TCREUR_Public/120705.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Thursday, July 5, 2012, Vol. 13, No. 133

                            Headlines



A U S T R I A

OGX AUSTRIA: Moody's Affirms 'B1' Rating; Outlook Negative


B O S N I A   &   H E R Z E G O V I N A

IZOLATER: Bosnian Court Launches Bankruptcy Proceedings


F R A N C E

DOUX SA: French Breeders Seek Government Aid to Stay Afloat


G E R M A N Y

DEUTSCHE PFANDBRIEFBANK: Moody's Reviews 'E+' BFSR for Downgrade
FRESENIUS SE: Moody's Maintains 'Ba1' CFR on Review for Downgrade
GWB IMMOBILIEN: Files for Insolvency Proceedings in Reinbek
KONARKA TECHNOLOGIES: Files for Bankruptcy in Nuremberg Court
POWERWIND GMBH: Restructuring Continues; Seeks Buyer

SOVELLO GMBH: Likely to Cut More Than 500 Jobs, Union Claims


G R E E C E

NATIONAL BANK OF GREECE: Auditors Raise Going Concern Doubt


H U N G A R Y

* HUNGARY: Major Banks Shut Down 94 Branches in First Half 2012


I R E L A N D

ALBURN: Auditors Cast Going Concern Doubt
IRISH LIFE: S&P Lifts Rating on EUR200MM Jr. Sub. Notes From 'BB'
MERCATOR CLO: S&P Raises Class B-2def Notes Rating to CCC+ (sf)


I T A L Y

BANCA DEI PASCHI: S&P Cuts Tier 1 Hybrid Securities Rating to 'C'
BANCA NETWORK: Italian Prosecutors Mulls Probe Into Collapse
BANCA POPOLARE: Moody's Withdraws 'Ba1' Sr. Unsecured Debt Rating


K A Z A K H S T A N

ASTANA FINANCE: Creditors Back US$1.9BB Debt Restructuring Plan


P O R T U G A L

BANCO SANTANDER: Moody's Reviews 'Ba1' Ratings for Downgrade


R U S S I A

SOVCOMFLOT AO: S&P Cuts Long-Term Corp. Credit Rating to 'BB+'


S L O V A K   R E P U B L I C

ALEX TOUR: Files for Bankruptcy Following Financial Problems


S L O V E N I A

SKUPINA VIATOR: Failed Capital Increase Prompts Receivership


S P A I N

FONCAIXA HIPOTECARIO: S&P Withdraws 'D' Rating on Class D Notes


S W E D E N

NIMBUS: DNB ASA Has Exposure in Bankruptcy


T U R K E Y

* TURKEY: Moody's Takes Rating Actions on 16 Turkish Banks


U N I T E D   K I N G D O M

CORNERSTONE TITAN: Moody's Cuts Rating on Class E Notes to 'Caa2'
DECO 6-UK: S&P Lowers Rating on Class D Notes to D(sf)
DECO 8: Fitch Downgrades Rating on Class F Notes to 'Csf'
POLLY PECK: "Was Not Insolvent," Asil Nadir Claims
PRINTEXPRESS IN WHITEHAVEN: Goes Into Liquidation

WRIGHT & SMITH: To Enter Into Liquidation on July 20


X X X X X X X X

* S&P Takes Action on 24 European Synthetic CDO Tranches
* Upcoming Meetings, Conferences and Seminars


                            *********


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A U S T R I A
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OGX AUSTRIA: Moody's Affirms 'B1' Rating; Outlook Negative
-----------------------------------------------------------
Moody's Investors Service affirmed the B1 ratings of OGX Petroleo
e Gas Participacoes S.A. (OGX) and OGX Austria GmbH and changed
the rating outlook to negative from stable.

"The negative rating outlook reflects lower than expected
performance from OGX's first two producing wells, negatively
impacting cash flows and capital productivity," commented
Gretchen French, Moody's Vice President. "OGX's latest setback
follows higher debt levels and moderate project delays and cost
increases incurred over the past year, which had already
diminished flexibility within the B1 rating."

