Ukraine (B+/Negative/B
national scale rating uaA+) would provide timely and sufficient
extraordinary support to Ukrainian Railways in the event of
financial distress. It is also based on the company's stand-alone
credit profile (SACP), which we assess at 'b-'. The SACP reflects
our view of the company's 'weak' business risk profile and
'highly leveraged' financial risk profile," S&P said.

"In accordance with our criteria for government-related entities
(GREs), we base our view of the likelihood of extraordinary
support on our assessment of Ukrainian Railways," S&P said:

    "'Very important' role for Ukraine, in view of its monopoly
    position as manager of the national rail infrastructure,
    passenger transport provider, and dominant freight provider.
    Although Ukrainian Railways plays a very important role in
    fulfilling the government's economic and social objectives,
    we do not view its role as 'critical.' In our opinion, a
    default of Ukrainian Railways would have a major impact on
    the government, but we believe that this impact would not
    immediately stop the company's operations, which are crucial
    for Ukraine's economy," S&P said.

    "Very strong link' with the Ukrainian government. This takes
    account of Ukrainian Railways' current status as a state
    administration; its anticipated transition into a 100%
    government-owned joint-stock company under a planned railway
    reform in Ukraine; and our anticipation that it will not be
    privatized over the medium term," S&P said.

"Ukrainian Railway's SACP is constrained by 'less than adequate'
liquidity and risks associated with operating in Ukraine's
transitional economy, such as limited access to capital. The
rating also reflects Ukrainian Railways' monopoly status as the
country's national railroad infrastructure manager and its
dominant position in freight and passenger rail transport," S&P
said.

"Ukrainian Railways is currently undergoing a reform process from
a state agency into a closed joint-stock company. We do not
anticipate that Ukrainian Railways' ownership status and capital
structure will change as a result of the ongoing railway reform
process. Over the longer term, we anticipate that the reform
process could result in additional competition, particularly in
the more-profitable freight segment. However, under our base-case
operating scenario for 2012, we anticipate that Ukrainian
Railways' revenues will grow by a high-single-digit percentage,
mainly based on larger freight volumes due to growing GDP," S&P
said.

"Our base-case scenario assumes that despite the lower margins
and high capital investments, the company's credit metrics will
remain strong for the rating, with Standard & Poor's-adjusted
debt to EBITDA of about 2x. This is offset by a weaker financial
system and institutional framework in the Ukraine compared to
other developed countries. This leads to higher volatility in
accessing financing, greater refinancing risk in general, and
typically shorter-term debt maturities," S&P said.

"The positive outlook on Ukrainian Railways reflects our view
that if the company is successful in extending the maturity
profile of its debt, either through the establishment of medium-
term bank loans or through the issuance of a bond, this could
lessen the refinancing risk that weighs on the rating, and lead
us to raise the rating by one notch, all else remaining equal,"
S&P said.

"We could revise the outlook to stable if we do not believe that
Ukrainian Railways will be able to extend its debt maturity
profile and if we anticipate that the liquidity coverage will
remain at about 1x," S&P said.

"In accordance with our GRE criteria, a downgrade of the Ukraine
to 'B' would not result in any change to the rating on Ukrainian
Railways, assuming that the likelihood of extraordinary
government support remained 'very high' and that our assessment
of Ukrainian Railways' SACP remained at 'b-'," S&P said.



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


HBOS PLC: Moody's Issues Summary Credit Opinion
-----------------------------------------------
Moody's Investors Service issued a summary credit opinion on HBOS
plc's affiliates and includes certain regulatory disclosures
regarding its ratings. This release does not constitute any
change in Moody's ratings or rating rationale for HBOS plc's
affiliates.

Moody's current ratings on HBOS plc's affiliates are:

Halifax plc

BACKED Subordinate (domestic currency) ratings of Baa2, on review
for downgrade

BACKED Junior Subordinate (domestic currency) ratings of Ba1/B3,
on review for downgrade (hyb)

HBOS Capital Funding No. 1 L.P.

