TCREUR_Public/120531.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 31, 2012, Vol. 13, No. 108

                            Headlines



I R E L A N D

AVALON GUITARS: In Liquidation; Meeting Set for Thursday
BLOXHAM: Rivals Secure About 10% of Private Client Funds
BOVALE DEVELOPMENTS: NAMA Approves Business Plan
LYRATH HOTEL: Bank of Scotland Ireland Appoints Receiver


L U X E M B O U R G

PETRUSSE EUROPEAN: S&P Lifts Ratings on 3 Note Classes to 'CCC+'


N E T H E R L A N D S

PANTHER CDO III: S&P Lowers Ratings on Two Note Classes to 'B-'


N O R W A Y

* NORWAY: Moody's Analyzes Covered Bond Legal Framework


R U S S I A

BANK TAVRICHESKY: S&P Assigns 'B-/C' Counterparty Credit Ratings


S P A I N

* SPAIN: Three Small Savings Banks Agree to Merge


S W E D E N

NOBINA AB: Moody's Cuts PDR to 'Caa3', On Review for Downgrade


S W I T Z E R L A N D

TAURUS CMBS 2006-3: S&P Lowers Rating on Class D Notes to 'D'


U N I T E D   K I N G D O M

AQUILA PLC: Fitch Cuts Rating on GBP10MM Class D Notes to 'CCCsf'
BIFFA: Lenders May Opt for Debt-for-Equity Restructuring
KERLING PLC: Moody's Changes Outlook on 'B3' CFR to Negative
PERSEUS PLC: S&P Lowers Rating on Class C Notes to 'CCC-(sf)'
RANGERS FOOTBALL: Publishes Company Voluntary Arrangement

RANGERS FOOTBALL: Administrators Face Conflicts of Interest Probe
RANGERS FOOTBALL: May Face More Severe SFA Sanctions
THEATRE HOSPITALS: Fitch Cuts Ratings on Two Note Classes to 'BB'
THOMAS COOK: Shareholders Back Turnaround Plans
* Proskauer Hires Dewey & LeBoeuf's London Bankruptcy Team


X X X X X X X X

* EUROPE: EU Plan to Hit Unsecured Creditors at Failing Banks
* EUROPE: Moody's Says Unrated LBOs Face Refinancing Burden


                            *********


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I R E L A N D
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AVALON GUITARS: In Liquidation; Meeting Set for Thursday
--------------------------------------------------------
The UK Press Association reports that Avalon Guitars is going
into liquidation.

The liquidation is being dealt with by accountancy firm FPM, UKPA
discloses.

According to UKPA, an FPM spokeswoman said: "FPM have been
instructed to help the company convene an Article 84 meeting,
which places the company into liquidation, and that meeting will
be held next Thursday."

Avalon Guitars is a maker of custom guitars in the UK and
Ireland.  It has produced customized guitars for hundreds of
performers including Van Morrison, Eric Clapton, the Corrs, David
Gray and Katie Melua.


BLOXHAM: Rivals Secure About 10% of Private Client Funds
--------------------------------------------------------
Ciaran Hancock and Simon Carswell at The Irish Times report that
rivals of stockbroking firm Davy are believed to have secured
about 10% of the EUR540 million in private client funds
administered by Bloxham Stockbrokers that were due to transfer to
the Dawson Street-based group as part of its takeover of elements
of the failed broker.

This is expected to rise to about 15%, and reflects the fact some
senior Bloxham staff have chosen not to move to Davy and have
taken their clients with them to other firms, the Irish Times
notes.

According to the Irish Times, sources on Tuesday night indicated
Goodbody had attracted about EUR40 million of Bloxham private
client funds, with another EUR20 million expected to transfer by
the end of this week.

Funds have also been switching to other brokers, including
Dolmen, which has recruited a handful of Bloxham staff from the
private clients division, the Irish Times says.  The deal on
private clients between Bloxham and Davy had been in train for
some months, the Irish Times states.

Davy was approached by Bloxham late on Friday about also taking
over its asset management business following the Central Bank's
direction to Bloxham to cease operations after it was told about
accounting irregularities at the firm the previous evening, the
Irish Times recounts.

As reported by the Troubled Company Reporter-Europe on May 29,
2012, Independent.ie related that Bloxham was ordered to cease
trading after a watchdog raised concerns over its levels of
financial reserves.

Bloxham is one of Ireland's oldest stockbrokers.


BOVALE DEVELOPMENTS: NAMA Approves Business Plan
------------------------------------------------
Gordon Deegan at Irish Examiner reports that the National Asset
Management Agency has approved a business plan for Bovale
Developments.

According to an auditor's report, Bovale Developments incurred
losses in the year to the end of June 2011, Irish Examiner
relates.  This followed losses in the year to the end of
June 2010, but the extent of the losses is not known as Bovale
Developments, controlled by Michael and & Tom Bailey, is
unlimited, Irish Examiner discloses.

However, a three-page report by the firm's auditors, McGrath &
Co, confirms the liabilities of the company exceeded its assets
on June 30 last, Irish Examiner notes.

The auditors state the financial statements by Bovale
Developments draw attention to the risks and uncertainties
associated with the valuation of property assets, particularly
under current market conditions, Irish Examiner says.

Based in Dublin, Ireland, Bovale Developments builds retail
developments, housing developments and shopping centers.


LYRATH HOTEL: Bank of Scotland Ireland Appoints Receiver
--------------------------------------------------------
Vincent Ryan at Irish Examiner reports that a receiver has been
appointed to the five-star Lyrath Hotel in Kilkenny by Bank of
Scotland Ireland.

Irish Examiner relates that Kieran Wallace of KPMG confirmed on
Friday that he had been appointed as the receiver of the hotel
that was developed by a consortium led by Kerry businessman
Xavier McAuliffe.

According to Irish Examiner, a spokesperson for Bank of Scotland
Ireland refused to disclose how much money Mr. McAuliffe owed.

Mr. Wallace, as cited by Irish Examiner, said that the hotel
would be run as a going concern.

"It's business as usual and the hotel will continue to trade.
There will be no change to any of the staff at the hotel and all
bookings will be honored," Irish Examiner quotes Mr. Wallace as
saying.

The Lyrath Estate Hotel made a loss of more than EUR1 million in
2009, Irish Examiner says, citing company documents.

It continued to lose money and in 2010, recorded a pre-tax loss
of EUR278,278, Irish Examiner notes.  According to an auditor's
report filed with the Companies Office, the hotel recorded a cash
profit of EUR31,373 in the 12 months to the end of Dec 2010, but
a pre-tax loss of EUR278,278 after taking a non-cash depreciation
charge of EUR309,651 into account, Irish Examiner discloses.



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L U X E M B O U R G
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PETRUSSE EUROPEAN: S&P Lifts Ratings on 3 Note Classes to 'CCC+'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
the class A to E notes in Petrusse European CLO S.A. "At the same
time, we have withdrawn our rating on the class Q combination
notes," S&P said.

"The rating actions follow our credit and cash flow analysis of
the transaction using data from the trustee report, dated
April 5, 2012. We have taken into account recent transaction
developments and have applied our 2010 counterparty criteria,"
S&P said.

"The transaction entered its amortization period in September
2009 and the class A notes have significantly amortized to
EUR58.2 million from EUR175.2 million (these amounts are based on
a conversion of the U.S. dollar-denominated class A-2 notes into
euro-denominated notes at the initial foreign exchange rate).The
aggregate collateral balance has also decreased to EUR132.8
million from EUR253.6 million," S&P said.

"The trustee report shows that the transaction's
overcollateralization tests are passing, except for the class E
par value test, which is causing the class E notes to deleverage
using excess interest. Overall, developments have caused the
credit enhancement available to all classes of notes to increase,
especially for the class A and E notes," S&P said.

