TCREUR_Public/120606.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Wednesday, June 6, 2012, Vol. 13, No. 112

                            Headlines



C R O A T I A

* CITY OF ZAGREB: Moody's Changes Ratings Outlook to Negative


F R A N C E

PAPETERIE DU DOUBS: In Liquidation; Lebanese Firm May Take Over
* FRANCE: Life Insurers See Continued Outflows in 2012


G E R M A N Y

LEHMAN BROTHERS: Has Deal With Administrator of German Unit
PETROPLUS HOLDINGS: Gunvor Agrees to Buy Ingolstadt Refinery
PRIME 2006-1: S&P Lowers Ratings on Two Note Classes to 'CC'


I R E L A N D

EIRCOM GROUP: Esot Scheme Members to Share Tax-Free Windfall
MAGNETITE V: Moody's Downgrades Rating on Class D Notes to 'B3'
* IRELAND: 1,700 Companies May Collapse This Year


K A Z A K H S T A N

KAZTRANSGAS: S&P Raises Long-Term Corp. Credit Rating to 'BB+'


N E T H E R L A N D S

EUROCREDIT CDO IV: S&P Lifts Rating on Class S Comb Notes to 'BB'


P O L A N D

BANK OCHRONY: Fitch Affirms 'BB' Viability Rating
LOT POLISH: Turkish Airlines Backs Away From Takeover Plan
PBG SA: Opts to File for Bankruptcy; In Talks with Creditors
PBG SA: S&P Cuts Corp. Credit Rating to 'SD' on Standstill Deal


P O R T U G A L

* PORTUGAL: To Inject EUR6.6-Bil. Capital Into Three Banks


R U S S I A

AHML OJSC: S&P Assesses Stand-Alone Credit Profile at 'bb+'
COMMERCIAL BANK: S&P Affirms 'B' Counterparty Credit Rating


S P A I N

* SPAIN: Must Seek EU Funds to Rescue Failed Lenders, Botin Says


U N I T E D   K I N G D O M

B3 INDUSTRIES: Manchester Cables and FTTX in Administration
EMERGENCY SERVICES: Wound Up After Insolvency Service Probe
ESPRESS LIMITED: Closed Down After Insolvency Service Probe
EUROHOME UK 2007-1: S&P Lowers Rating on Class B1 Notes to 'B'
LUMINAR GROUP: Lenders to Face "Significant" Losses on Debts

NEWGATE FUNDING: S&P Cuts Ratings on Five Note Classes to 'B-'
OAK HILL II: S&P Affirms 'BB' Rating on Class E Deferrable Notes
RANGERS FC: Administrators Agree to Cap Fees Prior to Appointment
SPONSORED PRESS: Liquidated After Insolvency Service Probe
* UNITED KINGDOM: Numbers of Retailers in Administration Up 38%


                            *********


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C R O A T I A
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* CITY OF ZAGREB: Moody's Changes Ratings Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service has changed the outlook of the City of
Zagreb to negative from stable. The rating was affirmed.

Ratings Rationale

This action follows Moody's decision to change the outlook of the
sovereign bond rating of Croatia to negative from stable on 31
May 2012. The ratings on the Sovereign have been affirmed.

"Moody's action on the City of Zagreb reflects the close
financial and operational linkages between the state and local
governments in Croatia. Zagreb is highly dependent on
intergovernmental revenues in a form of shared taxes and central
government transfers, representing around 70% of operating
revenues in 2011", said Gjorgji Josifov, Assistant Vice President
and lead analyst for this credit. Despite having planned with
more conservative budget assumptions, if Croatia's macroeconomic
conditions deteriorate, this would impact the revenues of the
City of Zagreb and will make its fiscal consolidation goals more
difficult to achieve.

The outlook change also takes in account Moody's sovereign
decision that reflects concerns about the implementation risks
surrounding the Croatian government's fiscal deficit reduction
plan which is aimed at putting the country's public finances on a
sustainable path as well as the heightened uncertainties about
Croatia's economic growth prospects over the short and medium
term. Its wealthy status among Croatian cities exposes Zagreb to
adverse decisions from central government either aimed at
redistributing resources to other cities or to contribute
achieving fiscal consolidation.

"Zagreb's rating is underpinned by (i) its solid gross operating
balance, averaging 21.34% of operating revenue in the last five
years; (ii) balanced financial performance; and (iii) very low
direct debt burden accounted for only 8% of operating revenue",
said Mr. Josifov. At the same time the rating is constrained by
the limited revenue flexibility, the city's significant indirect
debt exposure through its majority-owned company, Zagrebacki
Holding as well as the exposure of Zagreb's revenue base to
Croatia's financial and economic situation.

As the capital of Croatia, Zagreb is the country's political,
economic and cultural centre, and major transportation hub. The
city accounts for 18% of the country's population, constitutes
almost one-third of national GDP, and with its economic potential
offers diverse business opportunities, as evidenced by the fact
that it attracts the lion's share (75%) of foreign direct
investment (FDI) in the country. Zagreb's economy is clearly the
strongest in the country, with local GDP per capita almost double
of the national average.

What Could Move The Ratings Up/Down

Any stabilization or positive change of the sovereign rating
could determine upward pressure on the City of Zagreb, only if
associated with a significant improvement in the city's budgetary
performance and liquidity position combined with sustained
decrease in net direct and indirect debt.

Any deterioration of Croatia's rating will determine a downward
change of Zagreb's rating. Further downward pressure could be
also influenced by a deterioration in the city's operating
performance and growth in overall debt exposure.

Principal Methodology

The methodologies used in this rating were The Application of
Joint-Default Analysis to Regional and Local Governments
published in December 2008, and Regional and Local Governments
Outside the US published in May 2008.



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F R A N C E
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PAPETERIE DU DOUBS: In Liquidation; Lebanese Firm May Take Over
---------------------------------------------------------------
EUWID reports that Papeterie du Doubs was not able to solve its
financial problems and is now in liquidation. However, a Lebanese
company intends to take over the paper manufacturer and restart
packaging paper production in September, the report says.

Eric Gravier, the company's deputy managing director, told EUWID
that all operations were ceased on May 22 and the workforce was
made redundant. However, negotiations with a Lebanese company
which may take over the company's site and operations are
ongoing, EUWID relates.  The offer is currently being examined
and a decision is expected for the end of June, the report notes

Papeterie du Doubs has been in receivership since Jan. 30, 2012.
The commercial court of Besancon originally set a six-month
observation period closing at the end of July, EUWID noted.

Papeterie du Doubs is a French manufacturer of packaging papers.
Papeterie du Doubs produces testliner and corrugating medium with
an annual capacity of around 80,000 tons.


* FRANCE: Life Insurers See Continued Outflows in 2012
------------------------------------------------------
In the first four months of 2012, the French life insurance
industry continued to report negative net flows, says Moody's
Investors Service in a Special Comment published on June 4. While
these outflows, which are the result of both structural and
cyclical factors, create a profitability challenge, they do not
yet present a liquidity issue.

The new report is entitled "French life insurers see continued
outflows in 2012: a profitability challenge, but not yet a
liquidity issue".

"The reported net outflows do not constitute a liquidity problem
for the French life insurance industry at this stage," says
Benjamin Serra, a Moody's assistant vice president -- analyst and
author of the report. "However, net outflows do create a medium-
term profitability challenge, at a time when there are limited
opportunities to find alternative sources of revenues and
profits. A significant increase in outflows in the coming
quarters would add more pressure on life insurers' profitability,
although this is not our central scenario."

Although the trend of decreasing inflows and increasing outflows
is affecting all market participants, the net flows (gross
inflows less gross outflows) position varies by company. Net
outflows are more significant for some insurers, especially those
specializing in the affluent segment and selling through non-
proprietary networks.

In January 2012, Moody's maintained a negative outlook on the
French life insurance sector.



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G E R M A N Y
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LEHMAN BROTHERS: Has Deal With Administrator of German Unit
-----------------------------------------------------------
Lehman Brothers Holdings Inc. asked Judge James Peck of the U.S.
Bankruptcy Court for the Southern District of New York to approve
a settlement of claims with the administrator of Lehman Brothers
Capital GmbH.

Under the deal, LB Capital will have allowed unsecured claims
totaling more than US$36.9 million against Lehman, and another
US$209,132 in unsecured claim against the company's special
financing unit.  Lehman's commercial paper unit will have
GBP72,998 in unsecured claim against LB Capital.

The claim against Lehman stemmed from its guarantee of amounts
due from Lehman Brothers Bankhaus AG related to an intercompany
receivable for LB Capital's deposit of certain cash receipts.

The two other claims were filed against Lehman's special
financing unit and LB Capital related to non-trading general
intercompany accounts, according to court papers.

The proposed settlement is formalized in an 11-page agreement, a
copy of which is available for free at:

     http://bankrupt.com/misc/Lehman_LBCapitalDeal.pdf

LB Capital, a German affiliate of Lehman, was created for trading
with third parties.  The trades, which occurred around 2003 and
2004, generated cash that was placed with Lehman and LB Bankhaus.
In exchange for such cash, LB Capital, which is under insolvency
proceeding, received intercompany receivables from both
companies.

A court hearing on the proposed settlement is scheduled for
June 13, 2012.  Objections are due by June 5, 2012.

                     About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.

The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion.  Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees.  Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.

Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history.  Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.

               International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd.  Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008.  The joint
administrators have been appointed to wind down the business.

Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16.  Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-700)


PETROPLUS HOLDINGS: Gunvor Agrees to Buy Ingolstadt Refinery
------------------------------------------------------------
Robert Perkins at Platts reports that oil trading group Gunvor
has agreed to acquire a second plant from Petroplus Holdings,
cementing the arrival of a new class of European plant owners
from trading houses to Russian oil companies.

According to the report, the Swiss-based trader said Gunvor,
which is co-owned by Russian billionaire Gennady Timchenko,
agreed to buy the 100,000 b/d Ingolstadt refinery in southern
Germany and restart it as soon as possible.