Preferred Stock Non-cumulative (foreign currency) ratings of Ba2,
on review for downgrade (hyb)

HBOS Capital Funding No. 2 L.P.

BACKED Preferred Stock Non-cumulative (foreign currency) ratings
of Ba2, on review for downgrade (hyb)

HBOS CAPITAL FUNDING NO. 3 L.P.

BACKED Preferred Stock Non-cumulative (foreign currency) ratings
of B3 (hyb)

HBOS Capital Funding No. 4 L.P.

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

HBOS Group Euro Finance (Jersey)

BACKED Preferred Stock Non-cumulative (foreign currency) ratings
of Ba2, on review for downgrade (hyb)

Leeds Permanent Building Society

BACKED Subordinate (domestic currency) ratings of Baa2, on review
for downgrade

BACKED Junior Subordinate (domestic currency) ratings of B3 (hyb)

Rating Rationale

The A2 senior debt rating of HBOS and the A1 long-term bank
deposit and senior debt ratings of Bank of Scotland reflect their
ownership by Lloyds and role within Lloyds Banking Group. Lloyds
has not guaranteed or assumed any outstanding debt of HBOS or any
of its subsidiaries. However, the equalization of both groups'
debt ratings reflects the strategic importance of HBOS to Lloyds,
and the fact that the businesses are being managed as one. It
also incorporates Moody's expectation that government support
would be available to the combined group without a
differentiation of legacy structures.

The D+ BFSR of BoS incorporates the bank's troubled assets and
riskier exposures (against which a high level of provisions have
been taken and are being actively run down), the bank's reliance
on wholesale and parental funding, and the restructuring of HBOS'
businesses that is being carried out by Lloyds, but also reflects
the bank's strong retail franchise in the UK and the fact that
the bank is fully adopting the more conservative risk positioning
of Lloyds.

Rating Outlook

The long term debt ratings of HBOS and the long term deposit and
debt ratings of Bank of Scotland are under review for downgrade
in line with the review for downgrade of Lloyds TSB and Lloyds
Banking Group ratings, as mentioned above.

The D+ BFSR of Bank of Scotland reflects the weaker asset quality
of the loan books which is vulnerable in Moody's severe stress
scenarios to further deterioration. The stable outlook on the
BFSR reflects the stabilization taking place in the financial
profile of the group and reduced likelihood of the rating moving
lower over the medium term.

What Could Change the Rating - Up

Over the long term, as the Bank of Scotland becomes fully
integrated within Lloyds Banking Group and the assets that are
outside the risk appetite of the group are wound down, Moody's
would expect the BFSR of Bank of Scotland to move closer to that
of Lloyds TSB (currently C-, mapping to Baa1, but under review
for downgrade as discussed above).

What Could Change the Rating - Down

Further stress in the commercial property market or a double-dip
in house prices could put further pressure on HBOS' asset quality
and lead to downward pressure on the BFSR. Further reduction of
the systemic support uplift in Lloyds Banking Group's debt
ratings would reduce the long term ratings of HBOS and Bank of
Scotland.

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


MAN GROUP: Moody's Retains Review on (P)Ba1 Jr. Sub. Notes Rating
-----------------------------------------------------------------
Moody's Investors Service announced on May 22 that it is
continuing its review for possible downgrade of Man Group plc's
(Man) ratings (senior debt rated Baa2 RUR), which was initiated
on April 11, 2012. The review will also incorporate an evaluation
of the transaction that Man announced on May 21, according to
which it is acquiring FRM Holdings Limited (FRM), a fund-of-
hedge-funds manager with approximately US$8 billion of funds
under management (FUM).

Ratings Rationale

The FRM transaction has no immediate implication for Man's rating
as: (i) there is no immediate cash consideration to be paid as
part of the transaction; (ii) the acquisition is relatively small
(13.5%) in relation to Man's overall FUM of US$59 billion as of
March 31, 2012; and (iii) Man's rating is already under review
for a possible downgrade.