"The reported weighted-average spread earned on the collateral
pool has increased to 3.64% from 2.79% since we published our
previous update on this transaction. However, the trustee report
also shows that the percentage of portfolio assets that we
consider in our analysis as defaulted (i.e., debt obligations of
obligors rated 'CC', 'SD' [selective default], or 'D') has
increased to 5.5% from 1.5% since our previous review.
Additionally, 'CCC'-rated assets have increased to 16.6% from
11.3%. We have therefore observed a negative ratings migration
within the portfolio, which has resulted in slightly higher
scenario default rates across all rating levels, despite the
shorter weighted-average life," S&P said.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rate for each
rated class. In our analysis, we used the portfolio balance that
we considered to be performing (EUR132.8 million of assets rated
'CCC-' or above and cash), the reported weighted-average spread
of 3.64%, and the weighted-average recovery rates that we
considered to be appropriate. We incorporated various cash flow
stress scenarios using our standard default patterns, levels, and
timings for each rating category assumed for each class of notes,
in conjunction with different interest-rate and exchange-rate
stress scenarios," S&P said.

"Approximately 21% of the assets in the transaction's portfolio
are denominated in U.S. dollars. There are currently no currency
options nor cross-currency swap agreements entered into by the
issuer to mitigate the risk of foreign-exchange-related losses.
Instead, the transaction relies on a 'natural' hedging mechanism,
as the class A-2 and E-2 notes are also denominated in U.S.
dollars. We have, however, observed a positive funding mismatch,
meaning that U.S. dollar-denominated assets exceed U.S. dollar-
denominated liabilities by approximately $10 million," S&P said.

"Based on our analysis, we now consider that the credit
enhancement available to all classes of notes is commensurate
with higher ratings than previously assigned to the class A-1, A-
2, A-3, B, C, D-1, D-2, D-3, E-1, E-2, and E-3 notes, and we have
raised our ratings on these classes accordingly," S&P said.

"We have also withdrawn our rating on the class Q combination
notes, following the trustee's confirmation to us that these
notes were previously decoupled," S&P said.

Petrusse European CLO is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The transaction closed in June
2004 and is managed by Invesco Senior Secured Management Inc.

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

   http://standardandpoorsdisclosure-17g7.com/1111639.pdf

RATING LIST

Class              Rating
            To               From

Petrusse European CLO S.A.
EUR240.5 Million and US$103 Million Fixed- and Floating-Rate
Notes

Ratings Raised

A-1         AAA (sf)         AA- (sf)
A-2         AAA (sf)         AA- (sf)
A-3         AAA (sf)         AA- (sf)
B           AA+ (sf)         A+ (sf)
C           A+ (sf)          BBB+ (sf)
D-1         B+ (sf)          CCC+ (sf)
D-2         B+ (sf)          CCC+ (sf)
D-3         B+ (sf)          CCC+ (sf)
E-1         CCC+ (sf)        CCC- (sf)
E-2         CCC+ (sf)        CCC- (sf)
E-3         CCC+ (sf)        CCC- (sf)

Rating Withdrawn

Q Combo     NR               CCC+ (sf)

NR-Not rated.



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N E T H E R L A N D S
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PANTHER CDO III: S&P Lowers Ratings on Two Note Classes to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on Panther CDO III B.V.'s
class A, B, D1, D2, and Q comb notes. "At the same time, we
affirmed and removed from CreditWatch negative our ratings on the
class C1 and C2 notes," S&P said.

"The rating actions follow our assessment of the transaction's
performance. We used data from the trustee report (dated March
30, 2012), performed our credit and cash flow analysis, and took
into account recent transaction developments. We applied our 2010
counterparty criteria, cash flow criteria, and CDO of ABS
criteria," S&P said.

"From our analysis, we have observed an improvement in the credit
quality of the pool. The proportion of assets that we consider to
be rated in the 'CCC' category ('CCC+', 'CCC', and 'CCC-') has
decreased since we previously reviewed this transaction. However,
the proportion of defaulted assets (rated 'CC', 'C', 'SD'
[selective default], or 'D') in the collateral pool has increased
since we previously reviewed this transaction. With lower
aggregate collateral balance, the credit enhancement has also
decreased in comparison our previous review," S&P said.

"We subjected the capital structure to our cash flow analysis,
based on the updated methodology and assumptions as outlined by
our cash flow criteria and our CDO of ABS criteria to determine
the break-even default rate (BDR). 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.

"At the same time, we conducted our credit analysis, based on our
updated assumptions, to determine the scenario default rate (SDR)
at each rating level, which we then compared with its respective
BDR," S&P said.

"Taking into account our credit and cash flow analysis, we
consider the credit enhancement available to the class A, B, D1,
D2, and Q comb notes in this transaction to be commensurate with
lower ratings. As a result, we have lowered and removed from
CreditWatch negative our ratings on these notes," S&P said.

"At the same time, we have affirmed and removed from CreditWatch
negative our ratings on the class C1 and C2 notes because we
consider the credit enhancement to be commensurate with our
current ratings on the notes," S&P said.

"We have analyzed the derivative counterparties' exposure to the
transaction, and concluded that the derivative exposure is
currently sufficiently limited, so as not to affect the ratings
that we have assigned," S&P said.

Panther CDO III is a multi-asset CDO transaction which consists
bonds, structured finance securities, leveraged loans, high-yield
securities and other debt obligations.

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

   http://standardandpoorsdisclosure-17g7.com/1111639.pdf

RATINGS LIST

Panther CDO III B.V.
EUR401.65 Million Fixed- and Floating-Rate Notes

Class               Rating
          To                     From

Ratings Lowered and Removed From CreditWatch Negative

A         BBB+ (sf)              A (sf)/Watch Neg
B         BBB- (sf)              BBB+ (sf)/Watch Neg
D1        B- (sf)                B+ (sf)/Watch Neg
D2        B- (sf)                B+ (sf)/Watch Neg
Q Comb    BB+ (sf)               BBB (sf)/Watch Neg

Ratings Affirmed and Removed From CreditWatch Negative

C1        BB+ (sf)               BB+ (sf)/Watch Neg
C2        BB+ (sf)               BB+ (sf)/Watch Neg



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N O R W A Y
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* NORWAY: Moody's Analyzes Covered Bond Legal Framework
-------------------------------------------------------
Norway's covered bond legal framework has a number of strengths
and weaknesses relative to other jurisdictions, says Moody's
Investors Service in a new Special Comment published on May 29.
Strengths include ease of interest-rate re-setting, maturity
extensions on covered bonds and exclusion of non-performing
assets from cover pool tests. A highlighted weakness is that the
covered bond law does not stipulate a legal minimum over-
collateralization (OC).

The new report is entitled "Norway - Legal Framework for Covered
Bonds."

Moody's has ranked legal features according to Moody's legal
views (MLVs) as either Strong, Average, or Weak. These may refer
strictly to the covered bond law or also take into account the
general law. "MLVs reflect our credit perspective on the strength
of a range of legal features relative to a "typical" covered bond
legal framework. This is a qualitative and somewhat subjective
assessment and the benchmark legal framework may evolve over
time," explains Jane Soldera, a Moody's Vice President and author
of the report. "Furthermore, market practice, contractual or
otherwise, may mean a feature is more or less significant than it
may appear. In these cases, in the report we add in brackets a
market practice modifier (MP) to give a composite evaluation,"
adds Ms. Soldera.

NORWAY'S LEGAL FRAMEWORK CONTAINS SEVERAL RELATIVE STRENGTHS

Moody's says that the strongest features relative to other
jurisdictions are not strictly under the covered bond law. One is
the right of issuers to re-set the interest rates on floating-
rate mortgage loans with just six weeks' notice, which reduces
the length of time the cover pool is exposed to refinancing risk
if an issuer defaults. Another is the typical 12-month maturity
extension on covered bonds, which also reduces refinancing risk
by increasing the time available for refinancing.

Under the covered bond law itself, Moody's highlights that the
law provides for non-performing assets to be excluded from cover
pool tests to prevent a dilution of cover pool credit quality.
This feature is not always found even in core covered bond
jurisdictions so is recognized as a strength for Norway.

NO LEGAL MINIMUM OC IS A WEAKNESSES

Moody's says that the covered bond law does not specify a legal
minimum OC, although the value of the cover pool assets must
always be greater than the value of covered bonds on an net
present value basis. However, in practice, issuers normally
maintain a level of OC that is consistent with the rating of the
covered bonds. Accordingly, the MLV is Weak (MP Average),
recognizing that in practice this weakness has been mitigated so
that Norwegian covered bonds are not weaker than average in this
regard.