Platts notes that the deal for the Petroplus plant is the second
for the oil trader after Gunvor bought the collapsed refiner's
Belgium refinery in early March in a deal which marked its first
foothold in the refining business.

The report relates that Gunvor said it is committed to operating
the refinery on a "long-term basis," adding that all existing
refinery staff will be retained.

Without disclosing financial details of the deal, Gunvor said the
acquisition includes Ingolstadt's related German marketing
activities, adds Platts.

                          About Petroplus

Based in Zug, Switzerland, Petroplus Holdings AG is one of
Europe's largest independent oil refiners.

Petroplus was forced to file for insolvency in late January after
struggling for months with weak demand due to the economic
slowdown in Europe and overcapacity amid tighter credit
conditions, high crude prices and competition from Asia and the
Middle East, MarketWatch said in a March 28 report.

According to MarketWatch, Petroplus said in March a local court
granted "ordinary composition proceedings" for a period of six
months. As part of the court process, Petroplus intends to sell
its assets to repay its creditors.

Some of Petroplus' units in countries other than Switzerland have
filed for "different types of proceedings" and are currently
controlled by court-appointed administrators or liquidators,
which started the process to sell assets, including the company's
refineries.


PRIME 2006-1: S&P Lowers Ratings on Two Note Classes to 'CC'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
PRIME 2006-1 Funding Limited Partnership's (PRIME 2006-1) class
A, B, C, D, and E notes. "At the same time, we affirmed our
rating on the working capital loan (WCL) in the transaction," S&P
said.

"PRIME 2006-1 is a German small and midsize enterprise (SME)
transaction. The underlying collateral comprises payment claims
of the issuer against German SMEs under profit participation
agreements (PPAs). In the event of an insolvency or liquidation
of the company, the issuer's claims under the PPAs will be
subordinated to the claims of all other creditors of the company,
but rank ahead of shareholders," S&P said.

"The rating actions follow further deterioration in the credit
quality of the portfolio comprising PPAs. Since our previous
review of the transaction on Aug. 19, 2011, PRIME 2006-1 has
experienced four principal deficiency events (PDEs) with a
combined principal balance of EUR15 million (8.40% of the current
outstanding liabilities). From the latest available investor
report of October 2011, we see that three out of the four
additional PDEs were caused by nonpayment of interest and one by
insolvency. This brings the total number of PDEs to 10, totaling
EUR54.5 million, and representing about 27.74% of the initial
portfolio balance. Including the additional PDEs, the current
balance of the principal deficiency ledger (PDL) -- which
represents the aggregate notional amount of principal
deficiencies incurred in the portfolio minus all amounts used to
redeem the notes -- is EUR35.55 million. This compares with a PDL
balance of EUR23.76 million at our previous review," S&P said.

"Consequently, to reduce the PDL balance on each annual payment
date, the issuer continues to repay the notes in order of
seniority starting with the class A notes--using proceeds
remaining after payment of senior expenses, interest on the class
A, B, C, D, and E notes, and amounts due under the working
capital loan. This has resulted in a further reduction in the
class A notes outstanding principal amount by EUR3.2 million
since our previous review," S&P said. The current outstanding
balance of the class A notes is about 84% of the initial balance.

"Our review included an assessment of the single-obligor
concentration risk, as the underlying portfolio lacks
granularity, in our view. According to the investor report, the
transaction currently has 19 performing obligors (excluding those
where a principal deficiency event has occurred), with the
largest 10 composing about 81% of the performing portfolio
balance," S&P said.

"For single-obligor concentration risk, we have analyzed the
effect of defaults of the largest obligors in the portfolio. In
this analysis, we first calculate the performing balance of the
assets (EUR142 million), excluding those PPAs for which a PDE has
occurred. In the next step, we look at top obligor concentrations
and evaluate the net effect of subsequent defaults on the
performing balance. Finally, we examine whether the post-default
balance is sufficient to cover the current outstanding balance of
the notes (taking into account all note repayments that have been
effected since closing as a result of the PDL curing mechanism).
Given the subordinated nature of the issuer's claims under the
PPAs, in this analysis we have assumed a recovery rate of zero
for the PPAs that have triggered a principal deficiency event
(EUR36.5 million)," S&P said.

"In our view, the lack of granularity in the underlying portfolio
means that our ratings in this transaction are more sensitive to
defaults than those in transactions with more granular
portfolios. Although the class A notes benefit from the diversion
of excess spread to reduce the PDL balance, our analysis of the
risk posed by further PDEs indicates that the credit enhancement
available to the class A notes is no longer commensurate with our
current rating on this class of notes. We have therefore lowered
to 'B+ (sf)' from 'BB- (sf)' our rating on this class of notes.
In our view, the class B notes show a level of resilience that we
consider to be in line with a 'B- (sf)' rating, so we have
therefore lowered to 'B- (sf)' from 'B (sf)' our rating on this
class of notes," S&P said.

"According to our analysis, the credit enhancement available to
the class C notes has further reduced since our previous review,
as a result of the additional PDEs, and does not cover the
default of the largest obligor. We have therefore lowered to
'CCC- (sf)' from 'CCC (sf)' our rating on this class of notes,"
S&P said.

"The class D and E notes have no credit enhancement remaining,
according to our analysis. Considering the current PDL balance,
and under our recovery assumptions, the class D and E notes are
highly vulnerable to nonpayment, in our view. We have therefore
lowered to 'CC (sf)' from 'CCC- (sf)' our ratings on these
classes of notes," S&P said.

"According to the information we have received from the portfolio
manager, the remaining outstanding principal balance of the WCL
is EUR1.05 million. The issuer repays the WCL on each payment
date, after payment of senior expenses and interest payments on
the class A to E notes, in an amount of up to EUR2 million. From
the information we received from the portfolio manager, full
repayment of the remaining outstanding amount is expected to
occur on the next payment date in August 2012. In our view, the
level of credit enhancement available to the WCL is commensurate
with our current rating. We have therefore affirmed our 'AAA
(sf)' rating on the WCL," S&P said.

RATINGS LIST

Class             Rating
           To               From

PRIME 2006-1 Funding Limited Partnership
EUR207.5 Million Floating-Rate Notes

Ratings Lowered

A          B+ (sf)          BB- (sf)
B          B- (sf)          B (sf)
C          CCC- (sf)        CCC (sf)
D          CC (sf)          CCC- (sf)
E          CC (sf)          CCC- (sf)

Rating Affirmed

WCL        AAA (sf)

WCL-Working capital loan.



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EIRCOM GROUP: Esot Scheme Members to Share Tax-Free Windfall
------------------------------------------------------------
Ciaran Hancock at The Irish Times reports that more than 14,000
current and former staff of Eircom Group are set to share a tax-
free windfall of about EUR125 million following a decision by the
board of the employee share ownership trust (Esot) to wind it up
after the company recently emerged from examinership with new
owners.

This would amount to an average tax-free payout to Esot scheme
members of EUR8,928, the Irish Times notes.

The Irish Times has learned that the Esot will distribute EUR85
million in Eircom preference shares to members within a month or
so.

The preference shares were segregated from the general assets of
Eircom, which gave them protection from creditors and meant they
did not form part of the examinership process, the Irish Times
states.

Under an agreement with the Revenue Commissioners, the Esot was
due to be wound down in 2014 but these plans have been
accelerated following Eircom's examinership process, the Irish
Times says.  The examinership resulted in the company's gross
debts being reduced to EUR2.35 billion, from EUR4 billion
previously, and senior lenders taking 100 per cent ownership of
the company, the Irish Times notes.

Prior to the examinership, the Esot owned about one-third of
Eircom, with Singapore-based STT holding the balance of the
shares, according to the Irish Times.

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.


MAGNETITE V: Moody's Downgrades Rating on Class D Notes to 'B3'
---------------------------------------------------------------
Moody's Investors Service has taken action on the ratings of the
following notes issued by Magnetite V CLO, Limited:

U.S.$20,000,000 Class B Second Priority Floating Rate Deferrable
Notes Due 2015, Upgraded to Aaa (sf); previously on July 22, 2011
Upgraded to Baa1 (sf);

U.S.$19,000,000 Class C Third Priority Floating Rate Deferrable
Notes Due 2015, Upgraded to Baa1 (sf); previously on July 22,
2011 Upgraded to Ba1 (sf);

U.S.$11,000,000 Class D Fourth Priority Floating Rate Deferrable
Notes Due 2015 (current outstanding balance of $10,296,898),
Downgraded to B3 (sf); previously on July 22, 2011 Upgraded to
Ba3.

Ratings Rationale

According to Moody's, the rating actions taken on the notes are
primarily a result of deleveraging of the senior notes and an
increase in the transaction's overcollateralization ratios since
the rating action in July 2011. Moody's notes that the Class A
Notes have been paid down by approximately 52% or $71.0 million
since the last rating action. Based on the latest trustee report
dated April 30, 2012, the Class A, Class B, Class C, and Class D
overcollateralization ratios are reported at 192.4%, 147.1%,
120.2% and 109.3%, respectively, versus May 2011 levels of
144.47%, 125.93%, 112.25%, and 106.01%, respectively.

Notwithstanding benefits of the deleveraging, Moody's notes that
the underlying portfolio includes a number of investments in
securities that mature after the maturity date of the notes.
Based on the March 2012 trustee report, securities that mature
after the maturity date of the notes currently make up
approximately 22.3% of the underlying portfolio. These
investments potentially expose the notes to market risk in the
event of liquidation at the time of the notes' maturity.