Man plans to integrate FRM with its multi-manager business
creating the largest independent non-US based fund of hedge funds
with FUM of approximately US$19 billion. No consideration will be
paid up front. According to Man, the contingent consideration to
be paid over three years comprises: (i) a maximum of US$82.8
million in cash, net of total net assets acquired and dependent
on asset retention, and (ii) a 47.5% share of performance fees
attributable to FRM's existing funds under management over three
years, subject to a cap. The acquisition is expected to be
completed before the end of Q3 2012.

Man's senior debt is rated Baa2 on review for possible downgrade.
The complete list of Man's ratings is shown below. The rating
review reflects continuing challenges in the Company's core
business, which were highlighted in Moody's Credit Opinion on Man
Group plc, published on April 13, 2012.

As announced on April 11, 2012, during the rating review Moody's
will evaluate the following factors: (1) financial results; (2)
the likelihood of a sustainable turnaround in FUM trends; (3) the
potential for improvement in earnings, leverage, and coverage
metrics; and (4) policies related to capital and liquidity
management. In addition, Moody's will analyze the FRM acquisition
and its impact on Man's future business strategy, FUM growth,
earnings capacity, leverage and liquidity. The review will also
consider the additional debt buyback carried out on April 27,
2012.

Man Group plc is an asset management company domiciled in the UK,
specialized in the alternative investment management business.
The company had total funds under management of US$58.4 billion
as of December 31, 2011 and reported shareholders' equity of
US$4.1 billion as of December 31, 2011.

The following ratings remain on review for a possible downgrade:

- Man Group plc - Senior Unsecured Debt Rating -- Baa2, rating
   under review

- Man Group plc - Subordinated Debt -- Baa3, rating under review

- Man Group plc - Perpetual Subordinated Capital Securities --
   Ba1(hyb), rating under review

- Man Group plc USD3 billion EMTN programme - Senior Notes --
   (P)Baa2, rating under review

- Man Group plc USD3 billion EMTN programme - Dated Subordinated
   Notes -- (P)Baa3, rating under review

- Man Group plc USD3 billion EMTN programme - Undated
   Subordinated Notes -- (P)Baa3, rating under review

- Man Group plc USD3 billion EMTN programme - Junior
   Subordinated Notes -- (P)Ba1, rating under review

- Man Group plc USD3 billion EMTN programme - Short-Term Notes -
   - (P)P-2, rating under review

The principal methodology used in this rating was "Moody's Global
Rating Methodology for Asset Management Firms," published in
October 2007.


ROYAL BANK: Moody's Issues Summary Credit Opinion
-------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Royal Bank of Scotland Group plc's affiliates and includes
certain regulatory disclosures regarding its ratings. The release
does not constitute any change in Moody's ratings or rating
rationale for Royal Bank of Scotland Group plc's affiliates.

Moody's current ratings on Royal Bank of Scotland Group plc's
affiliates are:

RBS Capital Trust A

BACKED Junior Subordinate (foreign currency) ratings of B3 (hyb)

RBS Capital Trust B

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

RBS Capital Trust C

BACKED Preferred Stock Non-cumulative (foreign currency) ratings
of B3 (hyb)

RBS Capital Trust D

BACKED Preferred Stock Non-cumulative (foreign currency) ratings
of B3 (hyb)

RBS Capital Trust I

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

RBS Capital Trust II

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

RBS Capital Trust III

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

RBS Capital Trust IV

BACKED Preferred Stock Non-cumulative (domestic currency) ratings
of B3 (hyb)

RATINGS RATIONALE

RBS' C- BFSR (mapping to baa2 equivalent long-term debt rating)
incorporates the group's strong retail, corporate and insurance
franchises in the UK financial services market, as well as its
meaningful US franchise through Citizens Financial, and hence its
diversification across business lines and geographies. The
standalone rating also incorporates the steady improvements that
have taken place in RBS' financial profile since the UK
government's recapitalization in 2008/9; reductions in non-core
assets and wholesale funding; lower single-name and sector
concentrations; strengthened liquidity and stable capital levels.
RBS has also nearly completed the disposals required by the EC in
return for approval of state aid. Overall the bank has
established a strong track record in meeting its targets to
strengthen its credit profile.