FIRST IN SERIES

The new report is intended to be the first of a series covering
all major covered bond jurisdictions. As the same legal features
will be listed and discussed in each report, the reports will
function as both a resource for analyzing a country's covered
bond legal framework on a stand-alone basis, and also be
structured to enable comparisons across frameworks.



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R U S S I A
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BANK TAVRICHESKY: S&P Assigns 'B-/C' Counterparty Credit Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' long-term
and 'C' short-term counterparty credit ratings to Russia-based
Bank Tavrichesky. "We also assigned a 'ruBBB' Russia national
scale rating. The outlook is stable," S&P said.

"The ratings on Bank Tavrichesky reflect the 'bb' anchor for a
commercial bank operating only in Russia, our view of the bank's
'weak' business position, 'weak' capital and earnings, 'moderate'
risk position, 'average' funding, and 'adequate' liquidity, as
our criteria define these terms. The stand-alone credit profile
(SACP) is 'b-'," S&P said.

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

"We consider Russia to have moderate growth prospects, credit
expansion, and debt levels. Credit risk in the economy is very
high, due to a significant proportion of lending in foreign
currency, the poor credit standing of the nonexport economy, and
what we regard as Russia's weak and arbitrary legal system," S&P
said.

"With regard to industry risk, we see deficiencies in Russia's
bank supervision and believe that the dominance of state-owned
banks unfavorably distorts competition for private-sector banks.
Bank funding markets are risky, owing to a lack of long-term
financing in rubles and the prevalent use of foreign currency.
Nonetheless, this area has improved since 2008, due to a
significant increase in retail deposits and the Russian Central
Bank's regular and effective liquidity support operations," S&P
said.

"Our assessment of Bank Tavrichesky's business position as 'weak'
is based on the bank's limited market share and customer
franchise, with concentrations in corporate banking business.
With total assets of Russian ruble (RUB) 34.9 billion (about $1.1
billion) as of Dec. 31, 2011, Bank Tavrichesky is a midsize bank
ranking No. 96 by assets among Russian banks. Headquartered in
St. Petersburg, the bank focuses on servicing large and midsize
corporate clients in the North West Federal District of Russia
through a limited branch network. The main clientele is driven by
business and personal connections of the main shareholders and
management, including several government-related entities and
municipalities," S&P said.

"The bank is registered as an open joint stock company with its
shares listed on Russia's MICEX stock exchange. The major
shareholders, Russian businessmen who established the bank--Ivan
Kuznetsov, Oleg Zakharzhevskiy, and Sergey Somov (the bank's
CEO)--each hold about 10% of the shares, while another 9.1% is
owned by Norway-based SpareBank 1 Nord-Norge (SBNN). We
understand the Norwegian bank intends to help develop business
ties between its customers and the North West Federal District of
Russia. However, SBNN does not appear to have a material
influence on the bank's management or strategy," S&P said.

"Bank Tavrichesky's main strategic target is to expand and become
one of Russia's 70 largest banks by 2016, with a planned 25%
annual average growth in assets within the next three years. The
main focus will remain on corporate business, with the goal of
developing more lending to small and midsize enterprises and so
reduce single-name concentrations. We assess the bank's
management and corporate and governance as weak, with lower
transparency and disclosure than other rated banks," S&P said.

"In our view, Bank Tavrichesky's capital and earnings are 'weak'.
The projected risk-adjusted capital (RAC) ratio, before
diversification, for the next 18 months is a borderline 5%; we
consider a RAC ratio of more than 5% to reflect moderate
capitalization. The bank's RAC ratio was 4.8% at year-end 2011.
Our RAC projection takes into account a RUB1 billion capital
injection expected by the end of May 2012. The quality of capital
is somewhat diluted given the shareholders' dividend
expectations, with a planned payout ratio of about 50% per
annum," S&P said.

"The bank's earning capacity is moderate with a three-year
average earnings buffer of 0.65%. The net interest margin as of
Dec. 31, 2011, was 4.5%, an improvement from 3.5% at year-end
2010, but it could come under pressure from increased competition
and high funding costs. The year-end 2011 results were
underpinned by a net recovery in provisions. We forecast that the
bank will need to create more provisions following targeted loan
growth in 2012, but still expect credit costs to be in line with
the market average," S&P said.

"The bank's risk position is 'moderate,' in our view, mainly due
to single-name and related-party concentrations in the lending
book and our assessment of risk management as weak. Single-name
concentrations are high, with the top 20 borrowers accounting for
55% of total loans or about 347% of adjusted total equity (after
the capital increase). In addition, related-party loans (defined
as loans to entities affiliated with shareholders or management)
account for 10% of the loan book," S&P said.

"Nonperforming loans (overdue by more than 90 days) equaled 1.2%
of total loans as of April 1, 2012, which is lower than the
market average, 1.3% at year-end 2011. However, restructured
loans account for a relatively high 10%. The bank reported net
recovery of provisions at year-end 2011. Its credit loss track
record of 2% of new provisions to total loans in 2010 is slightly
better than the system average. With 30% of loans denominated in
foreign currency, the bank's loan portfolio is vulnerable to
currency fluctuations. However, the open currency position is
kept limited," S&P said.

"The bank's funding is 'average' and liquidity is 'adequate,' in
our view. Customer deposits represent the main funding source,
comprising 78% of total liabilities, of which 50% are corporate
and 50% retail. The loan-to-deposit ratio of 90% appears adequate
in a Russian context. Funding concentrations are adequate, with
the top 20 depositors accounting for 15% of the total deposit
base at year-end 2011. The bank plans to attract municipal
funding, which would be cheaper than retail deposits. It also
benefits from a RUB0.7 billion subordinated loan from SBNN. The
liquidity cushion is currently adequate, with cash and money
market instruments accounting for about 25% of assets. However,
there is a liquidity gap due to the higher amount of demand
corporate accounts, although they are relatively stable. The bank
has received an approved credit line of EUR20 million (about
RUB800 million) from SBNN with a one-year term to support its
liquidity in case of need," S&P said.

"The stable outlook reflects our view that Bank Tavrichesky will
continue to successfully develop its business franchise, with its
current financial profile remaining broadly the same over the
next 12 months," S&P said.

"We would consider a positive rating action if the bank
strengthened its business position by developing its customer
franchise, improving concentrations and diversity, strengthening
risk management, and demonstrating better transparency and
disclosure. We would also need to see the bank maintaining
adequate asset quality indicators and stable funding," S&P said.

"We would consider a negative rating action if Bank Tavrichesky's
risk position worsened, reflected in a further increase in
related-party or single-name concentrations, or if asset quality
indicators deteriorated and the bank showed higher losses than
the market average. A decrease in capitalization, with the RAC
ratio falling to less than 3% (which is a rather remote
scenario), or a shortage of liquid assets could also trigger a
negative rating action," S&P said.



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S P A I N
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* SPAIN: Three Small Savings Banks Agree to Merge
-------------------------------------------------
Christopher Bjork, Pablo Dominguez and Jeffrey T. Lewis at Dow
Jones Newswires report that three small Spanish savings banks
agreed to merge and a larger bank separately said it would sell a
key asset as local lenders scramble to shore up their capital
bases in the midst of an unprecedented financial crisis.

Unlisted savings banks Liberbank, Ibercaja and Caja3 said Tuesday
their boards approved a three-way merger of relatively healthy
lenders that will create a bank with more than EUR110 billion
(US$137.96 billion) in assets and a dominant position in the
northern Spanish regions of Asturias and Aragon, Dow Jones
relates.

Spanish savings banks, or cajas, were particularly hard hit by
the implosion of the country's property market more than four
years ago, Dow Jones discloses.  Since it took power in December,
the conservative Popular Party government has advocated mergers
in the sector in an attempt to create fewer and bigger groups
that, in theory, would have better access to funding in bond
markets, Dow Jones notes.

That appears to be the thinking behind the latest proposed merger
of three savings banks, Liberbank, Ibercaja and Caja3, which
would become the seventh biggest financial institution in Spain
by assets, Dow Jones says.