Additionally, the rating downgrade on the Class D notes is the
result of a correction to Moody's modeling of the
Overcollateralization Tests in its cash flow analysis. Due to an
input error, the numerator of Overcollateralization Ratios was
discounted substantially during previous rating actions, thereby
causing Overcollateralization Tests to fail in the scenarios.
Because of this failure, both interest and principal proceeds
were used to pay down rated notes instead of interest being used
to pay preference shares. The error has been corrected, and the
rating action reflects the correct modeling of the
overcollateralization tests.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as par, weighted average rating
factor, diversity score, and weighted average recovery rate, may
be different from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of $123.7 million,
defaulted par of $1.7 million, a weighted average default
probability of 13.22% (implying a WARF of 2,722), a weighted
average recovery rate upon default of 48.56%, and a diversity
score of 38. The default and recovery properties of the
collateral pool are incorporated in cash flow model analysis
where they are subject to stresses as a function of the target
rating of each CLO liability being reviewed. The default
probability is derived from the credit quality of the collateral
pool and Moody's expectation of the remaining life of the
collateral pool. The average recovery rate to be realized on
future defaults is based primarily on the seniority of the assets
in the collateral pool. In each case, historical and market
performance trends and collateral manager latitude for trading
the collateral are also factors.

Magnetite V CLO, Limited, issued in September 2003, is a
collateralized loan obligation backed primarily by a portfolio of
senior secured loans.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Approach to Rating Collateralized Loan Obligations"
rating methodology published in June 2011.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses to test the impact on all
rated notes of various default probabilities. Below is a summary
of the impact of different default probabilities (expressed in
terms of WARF levels) on all rated notes (shown in terms of the
number of notches' difference versus the current model output,
where a positive difference corresponds to lower expected loss),
assuming that all other factors are held equal:

Moody's Adjusted WARF -- 20% (WARF 2,178)

Class A: 0
Class B: 0
Class C: +3
Class D: +1

Moody's Adjusted WARF + 20% (WARF 3,267)

Class A: 0
Class B: -1
Class C: -1
Class D: -1

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy and 2) the large
concentration of speculative-grade debt maturing between 2014 and
2016 which may create challenges for issuers to refinance. CDO
notes' performance may also be impacted by 1) the manager's
investment strategy and behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Sources of additional performance uncertainties are described
below:

1) Deleveraging: The main source of uncertainty in this
transaction is whether deleveraging from unscheduled principal
proceeds will continue and at what pace. Deleveraging may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the manager, which may have
significant impact on the notes' ratings.

2) Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes an asset's terminal value
upon liquidation at maturity to be equal to the lower of an
assumed liquidation value (depending on the extent to which the
asset's maturity lags that of the liabilities) and the asset's
current market value.


* IRELAND: 1,700 Companies May Collapse This Year
-------------------------------------------------
Barry O'Halloran at The Irish Times reports that insolvency and
corporate restructuring specialist Kavanagh Fennell predicted on
Thursday about 1,700 companies could go out of business this year
if current trends in insolvencies continue.

Kavanagh Fennell has published figures showing that 740 companies
have gone out of business so far this year, with 155 of them
going to the wall in May alone, the Irish Times notes.

According to the Irish Times, a partner in the firm, Ken Fennell,
said the figures indicate that the high levels of insolvencies of
the last few years are set to continue in 2012.

"With a total of 740 insolvencies in the year to date it would
appear that the overall numbers for 2012 will be in the region of
1,700," the Irish Times quotes Mr. Fennell as saying.

In keeping with the trends of the last four years, builders were
the worst hit in May, accounting for one in four of all
insolvencies, the Irish Times notes.

Retailers accounted for one in five failures, the Irish Times
states.  Shops, pubs and hotels continue to be vulnerable, the
Irish Times says.



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K A Z A K H S T A N
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KAZTRANSGAS: S&P Raises Long-Term Corp. Credit Rating to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit ratings on Kazakh gas utility company KazTransGas (KTG)
and its 100% owned gas pipeline operator JSC Intergas Central
Asia (ICA) to 'BB+' from 'BB'. The outlook is stable.

The rating on the senior unsecured debt issued by Intergas
Finance B.V. was raised to 'BB+' from 'BB'.

"The upgrade reflects underlying improvements in KTG's group
stand-alone credit profile (SACP), which we raised to 'bb' from
'bb-' on the back of our expectations of sound cash flow
generation and moderate projected debt levels for the group," S&P
said.

"KTG's business risk profile, which we assess as 'fair', is
supported by the relatively stable and regulated nature of the
gas transportation business, ship-or-pay terms until 2015 under a
new contract with Russian energy major OAO Gazprom (BBB/Stable/A-
2), and the favorable location of the group's transit pipelines.
It is constrained by KTG's concentration on Gazprom, increasing
cash flow volatility stemming from the rising share of
unregulated gas sales in the group's revenue composition,
somewhat opaque retail gas tariff regulation in Kazakhstan,
project and execution risks attached to new large projects the
group plans to undertake, and potential competition from
alternative gas export pipelines transporting Central Asian gas,"
S&P said.

"We have revised our view of KTG's financial risk profile to
'significant' from 'aggressive'. The revision is based on our
view of KTG's moderate projected debt leverage, 'adequate'
liquidity with solid accumulated cash balances, favorable long-
term maturity profile, and solid cash flow ratios. This is
mitigated by KTG's ambitious planned investments in gas
transmission and distribution and foreign currency risk because
more than 90% of KTG's debt is denominated in U.S. dollars. In
addition, we note that the group's financial policies are largely
dictated by the parent, JSC NC KazMunayGas (KMG; BBB-/Stable/--;
Kazakhstan national scale 'kzAA'), and there is a risk that KTG's
financial standing could rapidly change as a result of any
unexpected actions taken by KMG, including, but not limited to
aggressive dividend payout and intragroup cash redistribution,"
S&P said.

"We equalize the ratings on ICA with those on KTG, reflecting the
overall creditworthiness of the KTG group. The consolidated
approach reflects the companies' close integration, KTG's 100%
ownership of ICA and other major subsidiaries, financial
guarantees on a major part of the group's debt issued by ICA and
KTG, large intragroup cash flows, and an absence of effective
subsidiary ring fencing," S&P said.

"We consider KTG to be a government-related entity (GRE), and in
accordance with our criteria for GREs, we assess the likelihood
of extraordinary government support to KTG to be 'moderately
high', based on KTG's 'important' role for and 'strong' link with
the Kazakhstan government," S&P said.

"The stable outlook reflects our view that the risks associated
with planned heavy capital expenditures, growing exposure to the
more volatile gas retail segment, and potential dividend pressure
from the parent, KMG, are balanced by moderate projected debt
levels in the medium term, adequate liquidity and maturity
profiles, and improved profitability," S&P said.

"We assume KTG will maintain both its adequate liquidity and debt
maturity profiles on a sustained basis, to lessen refinancing
risk on an ongoing basis. Specifically, we expect the group to
cover its 12-month funding needs with resources by 1.2x," S&P
said.

"Ratings upside is currently limited, in our view, but could stem
from a fundamental and sustainable improvement in the group's
financial credit metrics. Parent KMG's weaker SACP of 'b+' also
hinders ratings upside for KTG. To maintain the 'significant'
financial risk profile, we expect KTG's adjusted funds from
operations (FFO)-to-debt ratio to be more than 50% and Standard &
Poor's-adjusted debt-to-EBITDA ratio to be less than 1.5x on a
sustainable basis," S&P said.

"We think pressure on KTG's credit profile could result from a
more aggressive financial profile than we currently anticipate.
That would include weakened credit ratios due to any unexpected
financial underperformance, extensive reliance on short-term
funding, or KTG's starting new investment projects requiring
significant external borrowing and leading to leverage above our
expectations. The ratings could also come under pressure as a
result of any indications of negative interference from KMG,
including, but not limited to, inducement to pay excessive
dividends," S&P said.



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


EUROCREDIT CDO IV: S&P Lifts Rating on Class S Comb Notes to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Eurocredit CDO IV B.V.'s class A-1, A-2, B-1, B-2, Q Comb, and S
Comb notes. "At the same time, we affirmed our ratings on the
class C-1 and C-2 notes," S&P said.

"The rating actions follow our assessment of the transaction's
performance. We used data from the trustee report (dated April
23, 2012), performed our credit and cash flow analysis, and took
into account recent transaction developments. We applied our 2010
counterparty criteria and our cash flow criteria," S&P said.

"From our analysis, we have observed a fall in the notional
amount of the assets that we consider to be rated in the 'CCC'
category ('CCC+', 'CCC', and 'CCC-') since we last reviewed the
transaction. However, the defaulted assets (rated 'CC', 'C', 'SD'
[selective default], or 'D') in the collateral pool have
increased since our previous review, both in notional and
percentage terms. All par value tests continue to perform above
the required trigger, and are higher than at our previous review.
With less than 50% of the original class A-1 note principal
outstanding, the credit enhancement is higher than at our last
review. None of the deferrable notes are deferring interest. The
weighted-average spread earned on the collateral pool has also
improved," S&P said.

"We subjected the capital structure to our cash flow analysis,
based on the methodology and assumptions as outlined by 2009
corporate collateralized debt obligation (CDO) 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
assumptions on asset correlation to generate scenario default
rates (SDRs) at each rating level, which we then compared with
the respective BDRs," S&P said.

"Taking into account our credit and cash flow analyses, we
consider the credit enhancement available to the class A-1, A-2,
B-1, B-2, Q Comb, and S Comb notes in this transaction to be
commensurate with higher ratings than we previously assigned. We
have therefore raised our ratings on these notes," S&P said.

"We consider that the credit enhancement on the class C-1 and C-2
notes is commensurate with the current ratings. We have therefore
affirmed our ratings on these notes," S&P said.

"We have analyzed the 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.

Eurocredit CDO IV is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

           http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Eurocredit CDO IV B.V.
EUR355.5 Million Fixed- and Floating-Rate Notes

Ratings Raised

Class               Rating
           To                    From

A-1        AAA (sf)              AA (sf)
A-2        AA- (sf)              A+ (sf)
B-1        BBB+ (sf)             BBB- (sf)
B-2        BBB+ (sf)             BBB- (sf)
Q Comb     BB- (sf)              B+ (sf)
S Comb     BB (sf)               B+ (sf)

Ratings Affirmed

C-1        B+ (sf)
C-2        B+ (sf)



===========
P O L A N D
===========


BANK OCHRONY: Fitch Affirms 'BB' Viability Rating
-------------------------------------------------
Fitch Ratings has affirmed Bank Ochrony Srodowiska's (BOS) Long-
Term Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook.