However, the C- BFSR also incorporates the challenges facing the
bank, which is working its way through a multi-year restructuring
process: the wind-down of the remaining portfolio of non-core
assets in a difficult operating environment, including a large
sectoral exposure to commercial real estate, and the embedding of
a stronger risk management framework. Alongside these challenges
is the risk of a further downturn in the UK economy, and the
management of the inherent volatility of the bank's investment
banking activities.

The A2 senior debt and deposit ratings of RBS benefit from three
notches of uplift from the standalone C-/baa2 ratings. This
reflects the systemic importance of the bank in the UK and the
high probability of support for senior debt and deposit holders.
This level of uplift for systemic support is in line with Moody's
approach for large complex banks, such as RBS, which would be
challenging for the authorities to resolve.

Rating Outlook

The C- BFSR is under review for downgrade.

The A2/P1 long and short term debt and deposit ratings are under
review for downgrade.

What Could Change the Rating - UP

There is no upward pressure on the ratings currently as they are
under review for downgrade. There could be upward pressure on the
ratings over the medium-term if the bank delivers a consistently
lower level of impairment charges and returns to stable levels of
profitability. Any upward pressure would also require a visible
and sustained track record that the risks within the investment
bank can be well controlled.

What Could Change the Rating - DOWN

In addition to the current review for downgrade, downward
pressure on the BFSR could emerge should the group face sharply
higher impairment and/or credit losses on assets which are not
covered by the APS, leading to a requirement for additional
capital support beyond the GBP8 billion contingent capital
facility (provided by the UK government). Downward pressure could
also result from an increase in the group's risk appetite within
its GBM division, as evidenced by increased leverage or increased
market risk, which could in turn be indicated by an increase in
Value at Risk (VaR), or the level of stress test results, or an
increase in the bank's exposures to more capital-intensive or
illiquid businesses. In addition, severe stress on RBS' funding
profile due to a major and sustained disruption of the wholesale
funding markets could put downward pressure on the rating.

The current review of the debt ratings is not reviewing any
assumptions regarding systemic support. However, over the medium-
term downward pressure on the senior debt and deposit ratings
could result from UK/ European/ international bodies making
concrete progress in enabling burden sharing with senior
debtholders in the resolution of large, complex banks (eg.
detailed recovery and resolution plans, bail-in debt, cross-
border resolution regimes, moving derivative contracts to
exchanges).

The methodologies used in these ratings 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.


ULYSSES NO. 27: S&P Cuts Ratings on Two Note Classes to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Ulysses (European Loan Conduit No. 27) PLC's class D and E notes.
"At the same time, we removed from CreditWatch negative our
rating on the class C notes. Our ratings on the class A and B
notes are unaffected by 's rating actions," S&P said.

"At closing in July 2007, Ulysses (European Loan Conduit No. 27)
acquired the senior portion of a U.K. loan secured by a single
office building in London, which is known as CityPoint. The
senior loan is interest-only and the current outstanding note
balance is GBP429 million (unchanged since closing). The final
maturity date of the notes is in July 2017, three years after the
loan maturity date," S&P said.

"Since issuance, the debt service coverage ratio (DSCR) for the
whole loan has been below 1.0x, and the whole loan has relied on
sponsor top-ups through quarterly equity injections from the
borrowing group. At closing, the sponsor provided a GBP5 million
guarantee for interest payments under the whole loan. This
guarantee was fully called at the October 2011 loan interest
payment date, and is therefore no longer available," S&P said.