Ratings Rationale

OGX recently announced the results of extended well tests on its
first two production wells in the Tubarao Azul field (formerly
known as the Waimea Accumulation). The production flow rate of
the two wells, OGX-26 and OGX-68, have been restricted to 5,000
barrels of oil equivalent per day (boe/d), which is materially
below management's original estimated range of 10,000 - 20,000
boe/d. The lower well performance highlights one of the many
risks of bringing contingent oil and gas resources onto
production. The main reason for the lower well productivity is a
weaker than expected water drive in the reservoir and significant
well interference between these first two wells. The
compartmentalized and unpredictable nature of the carbonate
reservoir could contribute to increased costs to fully develop
the field.

OGX's position as an owner of world class hydrocarbon resources
remains strong. However, the company's growth rates and returns
have been negatively affected by reduced production rates from
the initial wells, which will result in lower cash flow and debt
capacity for future projects. Furthermore, if OGX is not able to
successfully manage its funding needs, cash levels could
materially decline by the end of 2013, resulting in constrained
liquidity and potentially further reliance on debt funding.

A key consideration will be the results of the drilling of its
third producing well in the Tubarao Azul field. Field-wide
production is estimated to reach around 15,000 boe/d by year end
2012, far short of the previous expectations of nearly 40,000
boe/d. To address the expected cash flow shortfall, the company
is reducing its exploration capital spending in 2013 and 2014 by
about US$2.1 billion, which will entail reducing its drilling rig
commitments to three rigs from six currently and reducing seismic
spending. However, the expected reduction in the drilling rig
program will not be complete until the fourth quarter of 2013.

OGX's B1 rating could be downgraded if production levels decline,
liquidity becomes constrained or debt levels materially rise in
order to fund cash flow shortfalls. While unexpected over the
near-term given the negative outlook, the B1 rating could be
upgraded if OGX is successful in growing production (to over
20,000 barrels of oil equivalent per day) and has made
substantial progress on the construction of the two additional
FPSOs and wellhead platforms.

The principal methodology used in rating OGX was the Global
Independent Exploration and Production Industry Methodology
published in December 2011.

Based in Rio de Janeiro, Brazil, OGX is one of the largest
independent exploration and production companies in Latin
America.



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B O S N I A   &   H E R Z E G O V I N A
=======================================


IZOLATER: Bosnian Court Launches Bankruptcy Proceedings
-------------------------------------------------------
SeeNews reports that a Bosnian commercial district court launched
bankruptcy proceedings against Izolater.

According to SeeNews, the court in Trebinje said in a filing with
the Banja Luka Stock Exchange that it decided on June 27 to
institute bankruptcy proceedings as the company is unable to pay
369,900 marka (US$239,400/EUR189,100) of outstanding liabilities.

Izolater is a construction company based in Trebinje, in the Serb
Republic.



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F R A N C E
===========


DOUX SA: French Breeders Seek Government Aid to Stay Afloat
-----------------------------------------------------------
Reuters reports that French breeders who supply poultry group
Doux SA have asked the government to ensure they continue to
receive feed and gas supplies to stay in business until the
future of the company is resolved.

According to the news agency, unions said the farmers, who need
to keep feeding thousands of chickens and turkeys for Doux, fear
they may have trouble paying their bills as they await cash from
the company, which is struggling with a EUR340 million (US$423.5
million) debt pile.

Doux, 80% family-owned with the remainder held by French bank BNP
Paribas, has contracts with some 800 poultry breeders in addition
to the 3,400 staff it employs in France, Reuters discloses.

As reported by the Troubled Company Reporter-Europe on June 4,
2012, Reuters related that Doux collapsed into administration on
June 1 after failing to reach an agreement with bankers, putting
at risk more than 3,000 jobs.  The company was placed in
administration by a commercial court in Quimper, northwest
France, after saying earlier on June 1 that it had suspended
payments to creditors, Reuters disclosed.  The government, which
had offered a EUR35 million cash injection for the company,
blamed Mr. Doux for ending negotiations to save the firm, but
vowed to continue working to find solutions, Reuters noted.