The affirmation of BOS's ratings reflects a high probability of
support from the Polish sovereign ('A-'/Stable) in case of need.
This reflects the state's indirect majority shareholding in the
bank, BOS's important role in financing the country's environment
protection projects and potential reputational damage for the
state should the bank default.  The IDRs also take into
consideration the reduction of the government's stake in BOS once
the bank's secondary public offering is completed by mid-July
2012, and the bank's small size.

The National Fund for Environmental Protection and Water
Management's (NFEP&WM, controlled by the state) stake will fall
to 57% (from 79% at end -2011) following the SPO but will remain
the bank's majority shareholder.  Fitch believes that NFEP&WM
considers BOS as its strategic investment and will not reduce its
stake in the bank without the approval of the Ministry for the
Environment.

BOS's IDRs could come under downward pressure if NFEP&WM's
shareholding falls below a controlling stake although Fitch
currently views this as a remote prospect, or if timely support
is not made available to the bank, in case of need.  Negative
action on Poland's ratings could also lead to similar action on
BOS, although this is not expected at present, given the Stable
Outlook on the sovereign.  However, a sovereign upgrade would not
necessarily lead to positive action on the bank.

The 'bb' Viability Rating reflects BOS's reasonable asset
quality, diversified funding base, adequate capitalization and
sufficient liquidity buffer.  This is counterbalanced by weak
profitability, risks embedded in the bank's foreign-currency
mortgage book, the moderate share of retail savings in the total
customer deposit base, and the bank's rather limited franchise
and scale.

The SPO -- amounting to PLN227.5 million -- will strengthen BOS's
Fitch core capital ratio to around 12.4% (from 10.9% at end-
Q112).  This is despite a move by the Polish Financial Services
Authority to increase risk weightings for foreign currency retail
loans from 1 July 2012.

The bank's already weak profitability is likely to suffer from a
slowdown of the Polish economy, which will put pressure on asset
quality, and from growing funding costs given the bank's retail
deposit-raising efforts.  BOS plans to defend its margins through
a gradual diversification of lending towards higher-yield
products which in Fitch's view could bring about higher loan
impairment charges.

BOS is a small universal bank in Poland with a 1.2% market share
by assets.  It focuses on financing environmentally friendly
projects, which accounted for 18% of its total loan book at end-
2011.  The bank has been listed on the Warsaw Stock Exchange
since 1997.

The rating actions are as follows:

  -- Long-Term Foreign Currency IDR: affirmed at 'BBB'; Outlook
     Stable
  -- Short-Term Foreign Currency IDR: affirmed at 'F3'
  -- Viability Rating: affirmed at 'bb'
  -- Support Rating: affirmed at '2'
  -- Support Rating Floor: affirmed at 'BBB'
  -- Senior unsecured debt: affirmed at 'BBB'


LOT POLISH: Turkish Airlines Backs Away From Takeover Plan
----------------------------------------------------------
Jan Cienski and Daniel Dombey at The Financial Times report that
Lot Polish Airlines is trying to find another potential buyer
after Turkish Airlines announced that it was backing away from
plans to buy the lossmaking carrier.

"I won't deny that we were upset," the FT quotes Marcin Pirog,
Lot chief executive, as saying.  "I have already talked to our
Turkish partners who explained that their main reason for halting
the negotiations was that after speaking to our lawyers they
understood that they would not have factual control over the
company."

Investors from outside the European Union cannot own a majority
stake in EU airlines, the FT notes.

The Polish Treasury, which owns 68% of Lot, is looking to
privatize the airline this year, the FT discloses.  A Polish
delegation was in China last week as Lot resumed flights to the
country, and there was hope that Air China would express interest
in buying a stake in the Polish carrier, the FT relates.  If no
industry buyer can be found, the government has talked of
floating the airline on the Warsaw Stock Exchange, the FT notes.

Other potential European partners like Lufthansa have not
expressed interest in buying Lot, and the airline is facing a
difficult future, the FT says.

Polskie Linie Lotnicze LOT S.A., trading as LOT Polish Airlines,
is the flag carrier of Poland.


PBG SA: Opts to File for Bankruptcy; In Talks with Creditors
------------------------------------------------------------
Piotr Bujnicki and Maciej Martewicz at Bloomberg News report that
PBG SA decided to file for bankruptcy to help reach an agreement
with creditors to cut debt by as much as 31%.

PBG in a regulatory filing on Monday that the company is
proposing to honor 69% of its debt to creditors owed more than
PLN1 million (US$282,700), 80% to those owned from PLN100,000 to
PLN1 million and 100% for those owned lesser sums.

The company, which specialized in oil and gas engineering,
ventured out of its core business to bid on arena and motorway
deals after Poland was selected to co-host the Euro 2012 soccer
championship, only to see its debt swell on falling margins,
Bloomberg discloses.  PBG said negotiations with banks remain at
an "impasse" that prevent the company from fulfilling its
contracts, Bloomberg notes.

PBG Chief Financial Officer Przemyslaw Szkudlarczyk said on
Monday that PBG's unconsolidated debt, which doesn't include the
borrowings of its unit, amounts to PLN1.5 billion, Bloomberg
relates.  According to Bloomberg, Kinga Banaszak-Filipiak, a
spokeswoman, said the entire group's debt at its 12 crediting
banks is at PLN1.7 billion.

The CFO, as cited by Bloomberg, said that PBG's four biggest bank
creditors are Bank Pekao SA, Bank Zachodni WBK SA, ING Bank
Slaski SA and Nordea Bank Polska SA, Bloomberg.

PBG said that holders of more than PLN1 million of PBG debt may
also be given the option of converting 12% of the debt into
company shares at a rate of PLN40 a share, to be executed one
year after a debt agreement is reached, Bloomberg notes.

Aprivia SA and Hydrobudowa Polska SA, both controlled by PBG,
also decided to file for bankruptcy aiming at an arrangement on
Monday, Bloomberg says. According to Bloomberg, PBG said in the
statement that Hydrobudowa will offer the same conditions to
creditors except for amounts over PLN1 million, where it is
offering to honor 44% of its debt.  Aprivia will release details
of its proposed debt reduction later, Bloomberg states.

PBG SA is Poland's third largest builder.


PBG SA: S&P Cuts Corp. Credit Rating to 'SD' on Standstill Deal
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Poland-based engineering and
construction company PBG S.A. to 'SD' from 'B+'. The rating was
removed from CreditWatch, where it had been placed with negative
implications on May 9, 2012.

"The downgrade follows PBG's recent announcement that it has
entered into a standstill agreement with its financing banks. The
standstill agreement is a first step in the company's planned
debt restructuring process. According to this agreement, we
understand that the banks will refrain from collecting
receivables on maturing short-term bilateral loans until the
agreement expires on July 19, 2012. We understand that under the
agreement the company has already extended maturities rather than
rolling them over, as we would have expected under normal
business conditions. We understand that no compensation payments
to the bank lenders have been made in lieu of this maturity
extension, although interest payments on all its debt are
continuing. The standstill agreement also suspends covenant
enforcement. The standstill agreement does not affect PBG's
domestic bonds due September 2012 and 2013," S&P said.

"In addition, PBG has not yet completed the planned new 12-month
bridge facility of Polish zloty (PLN) 200 million (EUR47 million)
to fund ongoing operations and the acquisition loan of a PLN350
million. This puts additional stress on its liquidity position,
which was already under increased pressure because of the
company's weakened operating performance," S&P said.

"We therefore see the standstill agreement as a de facto
distressed restructuring under our criteria," S&P said. The 'SD'
reflects:

  - The absence of compensation to lenders for extending the
    maturing loans;

  - S&P's view that the standstill has not come under normal
    business circumstances given the announced debt
    restructuring; and

  - The fact that not all of the company's the debt outstanding
    is affected.

"According to information we have received from the company, all
bilateral lenders have agreed to the standstill agreement and the
group continues to meet all interest payments. We will reassess
PBG's credit profile after the company emerges from the
standstill agreement," S&P said.



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


* PORTUGAL: To Inject EUR6.6-Bil. Capital Into Three Banks
----------------------------------------------------------
Peter Wise at The Irish Times reports that Portugal is to inject
state capital totaling EUR6.6 billion into three of the country's
largest lenders, making them among the "most capitalized banks in
Europe".

The announcement came as finance minister Vitor Gaspar said
Portugal had complied with all the conditions set by
international lenders during the first year of its EUR78 billion
bailout program, clearing the way for payment of the next EUR4.1
billion instalment of rescue funds, the Irish Times relates.

Mr. Gaspar said the funds to be injected in Banco Comercial
Portugues, Banco BPI and state-owned Caixa Geral de Depositos
would ensure they met the requirements for core tier-one capital
ratios, a key test of financial strength set by the European
Banking Authority, the Irish Times notes.

In return, the banks would support economic growth through
corporate lending, including a specific commitment by BCP and
BPI, both listed, to invest a minimum of EUR30 million each a
year in the capital of small and medium-sized companies, the
Irish Times says.  About EUR5 billion of the funds to be injected
into the banks will come from a EUR12 billion Bank Solvency
Support Facility created within Portugal's EUR78 billion bailout
package, the Irish Times discloses.

EBA stress-tests in December found Portuguese lenders needed to
raise just under EUR6.95 billion to attain the minimum 9%
requirement for core tier-one ratios by the end of this month,
the Irish Times recounts.

State capital is expected to be injected into the banks in the
form of so-called high-trigger contingent convertible bonds, or
"cocos", which convert into equity if a trigger such as a bank's
core capital ratio breaches a predefined floor, the Irish Times
states.