Ibercaja will constitute 46.5% of the new bank, while Liberbank
will have 45.5% and Caja3 will make up the remainder, the banks,
as cited by Dow Jones, said in a brief statement.

Spanish banks have been shut out of funding markets in recent
months because of concerns about the country's fragile fiscal
situation, leading to an unhealthy reliance on liquidity from the
European Central Bank, Dow Jones says.  The latest merger would
create a healthier bank than have some other combinations, such
as Bankia SA, according to Dow Jones.



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S W E D E N
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NOBINA AB: Moody's Cuts PDR to 'Caa3', On Review for Downgrade
--------------------------------------------------------------
Moody's Investors Service has downgraded Nobina AB's probability
of default rating (PDR) to Caa3 from Caa1 and left its corporate
family rating (CFR) unchanged at Caa1. All ratings remain on
review for downgrade. Nobina's EUR85 million (approximately
SEK764 million at May 25, 2012) senior secured notes due
August 1, 2012 are not rated by Moody's.

Downgrades:

  Issuer: Nobina AB

     Probability of Default Rating, Downgraded to Caa3 from Caa1

Ratings Rationale

The downgrade of Nobina's PDR to Caa3 reflects Moody's continued
concerns over the group's tight liquidity position and heightened
risk that Nobina will not be able to refinance the approaching
maturity of its EUR85 million senior secured notes due August 1,
2012. Moody's understands that Nobina is considering various
alternatives to refinance the notes, although no details are
available at this stage. Nobina's shareholder and bondholder base
is largely aligned, which might help to reduce the execution risk
of a refinancing.

The current two notch differential between the company's CFR of
Caa1 and the PDR of Caa3 reflects Moody's expectation that Nobina
could eventually consider an exchange offer of the bond which
could result in a moderate loss to bondholders. An exchange offer
could be considered a distressed exchange, and hence a default
under Moody's definition.

Moody's methodology for evaluating a distressed exchange
considers inter alia whether (i) the issuer would be offering
creditors a new package of security or cash that amount to a
diminished financial obligation relative to the original
obligation prescribed by the notes' indentures and (ii) the
exchange is apparently being offered to allow the issuer to avoid
a bankruptcy or payment default.

The Caa1 CFR is constrained by the company's limited financial
flexibility due to tight liquidity headroom with a very low cash
position of SEK107 million and high short-term debt maturities of
SEK1,420 million at February 29, 2012. A total of SEK739 million
of short-term debt maturities related to the senior notes, SEK645
million to short-term financial leasing liabilities and SEK36
million to factoring liabilities outstanding under its SEK300
million 364-days accounts receivable financing agreement.

The current CFR is also reflective of the compression in the
group's credit metrics in fiscal year 2011/12 (ending 29 February
2012) as a result of operating inefficiencies in Norway, weak
demand for interregional traffic affecting its Swebus operations,
loss-making contracts in Denmark and the continued need to match-
fund fleet investments by debt. This resulted in weak credit
metrics at fiscal year-end 2011/12, evidenced by operating margin
of 3.0%, debt/EBITDA of 7.0x, (EBITDA-Capex)/interest expense of
1.4x and EBIT/interest expense of 0.6x.

The ratings remain on review for further downgrade and this
reflects the risk that the company will not be able to refinance
the EUR85 million senior secured notes before maturity (August 1,
2012), that a refinancing could qualify for a distressed exchange
according to Moody's definition, or that the expected loss for
bond holders could be higher than currently expected, if, e.g. a
timely refinancing or exchange offer cannot be achieved.

TRIGGERS FOR A POTENTIAL DOWNGRADE/UPGRADE

Further negative rating pressure could arise in case of Nobina's
inability to refinance the EUR85 million senior secured notes due
August 1, 2012 or any transaction that could qualify as a
distressed exchange with a lower than currently expected recovery
rate in such a scenario.

Rating upward pressure would require (i) improvements in the
company's liquidity profile and cash flow generation, (ii)
visibility on a return to historic levels of operating
performance evidenced by debt/EBITDA around or below 6.0x, EBIT
margin around 4% and modest positive FCF generation, as well as
(iii) a successful refinancing of the EUR85 million senior notes
due August 1, 2012.

Other factors considered in Nobina's Caa1 rating are (i) the
company's position as the largest Nordic bus transportation group
with a significant proportion of business with local Scandinavian
communities with relatively high revenue visibility and
predictability due to limited transportation volume exposure;
(ii) the group's track record of generating positive free cash
flow albeit modest in relation to outstanding debt; (iii) but
also the group's limited scale with revenues and profit
generation being concentrated on the Swedish market.

Nobina AB's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Nobina AB's core industry
and believes Nobina AB's ratings are comparable to those of other
issuers with similar credit risk.

Nobina AB is the largest Nordic bus transportation company,
operating in Sweden, Norway, Finland and Denmark. Its revenues
for fiscal year 2011/12 (ending February 29) totaled SEK7.1
billion and were mostly generated from public bus services in
Sweden. This reflects the more advanced stage of the deregulation
in this country, where almost all local and regional bus services
have been tendered since 1989, in contrast to the situation in
Norway and Finland, where less than 50% of the traffic has been
tendered so far. In Sweden, the public bus transportation needs
of Contractual Public Transportation Associations (CPTAs) are put
up for tender via a competitive bidding process and the tenor of
such contracts is typically five to eight years. The majority of
contracts are priced with cost indexation levels adjusted on a
monthly (Denmark), quarterly (Sweden, Finland) or annual basis
(Norway).



=====================
S W I T Z E R L A N D
=====================


TAURUS CMBS 2006-3: S&P Lowers Rating on Class D Notes to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Taurus CMBS (Pan-Europe) 2006-3 PLC's class B, C, and D notes.
"Our ratings on the class A, X1, and X2 notes are unaffected,"
S&P said.

"The rating actions reflect our opinion on cash flow disruptions
in the transaction," S&P said.

"As reflected in the February 2012 cash manager report, the
issuer failed to meet its interest payment obligation under the
notes on the February 2012 payment date. The class B, C, and D
notes together suffered an interest shortfall of EUR71,478. The
weighted-average cost of notes exceeded the weighted-average loan
coupon for the period ending in February 2012. Although the two
remaining loans paid full interest, the payment of ordinary but
nonrecurring fees on that particular payment date caused the
interest shortfall. In this transaction, the earlier repayment of
five of the seven initial loans caused a spread compression
between the remaining loans and notes. On that payment date, the
spread compression was such that the weighted-average coupon on
the notes (including senior expenses) exceeded the weighted-
average coupon on the two remaining loans. We note that none of
the notes are subject to an available funds cap," S&P said.

"In May 2012, the interest shortfall has marginally increased to
EUR71,759. We understand from the reporting agent that excess
spread is not available to cover overdue interest under the
notes, and was instead distributed to the class X1 and X2
noteholders. In accordance with the transaction documents, the
cash manager used the remaining interest collections left after
servicing the class A, X1, and X2 notes to repay overdue interest
under the class B notes. The class C and D notes continue to
defer unpaid interest. The existing shortfall on the class C
notes is minor, in our view," S&P said.

"The payment of ordinary but nonrecurring fees due to third
parties, if such payments are not spread over several quarters,
may result in increased interest shortfalls, in our opinion. In
addition, we believe that the repayment of only one of the two
remaining loans at maturity may exacerbate the issuer's cash flow
issues. Given these factors, we believe that interest shortfalls
may increase again on future payment dates and potentially affect
interest payments to the class B to D notes. Therefore, the class
B to D notes are vulnerable to cash flow disruptions, in our
opinion, and we continue to monitor the situation. Further rating
actions would likely be warranted if interest shortfalls
continued to increase," S&P said.