"The rating actions follow the interest shortfall that occurred
on the class D and E notes on the April 25, 2012, payment date.
On April 16, 2012, we lowered our ratings on the class D and E
notes. At the same time, we placed our rating on the class C
notes on CreditWatch negative in anticipation of cash flow
disruptions," S&P said.

"For the second successive period, the borrower failed to meet
its interest obligation under the whole loan on the interest
payment date in April 2012. This caused an interest shortfall of
GBP1,501,130 under the securitized loan. Contrary to the January
2012 payment date, the advance provider was not able to advance
enough cash to meet the interest shortfall under the notes
because an appraisal reduction occurred following a new asset
valuation," S&P said.

"In this transaction, the appraisal reduction mechanism is
structured to prevent drawings on the portion of the securitized
loan that represents more than 90% of the asset valuation. Based
on the most recent valuation, dated November 2011, the
securitized loan-to-value ratio is 99.93%," S&P said.

"As per the transaction documents, the advance provider limited
the servicer advance to GBP1,345,494, which in turn resulted in
cash flow disruptions on the most junior classes of notes. The
class E notes received no interest at all, and the class D notes
only received about 42% of the interest due. We have therefore
lowered to 'D (sf)' our ratings on these notes," S&P said.

"The whole loan was transferred to special servicing on Feb. 14,
2012. We understand that the interest due to the junior lenders
was used to pay the special servicing fees referenced against the
securitized loan. Given that special servicing fees are unlikely,
in our view, to affect the issuer's capacity to service the class
C notes, we have removed our rating on the class C notes from
CreditWatch negative," S&P said.

"The rating actions have not resulted from a change in our
opinion of the creditworthiness of the securitized loan backing
the transaction. However, the appraisal reduction caused cash
flow disruptions on the classes of notes that we consider to be
exposed to principal losses. Our ratings in this transaction
address timely payment of interest, payable quarterly in arrears,
and payment of principal not later than the legal final maturity
date (July 2017)," S&P said.

           POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES

"We have taken the rating actions based on our criteria for
rating European commercial mortgage-backed securities (CMBS).
However, these criteria are under review," S&P said.

"As highlighted in the Nov. 8 Advance Notice of Proposed Criteria
Change, we expect to publish a request for comment (RFC)
outlining our proposed criteria changes for rating European CMBS
transactions. Subsequently, we will consider market feedback
before publishing our updated criteria. Our review may result
in changes to the methodology and assumptions we use when rating
European CMBS, and consequently, it may affect both new and
outstanding ratings on European CMBS transactions," S&P said.

"Until such time that we adopt new criteria for rating European
CMBS, we will continue to rate and surveil these transactions
using our existing criteria," S&P said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

       http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class               Rating
            To                From

Ulysses (European Loan Conduit No. 27) PLC
GBP429 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered

D           D (sf)            CCC- (sf)
E           D (sf)            CCC- (sf)

Rating Removed From CreditWatch Negative

C           B+ (sf)           B+ (sf)/Watch Neg

Ratings Unaffected

A           A (sf)
B           BB (sf)



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


* EUROPE: Experts Mull Extra Capital Buffers for Banks
------------------------------------------------------
Angela Cullen at Bloomberg News, citing Manager Magazin, reports
that a European Union expert group is considering extra capital
buffers for systemically important banks and a new type of
mandatory bond among ways to reduce the financial institutions'
vulnerability to shocks.

According to Bloomberg, the Hamburg-based magazine said in an
excerpt of the report on Wednesday that the group, led by Finnish
central banker Erkki Liikanen, is evaluating additional capital
measures for individual lenders as well as a new type of debt
instrument that may only be purchased by insurers, pension funds
or sovereign wealth funds.

Manager Magazin said that the bonds, which would be treated as
equity in the event of a bank's insolvency, would help reduce the
cross-links between lenders and shield them from bankruptcy
fallout, Bloomberg notes.