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


AHML OJSC: S&P Assesses Stand-Alone Credit Profile at 'bb+'
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its global-scale
issuer credit ratings on Russia-based Agency for Housing Mortgage
Lending OJSC (AHML) at 'BBB/A-3' and its national-scale rating at
'ruAAA'. The outlook is stable.

"Our ratings on state-owned AHML are supported by the agency's
'very important' role and 'very strong' links to the government,
its 'moderate' business position, 'very strong' capital and
earnings, 'adequate' risk position, 'above average' funding, and
'adequate' liquidity. They are constrained by high risk
concentrations in the residential real estate sector; high
political risk, which may complicate its medium-term strategy;
and moderate earning capacity, which stems from the agency's
mandate as a development institution," S&P said.

"In accordance with our criteria for government-related entities,
our view of a 'very high' likelihood of extraordinary government
support is based on our assessment of AHML's," S&P said:

    "Very important" role as Russia's sole state developer of
    mortgage market infrastructure, which the government views as
    an essential policy tool to improve currently poor housing
    affordability. AHML drafts legal principles for mortgage
    regulation; designs and tests specialized mortgage products;
    and develops the secondary mortgage market, including the
    market in residential mortgage-backed securities.

    "Very strong" link with Russia due to the state's 100%
    ownership and strong oversight of the company's strategy, as
    well as the country's high reputational risk, were the
    company to default -- most of AHML's debt is secured by state
    guarantees, although these are conditional .

"Based on the Russian government's recent track record, we
consider it highly likely to provide timely credit support to
AHML in most circumstances. During the financial market turmoil
of 2008-2009, the Russian government increased AHML's total
adjusted capital (TAC) almost tenfold. We expect the government
will remain committed to providing extraordinary support to AHML,
if needed. For example, we expect it to provide capital
injections and purchase AHML's bonds," S&P said.

"As a result, AHML's credit rating is two notches higher than its
SACP, which we currently assess as 'bb+'. We apply our banking
criteria to assess AHML's stand-alone credit profile (SACP),
reflecting the agency's status as a quasi-bank for development
and the nature of its financial profile, which is very similar to
that of a bank," S&P said.

"Under our bank criteria, we use our Banking Industry Country
Risk Assessment's economic and industry risk scores to determine
the 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'. We consider Russia to have moderate growth
prospects, credit expansion, and debt levels. Credit risk in the
economy is very high, due to the 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. 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.

"We consider AHML's business position to be 'moderate,'
reflecting its weak business diversity and the strong focus on
the immature residential real estate market that is a part of the
agency's mandate. At end-2011, about 60% of AHML's balance sheet
exposure comprised residential mortgages, fully concentrated in
Russia," S&P said.

"Our 'very strong' assessment of capital and earnings is viewed
as a positive rating factor for the assessment of the agency's
stand-alone creditworthiness, especially for a financial
institution with a 'bb' anchor. Our main quantitative capital
adequacy metric--the risk-adjusted capital (RAC) ratio before
adjustments for concentration and diversification--reached a
comfortable 47.3% at year-end 2011 and we expect this ratio to
remain well above 15% over the next 18-24 months. However, only
moderate earnings-generating capacity tempers this strength. We
assess AHML's risk position as 'adequate,' based on the improving
asset quality and granular lending portfolio diversification.
Over 2011, the share of reported nonperforming loans (NPLs,
defined as those overdue by more than 90 days) continued to fall,
reaching 6.8% on Jan. 1, 2012, from 8.7% a year earlier. We
expect this ratio to decrease gradually in 2012-2014; it will
benefit from the improving operating environment and tightened
risk appetite. In our opinion, the residential real estate market
is not overheating in Russia," S&P said.

"We consider AHML's funding to be 'above average,' reflecting
partial guarantees on its wholesale obligations and better access
to longer-than-average-term nature funding sources. The principal
source of financing for AHML's activities is funding from the
issuance of wholesale debt, which accounted for about 73% of the
agency's liabilities on Jan. 1, 2012," S&P said.

"All corporate bonds are partially guaranteed (principal only) by
the Russian federal government. Besides that, state-owned VEB
(BBB/Stable/A-3) is the main investor in the agency's open-market
debt. We count this as a form of ongoing state support. Another
23% of AHML's liabilities is attributed to a 10-year loan from
VEB. The agency will benefit from the option to use additional
state guarantees on its wholesale debt in the amount of Russian
rubles (RUB) 44 billion (about US$1.4 billion) during 2012-2014.
However, we understand that the share of guaranteed-agency
liabilities will gradually decrease to about 50% of AHML's long-
term liabilities by 2014, triggering refinancing and interest
rate risks. Under these conditions, we expect that the margin
between receipts and repayment will narrow in the medium term,
owing to a potential downward trend in cumulative prepayment
rates," S&P said.

"We consider AHML's liquidity to be 'adequate.' AHML's debt
repayment profile is smooth, and debt service is well below
expected receipts from the amortization of mortgage loans at
least until 2014. Throughout 2012-2013, we expect the agency's
cash and cash equivalents to comfortably exceed its debt
redemption falling due within next 12 months, which AHML
estimates will peak at RUB12 billion (about US$400 million) in
2013 before subsiding to RUB8.5 billion in 2014. As of March 31,
2012, AHML's estimated cash in the form of deposits in Russian
state-owned banks (on a consolidated basis) accounted for about
RUB30 billion," S&P said.

"The stable outlook reflects our view that over the next two
years, AHML's cautious risk management and access to support from
the state and its financial institutions will help it offset an
expected gradual erosion of capitalization. Its earnings margin
could also fall, partly because it could be relying less on
state-guaranteed liabilities," S&P said.

"Although we do not currently expect to raise the ratings, we
would consider doing so if the ratings on the Russian Federation
were raised while the agency's SACP and the likelihood of
extraordinary support from the government remained intact," S&P
said.

"If we lower the ratings on the Russian Federation, we will
likely lower the ratings on AHML. Moreover, the ratings on AHML
could come under pressure over the next two years, even if we
affirm or raise the ratings on the Russian Federation, should one
of these events occur," S&P said:

  -- The federal government reduces the agency's role in
     implementing its policy and loosens control over the
     agency's operations, for example through an unexpected
     privatization; or

  -- AHML's risk position deteriorates to "weak" as a result of
     unexpected rapid loss accumulation.

"We could also consider a negative rating action if the agency's
projected RAC ratio were to fall below 10%. That said, we
currently consider these scenarios to be very unlikely," S&P
said.


COMMERCIAL BANK: S&P Affirms 'B' Counterparty Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Russia-
based consumer finance specialist Commercial Bank Renaissance
Capital (RenCredit) to positive from stable.

"At the same time, we affirmed the long-term counterparty credit
rating at 'B', and raised the short-term rating to 'B' from 'C'
and the Russia national scale rating to 'ruA-' from 'ruBBB+'.

"The outlook revision to positive from stable and the one-notch
upgrade of both the short-term and Russia national scale ratings
reflect our view that RenCredit's funding position is improving
and approaching the industry average. RenCredit has drastically
reduced its reliance on wholesale funding in the past two years
by actively collecting deposits. Customer deposits represented
approximately 70% of the funding base at year-end 2011 versus
only 20% two years earlier. During the first quarter of 2012,
RenCredit further increased customer deposits by almost 25%,
which in our view indicates that this improvement of the bank's
funding profile should continue in 2012. We view positively this
rebalancing of the funding mix because wholesale funds are
generally more expensive and scarcer than customer deposits,
especially in times of stress," S&P said.

"RenCredit's ability to collect deposits so rapidly is
attributable, in our opinion, to its commercial dynamism and the
highly opportunistic behavior of some Russian depositors. We
still see RenCredit's deposits as potentially more sensitive than
the average to changes in remuneration rates and as therefore
less stable than those of retail competitors with longer a
deposit history. Thus, RenCredit still has to demonstrate, in our
view, its capacity to retain deposits over time, with an
appropriate balance between costs and volumes. We expect the
loan-to-deposit ratio to be below 150% at year-end 2012 and to
converge rapidly toward the industry average. As a result, we
recognize the potential for our funding score for RenCredit to
move to 'average' from 'below average' currently, if the trends
we observe persist," S&P said.

"The positive outlook on RenCredit reflects our view that its
funding position is gradually improving and is getting closer to
the industry average," S&P said.

S&P said it could raise the long-term rating by one notch,
depending on RenCredit's capacity:

  - To build a track record demonstrating that its deposit base
    is as stable as that of other Russian banks; and

  - To further reduce its wholesale needs below current levels,
    thus lowering its loan-to-deposit ratio well below the level
    of close to 150% exhibited at year-end 2011.

"Meanwhile, we expect the bank to stay focused on its consumer
lending activities in Russia, to maintain an adequate capital
level, and to closely manage its credit risk," S&P said.

"We would consider a negative rating action if our expectations
for funding do not materialize. We will also closely monitor any
execution risk related to RenCredit's accelerated business
expansion in terms of funding volatility and asset quality
deterioration. Although unexpected at this stage, aggressive
capital or liquidity management, or worsening macroeconomic
conditions in Russia could weigh on our opinion of RenCredit's
creditworthiness," S&P said.



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


* SPAIN: Must Seek EU Funds to Rescue Failed Lenders, Botin Says
----------------------------------------------------------------
Charles Penty at Bloomberg News reports that Banco Santander SA
Chairman Emilio Botin said Spain should seek European money to
rescue its failed lenders, joining a growing number of bankers
who question whether the government can manage the task on its
own.

Mr. Botin, the 77-year-old head of Spain's biggest bank, said
EUR40 billion (US$50 billion) in European Union funds for
nationalized banks, including the Bankia group, would be enough
to resolve the industry's crisis, Bloomberg notes.

Spain moved to center stage in Europe's debt crisis after last
month's nationalization of the Bankia group, Bloomberg relates.
The Madrid-based lender's request for EUR19 billion to mend its
balance sheet underlined banks' mounting losses and the strains
on the state's ability to absorb them, Bloomberg notes.