                       RATING ACTIONS

"Our ratings address timely payment of interest, payable
quarterly in arrears, and payment of principal not later than the
legal final maturity date (in May 2015). We have therefore
lowered our ratings on the class B, C, and D notes to 'BB+ (sf)',
'B- (sf)', and 'D (sf)'. We have lowered our rating on the class
B notes because classes of notes vulnerable to interest
shortfalls are no longer commensurate with investment-grade
ratings, in our opinion. We have lowered our ratings on the class
C and D notes because interest shortfalls occurred. We have not
lowered our rating on the class C notes to 'D (sf)', because the
existing shortfall is minor, in our view. However, further rating
actions on the class C notes would be likely if interest
shortfalls increase for this class," S&P said.

"The rating actions have not resulted from a change in our
opinion on the default probability and likely recovery associated
with the remaining pool of loans backing the transaction," S&P
said.

"Taurus CMBS (Pan-Europe) 2006-3 closed in November 2006 with a
note balance of CHF0.1 million and EUR447.75 million. The
underlying pool initially held seven loans secured on real estate
assets in Switzerland, France, and Germany. On the most recent
note interest payment date, in May 2012, two loans remained
outstanding, and the outstanding note balance was CHF0.1 million
and EUR75.1 million," 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 Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:

   http://standardandpoorsdisclosure-17g7.com/1111639.pdf

RATINGS LIST

Class            Rating
            To            From

Taurus CMBS (Pan-Europe) 2006-3 PLC
CHF0.1 Million, EUR447.75 Million Commercial Mortgage-Backed
Floating-Rate Notes

Ratings Lowered

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

Ratings Unaffected

A           AA- (sf)
X1          AA- (sf)
X2          AA- (sf)



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


AQUILA PLC: Fitch Cuts Rating on GBP10MM Class D Notes to 'CCCsf'
-----------------------------------------------------------------
Fitch Ratings has downgraded Aquila (Eclipse 2005-1) plc's class
D notes and affirmed all other note classes as follows:

  -- GBP24.6m class A (XS0213759425): affirmed at 'AAAsf';
     Outlook Stable

  -- GBP10.1m class B (XS0213759854): affirmed at 'AAAsf';
     Outlook Stable

  -- GBP10.3m class C (XS0213759938): affirmed at 'AAAsf';
     Outlook Stable

  -- GBP10m class D (XS0213760274): downgraded to 'CCCsf' from
     'Asf'; Recovery Estimate 100%

  -- GBP1.7m class E (XS0213760431): affirmed at 'BBBsf'; Outlook
     Stable

The downgrade of the class D notes reflects an interest shortfall
which incurred at the April 2012 interest payment date (IPD) that
in Fitch's opinion is unlikely to be fully recovered prior to the
redemption of the notes.  While interest payments are also
reduced on the class E notes, this class is not in arrears on
account of an available funds cap (AFC) applicable to it.  For
the class E notes, therefore, this reduction in interest has not
resulted in credit impairment or rating action, whereas the class
D notes, which are not subject to an AFC, are at risk of default.

The reduction in interest distributions reflects progressive
margin compression as higher-yielding loans repaid; the
irrevocable switch to sequential pay previously triggered by the
proportion of loans in special servicing rising above a
threshold; and an increase in senior expenses as a proportion of
the outstanding note balance.  The latter has proved particularly
difficult to predict owing to a rise in certain periodic costs,
the incurrence of extraordinary expenditure, and the lack of
quarterly provisioning of excess spread for scheduled costs
levied annually in arrears.  These three factors combined in an
increase in senior costs paid at the April IPD, which contributed
to an interest shortfall of circa GBP39,000 on the class D notes.

With the only remaining loan (the GBP56.7m Great Victoria loan)
due on 17 October 2012, there is little time in which to recover
this unless either senior expenses reduce significantly (the
chances of which appears remote) or the loan fails to repay on
schedule.  As to the latter, Fitch considers Great Victoria to be
a high quality, low leverage credit: secured by three multi-
tenanted retail and office properties located in London's West
End, and with a reported 47.5% loan-to-value ratio and 13% exit
debt yield, the borrower should face little impediment in
securing refinancing in a timely manner.  Although the strength
of the loan works against the class D noteholders' chances of
recovering the interest shortfall, it does underpin Fitch's
Recovery Estimate of 100% of bond principal and investment grade
ratings on all other classes (including the class E notes).


BIFFA: Lenders May Opt for Debt-for-Equity Restructuring
--------------------------------------------------------
Isabell Witt and Claire Ruckin at Reuters report that lenders to
Biffa are bracing themselves for a debt-for-equity restructuring
if it is unable to sell certain divisions to reduce its
GBP1 billion (US$1.57 billion) debt.

Biffa is expected to breach loan covenants this year due to
reduced waste volume on the back of lower consumption, Reuters
says.

According to Reuters, banking sources said on Tuesday that senior
lenders to Biffa, which is owned by Montagu Private Equity and
Global Infrastructure Partners, have now formed a steering
committee comprising Dexia, GE Capital, GSO Capital Partners, M&G
and HSBC.

The sources said that this group is in the process of appointing
restructuring advisers, Reuters notes.

Reuters relates that the sources said lenders of Biffa's
mezzanine loans are considering swapping their claims for equity
in the business because their holdings have become almost
worthless.

Senior lenders may also start working on a plan for a potential
debt-for-equity swap, but "it depends if they want to own the
business", a senior lender, as cited by Reuters, said.

Reuters says a debt-for-equity swap would dilute or wipe out
Montague's and GIP's investment.

Biffa's owners have been working with Goldman Sachs since the
start of the year to try and sell the business or parts of it,
Reuters discloses.  Reuters notes that sources said previously
any proceeds would be used to repay some debt.

Biffa is a UK waste manager.


KERLING PLC: Moody's Changes Outlook on 'B3' CFR to Negative
------------------------------------------------------------
Moody's Investors Service has changed the outlook on the B3
corporate family rating of Kerling plc and B3 ratings on its
senior secured notes to negative from stable.

"The change of the outlook to negative reflects our concerns that
Kerling's operational and financial performance will increasingly
come under pressure due to persisting weakness in its core
European PVC market, which remains affected by structural
overcapacity, given limited prospects for recovery in
construction end-user markets, especially in Southern Europe,"
says Gianmarco Migliavacca, a Moody's Vice President - Senior
Analyst and lead analyst for Kerling.

Ratings Rationale

The B3 rating and negative outlook reflect; (i) the limited
product and geographic diversification of Kerling's operations,
as all the group's manufacturing plants are based in Europe, and
are mainly producing PVC for the European markets; and (ii) its
highly levered capital structure and weak interest coverage
metrics, which limit the group's financial flexibility.

Kerling's debt coverage metrics have materially weakened since
the closing of the acquisition of Tessenderlo Chemie's PVC and
chloralkali operations last year. Gross debt/EBITDA, in
particular, has increased from 5.2x in 2010 to approximately 6.0x
as of December 2011, on a Moody's adjusted and pro-forma basis,
taking into account the full year contribution of the operations
of Tessenderlo Chemie acquired in Q3 2011. Pending the
implementation of the restructuring measures at the acquired
facilities, Kerling's profitability and credit metrics are likely
to remain relatively weak in the coming quarters, as market
environment remains weak. Notwithstanding strong management
track-record, Moody's notes that execution of the restructuring
plan in France and Belgium may entail delays and/or cost
overruns, adding pressure on the cash flow generation. The
company's focus on Europe also makes it particularly exposed to a
scenario of rapid deterioration in the domestic PVC markets.

On a more positive note, the rating is supported by the good
liquidity position of the company, which in the near term
benefits from: (i) EUR112 million of cash balance as of end of
March 2012, that will offer flexibility in funding restructuring
measures and additional investment in the recently acquired
facilities; and (ii) full availability under the committed EUR40
million revolver facility (reduced from EUR100 million), with a
higher degree of flexibility under the renegotiated covenant
package. At the end of March, 2012, Kerling also reported further
c. EUR80 million available under its EUR200 million
securitization facility, with maturity extended to January 2015.
Moody's expects that these external resources, as well as
positive FCF generation, would be sufficient to fund near-term
liquidity needs. These mainly include capex in 2012 (expected at
nearly EUR70 million, broadly in line with the amount of 2011)
and restructuring costs to be incurred for the turnaround of
Tessenderlo Chemie's operations.