* EU Telecom Operators' Cost Saving Opportunities Diminishing
-------------------------------------------------------------
Opportunities for European telecommunications service providers
to achieve further cost savings through headcount reductions are
diminishing and this is credit negative, says Moody's Investors
Service in a Special Comment published on May 22.

The new report is entitled "European Telecommunications Service
Providers: Opportunities To Cut Costs Are Diminishing".

Moody's notes that, to date, European telecoms service providers
have used staff cutbacks as their main source of cost savings and
to ease pressure on revenues. "Achieving further gains in this
area will be more challenging, particularly for companies that
are already close to peak levels of efficiency," says Ivan
Palacios, a Vice President -- Senior Analyst in Moody's Corporate
Finance Group and co-author of the report.

"The operators' fading ability to keep cutting staff costs is
credit negative for our rated European telecoms service providers
because cash flow generation will come under increasing pressure
if revenues continue to decline," explains Mr. Palacios. "In
addition, reducing their headcount beyond certain levels could
result in compromised customer service, which could in turn
affect brand perception and the long-term prospects of the
business."

Moody's used two ratios to measure telecom operators' staff cost
efficiency for its analysis: (1) annual revenues per employee and
(2) staff costs as a percentage of revenues. The analysis shows
that, among Moody's rated European telecoms, BT Group plc (BT,
Baa2 stable) has the most flexibility to continue cutting staff
costs in order to mitigate pressure on revenues. BT is a fixed-
line centric operator -- the only large incumbent in Europe
lacking a mobile business. The company inherited a large
workforce after privatization and therefore still has room to
adjust these legacy structures.

Other companies have room to improve their efficiency levels, but
Moody's notes that their ability and willingness to implement
further headcount reduction plans could be constrained by varying
degrees of government ownership and, in some instances, the
presence of civil servants within the workforce. These companies
include France Telecom (A3 stable), Deutsche Telekom AG (Baa1
stable), Telekom Austria AG (Baa1 stable), Telekom Slovenije d.d.
(Baa2 stable) and Hellenic Telecommunications Organization S.A.
(OTE, B2 negative).

Moody's notes that some operators have already made substantial
cost-cutting efforts and are close to their efficiency 'ceiling'
in relation to significant additional headcount reductions. This
is because they generate high revenues per employee and have
relatively low staff costs as a percentage of revenues, and
therefore are already fairly efficient. These companies include
Belgacom Societe Anonyme de Droit Public (Belgacom, A1 stable),
TeliaSonera AB (A3 stable), Telenor ASA (A3 stable), Elisa
Corporation (Baa2 stable), TDC A/S (Baa2 stable), Telecom Italia
S.p.A. (Baa2 negative), Koninklijke KPN N.V. (KPN, Baa2 negative)
and Portugal Telecom SGPS, SA (Ba2 negative).

Subscribers can access this report via this link:

  http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_141841


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

July 14-17, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Southeast Bankruptcy Workshop
        The Ritz-Carlton Amelia Island, Amelia Island, Fla.
           Contact: 1-703-739-0800; http://www.abiworld.org/

Aug. 2-4, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Mid-Atlantic Bankruptcy Workshop
        Hyatt Regency Chesapeake Bay, Cambridge, Md.
           Contact: 1-703-739-0800; http://www.abiworld.org/

November 1-3, 2012
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Westin Copley Place, Boston, Mass.
           Contact: http://www.turnaround.org/

Nov. 29 - Dec. 2, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Winter Leadership Conference
        JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
           Contact: 1-703-739-0800; http://www.abiworld.org/

April 10-12, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Spring Conference
        JW Marriott Chicago, Chicago, Ill.
           Contact: http://www.turnaround.org/

October 3-5, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Marriott Wardman Park, Washington, D.C.
           Contact: http://www.turnaround.org/


                            *********

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 * * *