According to Bloomberg, Steen Jakobsen, chief economist at Saxo
Bank A/S, said it's unrealistic for Spain to accept aid for the
banks without also seeking a rescue to cover the financing needs
of the government and its regions.

Prime Minister Mariano Rajoy has repeatedly said Spain won't need
a rescue for the nation or its banks, even as he argued the
region's permanent bailout fund should be able to recapitalize
lenders directly, sidestepping governments, Bloomberg relates.

According to Bloomberg, Chancellor Angela Merkel's spokesman said
on Monday it's up to Spain to decide whether to seek aid and
accept the conditions linked to it, giving no ground to
Mr. Rajoy's pleas to Germany to explore new alternatives for
resolving the debt crisis.

Mr. Ureta, as cited by Bloomberg, said that more Spanish banks
are in favor of seeking European funds for ailing lenders because
neither the banking system nor the government can afford to
absorb the losses.



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


B3 INDUSTRIES: Manchester Cables and FTTX in Administration
-----------------------------------------------------------
Men Media Business reports that B3 Industries' subsidiaries
Manchester Cables and FTTX was put into administration
potentially jeopardizing 100 jobs.

Buyers are being sought for Manchester Cables and FTTX, which are
based in Blackley, according to Men Media Business.  The report
relates that Men Media Business FTTX also has a distribution site
in Sweden. The businesses are continuing to trade on a limited
basis and there have been no redundancies so far.

Men Media Business notes that B3 went into administration.  The
report says that another subsidiary, Blue Helix, based in
Crawley, West Sussex, was acquired by its management team.

The other UK business in the B3 group is Tri-wire, Men Media
Business says.  It is based in Normanton, West Yorkshire, but is
not affected by the administration and continues to trade as
normal, the report relays.

A further subsidiary, B3 Solutions Spain, which operates from
Santander, has entered into a voluntary pre-insolvency process,
Men Media Business notes.

The report says that Colin Haig, Paul Flint, and Allan Graham of
KPMG have been appointed joint administrators to B3 Industries,
Manchester Cables and FTTX.

Mr. Flint said they are liaising with customers, suppliers and
staff as they explore options, Men Media Business adds.


EMERGENCY SERVICES: Wound Up After Insolvency Service Probe
-----------------------------------------------------------
Three connected companies claiming to sell business-to-business
advertising in safety and emergency services booklets and in an
online directory have been wound-up by the High Court in
Manchester following investigations by Company Investigations of
the Insolvency Service.

The investigation found, Espress Limited, Emergency Services
Press Limited and Sponsored Press Limited all operated what is
known as "Support publishing" from bases in the North West.

These companies made unsolicited phone calls to businesses
purporting to sell advertising space in safety and emergency
services booklets or an online directory.

However, investigators found no evidence that booklets were ever
produced or that the website was operated as described.
Investigators also found that the three companies appeared to be
under common control and traded between September 2009 and August
2011, receiving over GBP950,000 between them.

The Court heard the directors failed to co-operate with the
investigation and there were no trading records, with the result
that around GBP650,000 taken from the companies' bank accounts in
cash remained unaccounted for.

Representatives of the companies made misleading claims to the
public. In one case, salespeople told prospective clients that
the companies had links to the emergency services which was not
true. This was aggravated by instances of the cold-caller
claiming to be from the police and, in one instance, the caller
claimed that a donation would be made to "Help for Heroes", which
was not the case.

Alex Deane, an investigation supervisor, from Company
Investigations in Manchester said:

"These companies dishonestly promoted themselves as acting on
behalf of our emergency services and exploited the goodwill of
small businesses. They sold advertising space which, if it
existed at all, could not benefit the clients in any way.

"People responsible for such companies should be aware that the
Insolvency Service will pursue these companies, take steps to
close them down and pursue further action against them wherever
possible."

The petition to wind up Emergency Services Press Limited in the
public interest was presented to the High Court under s124A of
the Insolvency Act 1986 on Feb. 7, 2012, and the company was
wound up on May 29, 2012.

Emergency Services Press Limited was incorporated on May 14,
2010. The registered office was at 82 Great Eastern Street,
London, EC2A 3JF.


ESPRESS LIMITED: Closed Down After Insolvency Service Probe
-----------------------------------------------------------
Three connected companies claiming to sell business-to-business
advertising in safety and emergency services booklets and in an
online directory have been wound-up by the High Court in
Manchester following investigations by Company Investigations of
the Insolvency Service.

The investigation found, Espress Limited, Emergency Services
Press Limited and Sponsored Press Limited all operated what is
known as "Support publishing" from bases in the North West.

These companies made unsolicited phone calls to businesses
purporting to sell advertising space in safety and emergency
services booklets or an online directory.

However, investigators found no evidence that booklets were ever
produced or that the website was operated as described.
Investigators also found that the three companies appeared to be
under common control and traded between September 2009 and August
2011, receiving over GBP950,000 between them.

The Court heard the directors failed to co-operate with the
investigation and there were no trading records, with the result
that around GBP650,000 taken from the companies' bank accounts in
cash remained unaccounted for.

Representatives of the companies made misleading claims to the
public. In one case, salespeople told prospective clients that
the companies had links to the emergency services which was not
true. This was aggravated by instances of the cold-caller
claiming to be from the police and, in one instance, the caller
claimed that a donation would be made to "Help for Heroes", which
was not the case.

Alex Deane, an investigation supervisor, from Company
Investigations in Manchester said: "These companies dishonestly
promoted themselves as acting on behalf of our emergency services
and exploited the goodwill of small businesses. They sold
advertising space which, if it existed at all, could not benefit
the clients in any way.

"People responsible for such companies should be aware that the
Insolvency Service will pursue these companies, take steps to
close them down and pursue further action against them wherever
possible."

The petition to wind up Espress Limited in the public interest
was presented to the High Court under s124A of the Insolvency Act
1986 on Feb. 7, 2012, and the company was wound up on May 29,
2012.

Espress Limited was incorporated on Oct. 13, 2010. The registered
office was at 1 Liverpool Street, London, EC2M 7QD.


EUROHOME UK 2007-1: S&P Lowers Rating on Class B1 Notes to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on the notes issued by Eurohome UK Mortgages 2007-1 PLC
and Eurohome UK Mortgages 2007-2 PLC.

"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received
(end of April 2012). Our analysis reflects our December 2011 U.K.
residential mortgage-backed securities (RMBS) criteria and our
2010 counterparty criteria, taking into account our current
ratings on the transaction counterparties. The main
counterparties in these transactions are Deutsche Bank AG
(A+/Negative/A-1) and Barclays Bank PLC (A+/Stable/A-1), acting
as the liquidity facility provider and basis swap provider," S&P
said.

Cumulative losses in these transactions are high, at 3.33% for
series 2007-1 and 4.87% for series 2007-2, and they keep
increasing. While series 2007-1 has 90+ day delinquencies in line
with observed levels in comparable transactions, series 2007-2
shows a worse performance.

"Series 2007-1 benefits from a fully funded reserve fund with an
annualized excess spread of 1.1%, and series 2007-2's reserve
fund is likely to be topped up at the next payment date. Any
excess spread generated will be used as the first layer of
protection against future losses arising in the portfolio," S&P
said.

"Due to the cumulative loss triggers being breached, the
transactions do not meet the pro rata repayment conditions set
out in the transaction documents, so they are paying sequentially
for the remainder of each transaction, and we have modeled them
as such in our analysis," S&P said.

"The liquidity facility documents are not compliant with our 2010
counterparty criteria. Therefore, in our cash flow model for both
transactions, we have not considered the benefit of the liquidity
facility for notes rated above the long-term issuer credit rating
on the liquidity facility provider, Deutsche Bank (A+). In series
2007-2, the class A1 notes are able to withstand 'AAA' stresses
even without the liquidity facility in place, while the class A2
notes would not pass rating levels higher than 'A+' when modeling
with the liquidity facility," S&P said.

                    EUROHOME UK MORTGAGES 2007-1

"The notes are paying down very slowly, which has resulted in
only a slight increase in credit enhancement levels since our
last review. This increase has not been able to offset the rising
cumulative losses in the portfolio that keep increasing alongside
the level of 90+ day delinquencies. These factors have led to the
mezzanine and junior tranches not being able to withstand the
stresses applied at their current rating levels. As a result, we
have lowered our ratings on the class M1 to B1 notes," S&P said.

The rating on the class A notes is capped at the level of the
rating on Deutsche Bank (A+), as these notes would not pass at a
higher rating level without the liquidity facility in place.

"We have affirmed our 'B- (sf)' rating on the class B2 notes
because of the very small amount of credit enhancement available
for the tranche," S&P said.

"The class C notes benefit from the 1.1% of excess spread and the
non-amortizing reserve fund. As the notes are paying down and are
current in payments of both interest and principal, we have
raised our rating on this class to 'B- (sf)'," S&P said.

                  EUROHOME UK MORTGAGES 2007-2

"Although the underlying portfolio is of a worse quality than the
one securitized in the 2007-1 series, the structure has higher
credit enhancement levels to support the class A1 notes--which,
in fact, can withstand 'AAA' stresses even when the liquidity
facility is not modeled," S&P said.

"The class A3 to B1 notes do not pass the stresses applied at
their current ratings, and hence we have lowered our ratings on
these classes. As in series 2007-1, we have affirmed our 'B-
(sf)' rating on the class B2 notes because of the very small
amount of credit enhancement available for the tranche," S&P
said.

"The class C notes' principal is repaid through excess spread,
and it is currently paying interest; but it is not paying down
principal, as the reserve fund is below the target amount. We
expect the reserve fund to build up to its required amount at the
next payment date, and we therefore expect the class C notes to
start redeeming from the September 2012 interest payment date
onward, if the performance does not deteriorate meaningfully. We
have therefore raised our rating on this class to 'B- (sf)'," S&P
said.

"The downgrades of the mezzanine and junior tranches in both
transactions reflect the upward trend of the level of cumulative
losses, and the high levels of 90+ day delinquencies," S&P said.