Furthermore, Moody's positively notes that Kerling, unlike many
competitors, was able to maintain an adequate level of
profitability, while displaying a bottom-of-cycle EBITDA at
approximately EUR160 million during the recent downturn. The B3
rating is therefore supported by the strong management track
record, as well as (i) integrated and well invested production
facilities at its major sites located in Germany, UK, Norway and
Sweden, already largely converted to the more competitive
membrane production technology; and (ii) favorable long-term
feedstock arrangements with strategic suppliers and partners,
including its sister company Ineos Group Holdings SA ('Ineos', B2
positive), which underpin the relevant and sustainable cost
advantage of its operations, as well as its strong market shares
in Europe.

Rating sensitivities:

While Moody's does not anticipate positive rating pressure in the
near term, a stabilization of the outlook on the B3 rating could
be considered in an event of a sustained improvement in the PVC
market in Europe, as well as a strong execution of the
restructuring plan at the recently acquired Tessenderlo Chemie
operations, leading to an improved EBITDA margin above 9%,
stronger cash flow generation and a reversal in the leverage
trend, with Total debt/EBITDA declining below 5.5x.

Moody's would consider downgrading the B3 ratings if there is
significant deterioration in Kerling's operating performance from
the current levels, leading to: (i) materially lower
profitability on a sustained basis; (ii) negative FCF generation
and a weaker liquidity position; and (iii) a further increase in
leverage compared to 2011 levels, particularly if leading to a
covenant breach and making the revolver facility no longer
available.

Kerling is a leading polyvinyl chloride ('PVC') and caustic soda
producer in Europe, with additional positions in salt, brine and
sulphur chemicals. It was formed by Ineos Capital through a
combination of the Hydro ASA polymers business acquired in 2009,
Ineos Enterprises and Ineos ChlorVinyls. At the end of 2011,
Kerling reported an audited consolidated turnover of
approximately EUR2.4 billion and EBITDA of EUR193 million.

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


PERSEUS PLC: S&P Lowers Rating on Class C Notes to 'CCC-(sf)'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
Perseus (European Loan Conduit No. 22) PLC's class C notes to
'CCC- (sf)'. "At the same time, we affirmed our 'D (sf)' rating
on the class D notes. The remaining ratings in the transaction
are unaffected," S&P said.

"The rating action follows our review of the latest cash manager
report, which declares NAI (non-accruing interest) amounts
totaling GBP248,031.16 of the class C notes and the entire
balance of the class D notes (GBP4.69 million). These shortfalls
have occurred following the sale of the assets backing the Major
Belle loan, which has been in special servicing since October
2010, when the loan failed to repay at maturity. The asset sale
was insufficient to pay the outstanding loan amounts due," S&P
said.

"In March 2012, the special servicer, Morgan Stanley Mortgage
Servicing, confirmed that the property had been sold for a gross
sales price of GBP20 million. It also confirmed that the net
sales proceeds were GBP18.76 million (following deduction of
interest payable), of which GBP17.10 million was allocated to the
senior loan, due to a pari passu ranking capital expenditure
facility. The outstanding senior loan amount was approximately
GBP22 million," S&P said.

"The issuer has applied the GBP4.90 million NAI amount to the
class C and D notes, which, as a consequence, has reduced the
principal balance of these notes for the purposes of calculating
interest accrued. We have therefore lowered our rating on the
class C notes to 'CCC- (sf)', as on the next interest payment
date (IPD) we expect that the interest paid on class C will be
less interest owed on the full balance of this class. The class D
notes are already rated 'D (sf)', and we have affirmed this
rating," S&P said.

"ELOC 22 is a true-sale commercial mortgage-backed securities
(CMBS) transaction, which closed in December 2005. The
transaction is currently backed by three loans secured on
properties in the U.K. The outstanding principal balance of the
transaction is GBP102.1 million. Morgan Stanley Bank
International originated all of the loans between December 2004
and December 2005," S&P said.

       POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES

"We have taken the rating action based on our criteria for rating
European 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 Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:

   http://standardandpoorsdisclosure-17g7.com/1111639.pdf

RATINGS LIST

Class            Rating
          To                From

Perseus (European Loan Conduit No. 22) PLC
GBP514.538 Million Commercial Mortgage-Backed Floating-Rate Notes

Rating Lowered

C         CCC- (sf)         B- (sf)

Rating Affirmed

D         D (sf)

Ratings Unaffected

A2        A+ (sf)
A3        A+ (sf)
B         BBB (sf)


RANGERS FOOTBALL: Publishes Company Voluntary Arrangement
---------------------------------------------------------
FCBusiness reports that Duff and Phelps, Administrators of
Rangers Football Club, have published their proposal for a
Company Voluntary Arrangement on Tuesday.

A formal notice of the CVA meetings is being sent to all
creditors and shareholders of the Club providing further details
of the CVA process, FCBusiness relates.

According to FCBusiness, Paul Clark, Joint Administrator, said:
"This proposal offers the best return for all stakeholders given
the position the Club is in.  If approved by the creditors, the
CVA proposal will rescue the Club and finally enable the Company
to exit Administration.

"We should remember there are many stakeholders who have suffered
financial losses as a result of Rangers being placed into
Administration.  Regrettably, there is no solution available that
allows these parties to recover their losses in full.  However,
after a very intensive bidding process for the Club we can now
say that the offer being put forward as part of the CVA is the
best solution available to creditors and we hope they will
approve the proposal.

"Having issued the proposal, it is now a matter for the creditors
to consider what is on offer and it is their decision entirely as
to whether the terms of the CVA are acceptable."

The CVA proposal will be published on www.rangers.co.uk with
notification of the statutory meetings of creditors and
shareholders being sent to approximately 400 trade creditors,
over 6,000 fans holding debentures and all shareholders within
the Club, FCBusiness discloses.

The overall amount of money being made available for the CVA pot
from the Green consortium is GBP8.5 million, FCBusiness says.
The Administrators intend to make a distribution to creditors as
soon as they can, should the CVA proposal be approved, FCBusiness
notes.

The overall costs of the administration process will be deducted
from the funds available, FCBusiness states.

All of the Administrators' own costs are subject to approval by
creditors, FCBusiness notes.

The final amount available to creditors could be in excess of
GBP25 million, depending on the outcome of litigation.  The
precise amount will not be known for some months, FCBusiness
says.

At this stage, there are two outstanding issues that will have an
affect on the quantum of funds which can be distributed to
creditors, FCBusiness discloses.

The first matter is litigation brought by the Administrators
against the former lawyers for Rangers, Collyer Bristow,
FCBusiness says.  Should that be successful, further funds will
be made available to creditors, FCBusiness states.

The second is the outcome of the HMRC first tier tax tribunal,
FCBusiness states.  Should the tribunal find against Rangers that
will increase the quantum of HMRC's claim on funds available to
creditors, thus diluting the settlement available for all other
creditors, FCBusiness notes.

According to FCBusiness, the proposal will be considered at a
meeting of creditors to be held at Ibrox on June 14.

Should the CVA proposal be approved, there then follows a 28-day
period during which certain interested parties can make
application to the Court for the CVA decision to be reviewed,
FCBusiness discloses.  Once that period has elapsed the
Administrators will make immediate plans to conclude their
involvement and the Club will exit Administration, FCBusiness
states.

Duff & Phelps, FCBusiness says, will continue to fulfill a role
as the Supervisors of the CVA in attempting to maximise the level
of return to creditors from the on-going litigation against
Collyer Bristow.

                   About Rangers Football Club

Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/
-- is a United Kingdom-based company engaged in the operation of
a professional football club.  The Company has launched its own
Internet television station, RANGERSTV.tv.  The station combines
the use of Internet television programming alongside traditional
Web-based services.  Services offered include the streaming of
home matches and on-demand streaming of domestic and European
games, which include dedicated pre-match, half-time and post-
match commentary.  The Company will produce dedicated news
magazine and feature programs, while the fans can also access a
library of classic European, Old Firm and Scottish Premier League
(SPL) action.  Its own dedicated television studio at Ibrox
provides onsite production, editing and encoding facilities to
produce content for distribution on all media platforms.