                       CREDIT STABILITY

"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years, under moderate
stress conditions, is in line with our credit stability
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 Reports
included in this credit rating report are available at:

           http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                Rating
           To                      From

Eurohome UK Mortgages 2007-1 PLC
GBP354.725 Million Mortgage-Backed Floating-Rate Notes Plus an
Overissuance of Excess-Spread-Backed Floating-Rate Notes

Rating Affirmed and Removed From CreditWatch Negative

A          A+ (sf)                  A+ (sf)/Watch Neg

Ratings Lowered and Removed From CreditWatch Negative

M1         BBB+ (sf)                A- (sf)/Watch Neg
M2         BB (sf)                  BBB- (sf)/Watch Neg
B1         B (sf)                   BB- (sf)/Watch Neg

Rating Affirmed

B2         B- (sf)                  B- (sf)

Rating Raised

C          B- (sf)                  CCC (sf)

Eurohome UK Mortgages 2007-2 PLC
EUR70 Million, GBP460.5 Million Mortgage-Backed and
Excess-Spread-Backed Floating-Rate Notes

Ratings Affirmed and Removed From CreditWatch Negative

A1(A)      AAA (sf)                 AAA (sf)/Watch Neg
A1(B)      AAA (sf)                 AAA (sf)/Watch Neg
A2         A+ (sf)                  A+ (sf)/Watch Neg

Ratings Lowered and Removed From CreditWatch Negative

A3         BBB+ (sf)                 A+ (sf)/Watch Neg
M1         BBB (sf)                  BBB+ (sf)/Watch Neg
M2         BB (sf)                   BB+ (sf)/Watch Neg
B1         B (sf)                    B+ (sf)/Watch Neg

Rating Affirmed

B2         B- (sf)                   B- (sf)

Rating Raised

C          B-   (sf)                 D (sf)


LUMINAR GROUP: Lenders to Face "Significant" Losses on Debts
------------------------------------------------------------
Nathalie Thomas at The Telegraph reports that Lloyds Banking
Group and fellow lenders to Luminar, which  collapsed last year,
have been warned to expect "significant" losses on GBP112 million
of outstanding debts.

A trio of lenders, which also included Royal Bank of Scotland and
Barclays, pulled the plug on the country's biggest nightclub
operator in October after it racked up losses of almost GBP200
million and trading was hit by a surge in youth unemployment, the
Telegraph recounts.

According to the Telegraph, administrators at Ernst & Young are
yet to settle payments to Luminar's lenders and "non-
preferential" creditors, believed to include suppliers.  In a
report filed at Companies House, joint administrator Alan Hudson
said the three banks were owed GBP112.4 million between them, the
Telegraph notes.

At the time of its collapse, Luminar was estimated to have total
debts of GBP140 million, including GBP80 million of bank lending,
the Telegraph states.

"It is still estimated that secured creditors [the banks] will
experience a significant shortfall following distribution of the
net fixed and floating charge realizations from the
administration," the Telegraph quotes Mr. Hudson as saying in the
report.  The administrators are currently in pursuit of GBP1.1
million that is owed by promoters or sub-tenants of Luminar,
which owned brands including Oceana, Lava & Ignite and Liquid.

"We are working with our lawyers to pursue these debts and will
update creditors further in future reports," Mr. Hudson, as cited
by the Telegraph, said.

Administrators have received claims of almost GBP1 million from
non-preferential creditors who are latest in the pecking order
for recoveries after a company's collapse, the Telegraph
discloses.

According to the Telegraph, sources said it is likely the banks
will already have made provisions for losses incurred on Luminar.

Luminar's three lenders decided not to renew the company's debt
facilities in October after several years of decline, the
Telegraph notes.

                       About Luminar Group

Based in Milton Keynes, United Kingdom, Luminar Group Holdings
plc -- http://www.luminar.co.uk/-- is engaged in the ownership,
development and operation of nightclubs and themed bars.  Its
main branded venues are Oceana, Liquid, and Lava & Ignite.  The
Company's product brands include Big Night Out, Vibe, Red Carpet
Moments and UK Club Culture (UKCC).  Oceana has five bars, two
clubs, and one amazing night.


NEWGATE FUNDING: S&P Cuts Ratings on Five Note Classes to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Newgate Funding PLC's series 2006-1, 2006-2, and 2006-
3.

Specifically, S&P has:

- In all three transactions, lowered and removed from
   CreditWatch negative its ratings on all classes of notes,
   except the class T and Q notes;

- In series 2006-2, raised and removed from CreditWatch negative
   its rating on the class T notes; and

- In series 2006-2 and 2006-3, affirmed and removed from
   CreditWatch negative our ratings on the class Q notes.

"The rating actions follow the application of our December 2011
U.K. residential mortgage-backed securities (RMBS) criteria and
our 2010 counterparty criteria," S&P said.

                          Performance

"In our opinion, the collateral pools for all three transactions
have exhibited relatively stable performance in recent periods.
Delinquencies have declined since the highs of 2009; 90+ day
arrears have fallen to current levels of 27.04%, 27.74%, and
27.42%% in series 2006-1, 2006-2, and 2006-3. Similarly,
cumulative losses are 1.78%, 2.22%, and 2.91%," S&P said.

"Amortization of all three collateral pools has been limited, due
to the high percentage of interest-only loans (more than 70% in
each pool) and low prepayment rates. This has led to the limited
buildup of credit enhancement in all transactions, which is
particularly negative for the junior classes of notes, as all
transactions are currently amortizing sequentially," S&P said.

"All three transactions are currently paying sequentially and
have a 90+ day delinquency pro rata trigger of 20%. Given the
proximity of the current 90+ day delinquency levels to this
trigger for all three transactions, we have considered the
possibility of each transaction paying pro rata at some point in
the future, based on historical arrears movements, and factored
this into our cash flow analysis," S&P said.

"The application of our 2011 U.K. RMBS criteria has resulted in a
higher weighted-average foreclosure frequency and a higher
weighted-average loss severity for each of the three
transactions. This has led to overall increases in the level of
credit coverage required at each rating level for each
transaction," S&P said.

"The increased credit enhancement levels for series 2006-1's
class Ca, Cb, D, and E notes, series 2006-2's class Ba, Bb, Ca,
Cb, Da, Db, and E notes, and series 2006-3's class Ba, Bb, Ca,
Cb, Da, Db, and E notes have not been sufficient to mitigate the
increases in required credit coverage. Consequently, upon
application of our updated cash flow stresses, these notes were
unable to achieve ratings commensurate with their previous
respective rating levels. We have therefore lowered and removed
from CreditWatch negative our ratings on these classes of notes,"
S&P said.

"We have also raised and removed from CreditWatch negative our
rating on series 2006-2's class T excess spread notes.
Considering recent excess spread trends in this transaction, we
expect this class of notes (which has a current outstanding
balance of GBP0.3 million) to pay down in the short term," S&P
said.

"We have affirmed and removed from CreditWatch negative our
rating on the class Q notes in series 2006-2 and 2006-3. The
class Q notes are excess spread deferrable notes, which we rate
to ultimate interest and principal repayment," S&P said.

                           Counterparty

"For these transactions, the documented required short-term
rating for a bank account provider--currently Barclays Bank PLC
(A+/Stable/A-1)--is 'A-1+'. Our Nov. 29, 2011 downgrade of
Barclays Bank has resulted in a breach of these rating triggers.
As no remedy action has been implemented, and given a replacement
framework no longer exists, the highest potential rating on the
notes is capped at our long-term issuer credit rating on the
account bank--currently 'A+'," S&P said.

"Newgate Funding's series 2006-1, 2006-2, and 2006-3 are U.K.
nonconforming RMBS transactions, with collateral comprising
first-ranking mortgages over freehold and leasehold owner-
occupied properties originated by Mortgages 1 Ltd.," S&P said.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

           http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                 Rating
            To                    From

Newgate Funding PLC (Series 2006-1)
EUR117.5 Million and GBP503.95 Million Mortgage-Backed Floating-
Rate Notes Series 2006-1

Ratings Lowered and Removed From CreditWatch Negative

A4          A+ (sf)               AA- (sf)/Watch Neg
Ma          A+ (sf)               AA- (sf)/Watch Neg
Mb          A+ (sf)               AA- (sf)/Watch Neg
Ba          A+ (sf)               AA- (sf)/Watch Neg
Bb          A+ (sf)               AA- (sf)/Watch Neg
Ca          A (sf)                A+ (sf)/Watch Neg
Cb          A (sf)                A+ (sf)/Watch Neg
D           B (sf)                BBB- (sf)/Watch Neg
E           B- (sf)               B+ (sf)/Watch Neg

Newgate Funding PLC (Series 2006-2)
EUR73.9 Million and GBP458.7 Million Mortgage-Backed Floating-
Rate Notes Series 2006-2

Ratings Lowered and Removed From CreditWatch Negative

A3a         A+ (sf)               AA- (sf)/Watch Neg
A3b         A+ (sf)               AA- (sf)/Watch Neg
M           A+ (sf)               AA- (sf)/Watch Neg
Ba          A- (sf)               AA- (sf)/Watch Neg
Bb          A- (sf)               AA- (sf)/Watch Neg
Ca          BB (sf)               BBB+ (sf)/Watch Neg
Cb          BB (sf)               BBB+ (sf)/Watch Neg
Da          B- (sf)               BB- (sf)/Watch Neg
Db          B- (sf)               BB- (sf)/Watch Neg
E           B- (sf)               B (sf)/Watch Neg

Rating Raised and Removed From CreditWatch Negative

T           BBB- (sf)             B- (sf)/Watch Neg

Rating Affirmed and Removed From CreditWatch Negative

Q           CCC (sf)              CCC (sf)/Watch Neg

Newgate Funding PLC (Series 2006-3)
EUR296.1 Million, GBP319.85 Million, and $271 Million Mortgage-
Backed Floating-Rate Notes Series 2006-3

Ratings Lowered and Removed From CreditWatch Negative

A2          A+ (sf)               A+ (sf)/Watch Neg
A3a         A+ (sf)               A+ (sf)/Watch Neg
A3b         A+ (sf)               A+ (sf)/Watch Neg
Mb          A+ (sf)               A+ (sf)/Watch Neg
Ba          BBB- (sf)             A+ (sf)/Watch Neg
Bb          BBB- (sf)             A+ (sf)/Watch Neg
Cb          B+ (sf)               BBB (sf)/Watch Neg
Da          B (sf)                BB- (sf)/Watch Neg
Db          B (sf)                BB- (sf)/Watch Neg
E           B- (sf)               B (sf)/Watch Neg

Rating Affirmed and Removed from CreditWatch Negative

Q           CCC (sf)              CCC (sf)/Watch Neg


OAK HILL II: S&P Affirms 'BB' Rating on Class E Deferrable Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Oak Hill European Credit Partners II PLC's class A-2, A-3, A-5, B
Def, C-1 Def, C-2 Def, D def, and R Combo notes. "At the same
time, we affirmed our ratings on the class VFN, A-4, and withdrew
our rating on the class Q Combo 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
1, 2012). We have taken into account recent transaction
developments and applied our 2010 counterparty criteria," S&P
said.

"Since our previous review of the transaction in April 2010, we
have observed a positive rating migration in the underlying
portfolio. Assets that are defaulted, and those that we rate in
the 'CCC' category, ('CCC+', 'CCC', or 'CCC-') have decreased to
0.8% from 4.3%, and to 1.5% from 10.5%," S&P said.

"At the same time, the level of credit enhancement available to
each class of notes has increased following an increase of the
aggregate collateral balance to EUR443.4 million from EUR432.5
million. None of the classes of notes has paid down, as the
transaction has not yet entered its amortization period, which is
scheduled to begin in August 2013. All of the transaction's
coverage tests are currently passing, except for the threshold
test, which only affects the reinvestment of certain proceeds,"
S&P said.

"Other positive factors in our analysis include a reduction of
the weighted-average life of the assets in the portfolio, and a
significant increase of their weighted-average spread to 3.57%
from 3.01%, following the continuous reinvestment of redemption
proceeds into assets that pay greater margins," 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 of notes. We used the portfolio balance that we
considered to be performing (i.e., rated 'CCC' or above), the
reported weighted-average spread, 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 stress scenarios," S&P said.

"Therefore, and in accordance with our analysis, we have raised
our ratings on the class A-2, A-3, A-5, B Def, C-1 Def, C-2 Def,
D def, and R Combo notes to levels that reflect the current
levels of credit enhancement, the portfolio credit quality, and
the transaction's performance," S&P said.

"We have also observed that the credit support available to the
class VFN, A-4, and E Def notes is commensurate with their
current ratings, and we have therefore affirmed our ratings on
these classes of notes," S&P said.

"Note that the class A-2, A-3, and A-5 notes are now rated as
high as class VFN and A-4 notes, although they are subordinated
to them in the priority of payments. At closing, all of these
notes were assigned a 'AAA (sf)' rating, and they are now rated
'AA+ (sf)'," S&P said.

"Approximately 19% of the assets in the transaction's portfolio
are non-euro-denominated. To mitigate the risk of foreign-
exchange-related losses, the issuer has entered into currency
options agreements throughout the life of the transaction. Under
our 2010 counterparty criteria, our analysis of the derivative
counterparties and their associated documentation indicates that,
absent other mitigants, they cannot support ratings on the notes
higher than 'AA- (sf)'. To assess the potential impact on our
ratings, we have assumed that the transaction does not benefit
from the foreign-exchange options. We concluded that, in this
scenario, the class VFN notes and the class A-2, A-3, A-4, and A-
5 notes would be able to achieve 'AA+ (sf)' ratings. Under our
2010 counterparty criteria, our ratings on the class B Def, C-1
Def, C-2 Def, D Def, E Def, and R Combo notes are supported by
our ratings on the derivative counterparties. Hence, we have
applied no additional foreign-exchange-related stresses to those
notes," 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.

"Oak Hill European Credit Partners II is a cash flow
collateralized loan obligation (CLO) transaction, backed
primarily by leveraged loans to speculative-grade corporate
firms. Geographically, the portfolio is mainly concentrated in
the U.S., Germany, France, the Netherlands, and the U.K., which
together account for about 75% of the portfolio. Oak Hill
European Credit Partners II closed in June 2007 and is managed by
Oak Hill Advisors (Europe), LLP," S&P said.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

           http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class               Rating
            To                  From

Oak Hill European Credit Partners II PLC
EUR459.9 Million, GBP14 Million Senior Secured and Deferrable
Floating-Rate and Subordinated Notes

Ratings Raised

A-2         AA+ (sf)            AA (sf)
A-3         AA+ (sf)            AA (sf)
A-5         AA+ (sf)            AA (sf)
B Def       AA- (sf)            A+ (sf)
C-1 Def     A (sf)              A- (sf)
C-2 Def     A (sf)              A- (sf)
D Def       BBB+ (sf)           BBB (sf)
R Combo     BBB+ (sf)           BBB- (sf)

Ratings Affirmed

VFN         AA+ (sf)
A-4         AA+ (sf)
E Def       BB (sf)

Rating Withdrawn

Q Combo     NR                  B (sf)

NR-Not rated.


RANGERS FC: Administrators Agree to Cap Fees Prior to Appointment
-----------------------------------------------------------------
Mark Daly at BBC Scotland reports that Rangers' administrators
Duff and Phelps agreed with owner Craig Whyte to cap their fees
at GBP500,000 two days before they were appointed.

E-mails obtained by BBC Scotland reveal the firm also agreed to
try to minimize the time spent in administration.

Duff and Phelps' fees and charges now stand at more than GBP5.5
million.

The firm said that the capped fee was envisaged for an outcome
which never materialized and that the BBC has got its figures
wrong.

Duff and Phelps were appointed as administrators for Rangers
after the club failed to pay tax to HMRC of up to GBP15 million,
BBC recounts.

They had been involved with Craig Whyte since before his takeover
of Rangers in May 2011, BBC notes.

Mr. Whyte states the capped fee should include all work by Duff
and Phelps in meeting requirements by the Scottish Football
Association to have accounts for the granting of a Uefa license
by March 31, according to BBC.

Mr. Clark, as cited by BBC, said that it was "completely
misleading and inaccurate" for the BBC "to suggest we gave a
guarantee of fee level and guarantee of time the administration
would last".

"The emails in question were preceded by a letter sent on
February 10, 2012 which made reference to a GBP500,000 fee in
relation to a specific possible outcome which did not
materialize," BBC quotes Mr. Clark as saying.

"The BBC has also got its figures wrong when stating our fees are
now more than 10 times this amount.

"As stated [Wed]nesday, all fees are subject to approval by
creditors and are in keeping with the best practice guidelines
from insolvency practitioners bodies."

                   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.


SPONSORED PRESS: Liquidated After Insolvency Service Probe
----------------------------------------------------------
Three connected companies claiming to sell business-to-business
advertising in safety and emergency services booklets and in an
online directory have been wound-up by the High Court in
Manchester following investigations by Company Investigations of
the Insolvency Service.

The investigation found, Espress Limited, Emergency Services
Press Limited and Sponsored Press Limited all operated what is
known as "Support publishing" from bases in the North West.

These companies made unsolicited phone calls to businesses
purporting to sell advertising space in safety and emergency
services booklets or an online directory.

However, investigators found no evidence that booklets were ever
produced or that the website was operated as described.
Investigators also found that the three companies appeared to be
under common control and traded between September 2009 and August
2011, receiving over GBP950,000 between them.

The Court heard the directors failed to co-operate with the
investigation and there were no trading records, with the result
that around GBP650,000 taken from the companies' bank accounts in
cash remained unaccounted for.

Representatives of the companies made misleading claims to the
public. In one case, salespeople told prospective clients that
the companies had links to the emergency services which was not
true. This was aggravated by instances of the cold-caller
claiming to be from the police and, in one instance, the caller
claimed that a donation would be made to "Help for Heroes", which
was not the case.

Alex Deane, an investigation supervisor, from Company
Investigations in Manchester said:

"These companies dishonestly promoted themselves as acting on
behalf of our emergency services and exploited the goodwill of
small businesses. They sold advertising space which, if it
existed at all, could not benefit the clients in any way.

"People responsible for such companies should be aware that the
Insolvency Service will pursue these companies, take steps to
close them down and pursue further action against them wherever
possible."

The petition to wind up Sponsored Press Limited in the public
interest was presented to the High Court under s124A of the
Insolvency Act 1986 on Feb. 7, 2012, and the company was wound up
on May 29, 2012.

Sponsored Press Limited was incorporated on Aug. 7, 2009. The
registered office was at 9 Bentinck Street, London W1U 2EL.


* UNITED KINGDOM: Numbers of Retailers in Administration Up 38%
---------------------------------------------------------------
Bdaily Business Network News reports that United Kingdom
retailers going into administration has jumped by 38% in the
first quarter as the UK slumped into a double dip recession.

In a survey by accounting firm Wilkins Kennedy, it was found that
670 firms went into administration, up from 486 at the end of
2011, according to Bdaily Business Network News.  The report
notes that retailers succumbing to the difficult conditions
included Peacocks, Game and Clinton Cards.

"Last year was bad but this year is even worse.  Retailers are
still struggling with rents that they feel are far above the
market rate and banks are particularly reluctant to extend credit
to struggling retail businesses," the report quoted Anthony Cork,
a partner at the firm as saying.

Bdaily Business Network notes that last week figures indicated
that UK retail sales fell at their fastest rate in more than two
years in April 2012, while GDP saw the UK fall even deeper into
recession than initially thought.

UK consumers are now being squeezed by prices rising faster than
wages and austerity measures, Bdaily Business Network relays.

Many individuals are also concerned about job security, a shaky
housing market and the eurozone debt fallout, the report says.


                            *********

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 * * *