RANGERS FOOTBALL: Administrators Face Conflicts of Interest Probe
-----------------------------------------------------------------
Rachael Singh at Accountancy Age reports that Rangers'
administrators from Duff & Phelps said they welcome an
investigation by their regulatory body into potential conflicts
of interest concerns.

Paul Clark and David Whitehouse, partners at Duff & Phelps, were
appointed joint administrators on February 14, Accountancy Age
relates.

According to Accountancy Age, allegations that the administrators
are conflicted came from a BBC television program which claimed
that Duff & Phelps partner David Grier knew about a deal which
would see the club hand over three years' worth of ticket sales
to company Ticketus.

In a response statement Mr. Grier, as cited by Accountancy Age,
said: "I categorically deny that at the time of the Craig Whyte
takeover of Rangers, I had any knowledge that funds from Ticketus
were being used to acquire the club.  This accusation is wrong,
highly defamatory and betrays a lack of understanding of the
facts."

It is understood that a complaint of their conflict has been
passed to regulatory body the Insolvency Practitioners
Association (IPA), which is currently investigating the issue,
Accountancy Age says.

Guidelines on the IPA Web site said the body aims to complete
investigations in six months but some can take longer,
Accountancy relates.

                   About Rangers Football Club

Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/
-- is a United Kingdom-based company engaged in the operation of
a professional football club.  The Company has launched its own
Internet television station, RANGERSTV.tv.  The station combines
the use of Internet television programming alongside traditional
Web-based services.  Services offered include the streaming of
home matches and on-demand streaming of domestic and European
games, which include dedicated pre-match, half-time and post-
match commentary.  The Company will produce dedicated news
magazine and feature programs, while the fans can also access a
library of classic European, Old Firm and Scottish Premier League
(SPL) action.  Its own dedicated television studio at Ibrox
provides onsite production, editing and encoding facilities to
produce content for distribution on all media platforms.


RANGERS FOOTBALL: May Face More Severe SFA Sanctions
----------------------------------------------------
The UK Press Association reports that Rangers Football Club has
overturned a 12-month transfer embargo in the Scottish law courts
-- but they could now face more severe sanctions as a result.

The club succeeded in their application for a judicial review at
the Court of Session in Edinburgh as Lord Glennie backed their
assertion that a Scottish Football Association judicial panel had
exceeded its powers in administering the ban on registering
players, UKPA relates.

The judge accepted the club's case that only the specific
punishments laid down under the related rule should be imposed on
the club for bringing the game into disrepute, UKPA discloses.
However, he proposed that the decision be referred back to an SFA
appeal tribunal, which had upheld the decision that a transfer
ban was appropriate punishment for a failure to pay more than
GBP13 million in tax last season, UKPA notes.

The explicit punishments stated in the SFA's rule 66 are a
maximum GBP100,000 fine, suspension or expulsion from
participation in the game, ejection from the Scottish Cup or
termination of membership, according to UKPA.

The independent three-man SFA disciplinary panel had considered
ending Rangers' membership, saying they viewed the offence second
only to match-fixing in terms of seriousness, but decided a
transfer ban was more appropriate, UKPA discloses.

Having already administered the maximum fine, an SFA appeal would
therefore only be entitled to throw them out of the Scottish Cup
for a spell or else stop the club playing football altogether in
Scotland, UKPA says.

According to UKPA, the ruling brings fresh uncertainty to the
club on the day administrators published a Company Voluntary
Arrangement proposal.  Rangers are still subject to a Scottish
Premier League transfer embargo but that will automatically be
lifted if they come out of administration, which could happen as
early as July 12, UKPA notes.

                   About Rangers Football Club

Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/
-- is a United Kingdom-based company engaged in the operation of
a professional football club.  The Company has launched its own
Internet television station, RANGERSTV.tv.  The station combines
the use of Internet television programming alongside traditional
Web-based services.  Services offered include the streaming of
home matches and on-demand streaming of domestic and European
games, which include dedicated pre-match, half-time and post-
match commentary.  The Company will produce dedicated news
magazine and feature programs, while the fans can also access a
library of classic European, Old Firm and Scottish Premier League
(SPL) action.  Its own dedicated television studio at Ibrox
provides onsite production, editing and encoding facilities to
produce content for distribution on all media platforms.


THEATRE HOSPITALS: Fitch Cuts Ratings on Two Note Classes to 'BB'
-----------------------------------------------------------------
Fitch Ratings has downgraded Theatre (Hospitals) No. 1 Plc's and
Theatre (Hospitals) No. 2 Plc's class C and class D floating-rate
notes.  The Outlooks are Negative.

The downgrades reflect: (i) the expected deterioration of the
opco's (GHG/BMI Healthcare) performance (taking into account --
among others -- Bupa's recent fee reduction), (ii) the worsening
of the notes' Fitch's base case loans-to-value ratios (LTVs),
(iii) the potential restructuring of the transaction in light of
the looming refinancing risk of the propco whole loan in October
2013, and (iv) the recent reduction in information flow, meaning
the agency no longer has access to the opco's management (which
makes Fitch's assessment of the tenant's capacity to pay the rent
more difficult).

The opco's EBITDAHR (with TTM March 2012 down to GBP200.5m by
2.1% since TTM December 2010) is expected to decrease further to
potentially around GBP185m by 2013 as a result of rising
operating costs offsetting flat (if not declining) revenues.
Fitch understands that this trend in revenues could gain momentum
due to continuing struggling self-pay and private medical
insurance (PMI) revenues.  PMI, which represents over two-thirds
of BMI revenues, has recently been impaired by reductions in
pricing, notably with Bupa, although the details of the
renegotiation announced earlier this year have not been confirmed
to Fitch by management.  Given the difficulties that have been
facing the PMI sector, with the number of UK subscriptions down
by 8.3% since 2009 according to Laing & Buisson, Fitch is
concerned that this may also set a precedent and lead to other
unfavorable renegotiations with other key PMI providers.

Fitch's base case class C and D notes LTVs have increased as a
result of both Fitch's lower projected base case EBITDAHR and the
more conservative valuation assumptions with increases in both
the sustainable rent factor to 1.8x from 1.6x and net initial
yield (NIY) to 8.5% from 8.0%.  This results in a sustainable
rent being 20% lower than the current actual rent (which is
subject to a 2.5% fixed uplift) and LTVs for the class C and D
notes up by c. 10 percentage points to 63.1% and 73.1%
respectively.  If the borrower's senior-ranking interest rate
swap mark-to-market (estimated to be up by two-thirds to over
GBP450m) was to crystallize the LTVs would materially increase to
respectively 99.9% and 109.9%.  However, Fitch currently has no
reason to believe that the swap would be broken at loan maturity,
which would only occur if the propco loans are accelerated or if
any property is disposed of after loans maturity.

In conjunction with these worsening metrics, Fitch is concerned
about the significantly reduced amount of information provided by
GHG, which owns both the opco and propco, notably in light of the
looming refinancing risk of the whole loan in 2013.  This is
despite the positive tail period with the notes' maturing in
2031.  Other concerns include the expected deterioration of
opco's performance, the scale of which is difficult to ascertain
and the recent overhaul of management as both the CEO and CFO
have left the company.  Fitch would normally expect to meet the
opco's management in order to gain further insight as to what has
or could affect the opco's performance, and hence the servicing
of the rent.

To date, Fitch notes that the servicer, Capita, is also facing
certain information restrictions, according to the RIS notice it
published on 24 May 2012.  Following the servicer's multiple
failed attempts to meet with the borrower and the latter's
potential gearing towards a restructuring (having notably hired
Rothschild as financial adviser), the servicer has appointed Paul
Hastings as legal advisers and is currently seeking financial
advisers.  In addition, Fitch understands that the borrower has
appointed a previous director from the restructuring advisory
group, Alvarez & Marsal Real Estate Advisory Services, as manager
of the propco.  It is unclear when a restructuring proposal would
be submitted to the servicer but it may happen earlier than next
year.  Given the complexity of the transaction and its multiple
layers of creditors, hybrid CMBS/WBS structure, large scale of
operations and debt (with c. GBP1.55bn of propco loans), plus the
wider macro industry issues notably with healthcare funding, the
Outlooks on the notes remain Negative and the agency will closely
monitor the transaction.

Fitch's understanding of the documentation suggests that the
class A noteholders (with over 50.1% of votes) could instruct the
servicer with regard to certain amendments such as loan maturity
extension and reduction of rent, which may not necessarily be in
the best interest of the most junior bondholders.  The ratings
could be further adversely affected if the opco's EBITDAHR
performance is below expectations, due to a higher impact of
Bupa's downward fee renegotiations or if the restructuring
process turns out to be unfavorable for the junior notes.

The transactions are securitizations of loans to property-owning
entities (the propco) secured on 35 private hospitals operated by
BMI Healthcare (BMI; the opco), the acute private hospital
division of General Healthcare Group (GHG).  The propco's
principal source of repayment under the term loan is the net rent
received under leases payable by tenants operating within BMI.

BMI is the largest independent provider of private patient care
in the UK, operating a total of 70 hospitals with over 3,000
beds.  Both issuers are identical in structure and their notes
rank equally within one another.

The ratings actions are as follows:

Theatre (Hospitals) No.1 plc:

  -- GBP51.4m class C notes: downgraded to 'BBB' from 'A';
     Outlook Negative

  -- GBP51.4m class D notes: downgraded to 'BB' from 'BBB';
     Outlook Negative

Theatre (Hospitals) No.2 plc:

  -- GBP34.3m class C notes: downgraded to 'BBB' from 'A';
     Outlook Negative

  -- GBP34.3m class D notes: downgraded to 'BB' from 'BBB';
     Outlook Negative


THOMAS COOK: Shareholders Back Turnaround Plans
-----------------------------------------------
Jamie Grierson at The Scotsman reports that Thomas Cook's
turnaround plans received a significant boost on Tuesday, May 29,
as shareholders overwhelmingly voted for two key disposals,
without which the holiday giant warned it could collapse.

According to the Scotsman, some 99.99% of proxy shareholder votes
backed the planned sale and leaseback of part of its aircraft
fleet and the disposal of five Spanish hotels.

Major stakeholders including fund manager Invesco, Marathon and
Standard Life had previously expressed support for the
resolutions, the Scotsman relates.

Failure to support the move could have jeopardized the company's
recent GBP1.4 billion deal with lenders, including Royal Bank of
Scotland and Barclays, to extend the maturity of its bank loans
to 2015, the Scotsman notes.

Thomas Cook Group plc is a United Kingdom-based company.  The
Company, together with its subsidiaries, is engaged in the
provision of leisure travel services.  Its main brands include
Airtours, Aspro, Club 18-30, Cresta, Manos, Neilson, Sunset,
Sunworld Holidays, Swiss Travel Service, Thomas Cook, Thomas Cook
Style Collection, Thomas Cook Signature and Thomas Cook Tours.
It has six geographic operating divisions: United Kingdom,
Central Europe, West and East Europe, Northern Europe, North
America and Airlines Germany.


* Proskauer Hires Dewey & LeBoeuf's London Bankruptcy Team
----------------------------------------------------------
Proskauer Rose LLP disclosed the hiring in London of a team of
restructuring and insolvency lawyers led by Partners Mark
Fennessy and Hazel Miller, who join from Dewey & LeBoeuf, where
Mr. Fennessy headed the European Restructuring Practice.

Mr. Fennessy and Ms. Miller's focus are in corporate
restructuring, special situations (involving financial
restructuring mandates, including advice on funds-based,
structured products and leveraged financing transactions) and
insolvency litigation.  The two have advised on many of the major
restructurings of the past few years, ranging from structured
investment vehicles and leveraged buyout restructurings, to major
financial and corporate mandates, including MF Global, Lehman
Brothers, Wind Hellas, General Motors and several commercial
mortgage-backed securities restructurings.

"This is a first-class group of London-based restructuring
lawyers who will combine with our U.S. team to provide clients
with global service on restructuring and bankruptcy matters,"
said Proskauer Chairman Joseph M. Leccese.

"I had the pleasure of working previously with Mark and Hazel and
have great respect and admiration for them.  We are excited that
our clients will benefit from the experience of our group as we
continue to build out our capabilities globally," said Proskauer
Partner Martin Bienenstock.

"We are delighted to be joining such a dynamic firm working
alongside Proskauer's excellent team of lawyers.  This is an
excellent fit for our Group," said Mr. Fennessy.

                         About Proskauer

Founded in 1875, Proskauer Rose LLP -- http://www.proskauer.com/
-- is a global law firm widely recognized for its leadership in a
variety of legal services provided to clients worldwide from
offices in Beijing, Boca Raton, Boston, Chicago, Hong Kong,
London, Los Angeles, New Orleans, New York, Newark, Paris, Sao
Paulo and Washington, DC.



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


* EUROPE: EU Plan to Hit Unsecured Creditors at Failing Banks
-------------------------------------------------------------
Jim Brunsden and Ben Moshinsky at Bloomberg News report that the
European Union will seek to give regulators the power to impose
writedowns on senior unsecured creditors at failing banks as part
of measures to prevent taxpayers from footing the bill for saving
crisis-hit lenders.

The writedown powers would apply to senior unsecured debt and
derivatives, while some other claims, including secured debt and
deposits that are protected by government guarantee programs,
would be shielded from the losses, according to draft plans
obtained by Bloomberg News.  Regulators would have the so-called
bail-in powers from the start of 2018, Bloomberg states.

Any bail-in of bank debt would "be accompanied by the removal of
the management responsible for the problems of the institution,"
according to the draft proposals, prepared by EU Financial
Services Commissioner Michel Barnier's staff at the European
Commission.  The bank would face restructuring "in a way that
addresses the reasons for its failure."

The plans, scheduled to be published on June 6, will have to be
agreed on by finance ministers from the EU's 27 member states and
members of the European Parliament before they become law,
Bloomberg says.

The commission's draft proposal said that the bail-in powers must
be in place across the EU by the start of 2018, Bloomberg notes.
According to the draft rules, as well as writing down claims,
national regulators would also have the power to convert them
into equity, Bloomberg discloses.

"In order to reassure investors and market counterparties and to
minimize its impact it is necessary not to apply the bail-in tool
until Jan. 1, 2018," Bloomberg quotes the commission as saying in
the document.


* EUROPE: Moody's Says Unrated LBOs Face Refinancing Burden
-----------------------------------------------------------
The refinancing burden of unrated European leveraged buyouts
(LBOs) remains challenging, says Moody's investors Service in a
new Special Comment published on May 29 showing that 254
companies face EUR133 billion in LBO-related debt maturing
through 2015. At least a quarter of these companies could default
with the figure doubling if external factors close the high-yield
market for extended periods.

The new report, entitled "Unrated European LBOs Remain Under
Pressure from Refinancing Burden," is now available on
www.moodys.com.

"Over half the debt maturing through 2015 is concentrated in 36
companies, each of which has over EUR1 billion of debt, says
Chetan Modi, Head of Moody's European leveraged finance and
author of the report. "While this debt is broadly dispersed
across industries, there is a concentration of debt to be
refinanced in 2014."

The results of Moody's study are consistent with the rating
agency's previous analyses, but these companies are now one year
closer to the 2014-15 refinancing peak. This refinancing peak
remains worrisome, given the weak macroeconomic environment and
the generally low credit quality of this debt.

In the report, Moody's notes that the key factors determining the
type of refinancing method companies choose will be the amount of
debt and its credit quality. Many larger companies will seek to
refinance with high-yield bonds, however they will need to be
sufficiently creditworthy to achieve this.

The openness of both European and US high-yield markets will
largely determine how this refinancing burden is navigated.
Market access will remain in "windows", and Moody's expects new-
issuer pricing to remain expensive.

Moody's anticipates that more companies will attempt to amend-
and-extend (A&E) loans in 2012. Lending options for European
collateralized loan obligations (CLOs), including for A&Es, will
become increasingly constrained, particularly from 2013, as their
reinvestment periods end. This restriction will precipitate more
fundamental debt restructurings for weaker credits.


                            *********

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 * * *