France-based Doux S.A. produces, sells, and exports poultry and
poultry-based processed products for retail, food service and
catering, and food processing industries.



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


DEUTSCHE PFANDBRIEFBANK: Moody's Reviews 'E+' BFSR for Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade
Deutsche Pfandbriefbank's (pbb) standalone bank financial
strength rating (BFSR) of E+ (equivalent to a b1 standalone
credit assessment) and pbb's senior debt and deposit ratings of
A3. The review for downgrade reflects the pressure that the
current operating environment is exerting on pbb's franchise and
standalone credit strength as well as concerns regarding the very
high support uplift from the German government, pbb's sole owner.

As a result, pbb's B2 subordinated debt and Prime-1 short-term
ratings have also been placed on review for downgrade. Moody's
notes that pbb's senior debt and deposit ratings are likely to
remain investment grade. The ratings of pbb's sister company,
Depfa plc (Baa3 stable; E+/b2 stable), are not affected by this
announcement.

The review reflects Moody's concerns regarding the bank's
wholesale funded business model together with increased asset-
side vulnerabilities, also as result of a deteriorating operating
environment in Europe. The review will focus on pbb's ability (i)
to raise funding in the debt capital markets at conditions that
allow for a suitable margin; (ii) to bear potential losses in the
context of its exposures to euro area peripheral countries; (iii)
to write new business to replace the existing -- partly low
yielding -- asset base; and (iv) to adjust its business profile
to the changing regulatory and market environment, as a
precondition for the bank to be privatized by 2015.

At the same time Moody's will reassess its current very high
assumptions for support from the German government in the light
of the pending privatization and shifting policy towards support
in Europe.

Rating Rationale

Moody's acknowledges the progress pbb has made in stabilizing and
rebuilding its business following the asset transfer to FMS
Wertmanagement (Aaa stable) in October 2010. The bank has
remained profitable in the last seven quarters and has re-entered
the capital markets successfully, including issuing benchmark
covered bonds. Moreover, pbb's liquidity levels remain
satisfactory and its asset quality compares positively to its
peer group as a result of the previous asset transfer. Moody's
decision to place the bank's ratings on review for downgrade
reflects its concerns regarding the bank's business model in the
current operating environment.

Review of StandAlone Credit Assessment

The rating announcement reflects several factors that are
exerting downwards pressure on the long-term viability of pbb's
franchise.

Moody's believes that pbb is constrained in its ability to obtain
senior unsecured funds maturing beyond 2015, which is the date by
which the German government -- the bank's current sole owner --
must sell its majority stake according to the state aid ruling of
the European Commission (EC). pbb requires such funding to
refinance the unsecured portion of its core business in the
medium term.

Although pbb has a comfortable Tier 1 capital ratio of 15.9%,
Moody's cautions that pbb's leverage is high as its Tier 1
capital only accounts for EUR2.8 billion or 2.8% of the operating
balance sheet at the end of Q1 2012. In addition, pbb retains
sizeable exposures to sectors and regions, which expose it to
potentially material losses over the medium term, including
exposure to the euro periphery, including Spain (EUR5.1 billion)
and Italy (EUR4.2 billion). Moody's considers commercial real
estate to be an asset class that is particularly vulnerable to
impairments in the weakening European operating environment.

Finally, Moody's believes that the longer-term viability of pbb's
business model is under increasing pressure, given pbb's current
low core profitability, which partly reflects its low yielding
public-finance legacy portfolio. Challenges for the bank to build
up more profitable businesses (including commercial real estate)
have increased as market conditions and the operating environment
have deteriorated as a result of the euro area debt crisis.

Review of Support Assumptions

Moody's will also reassess its assumptions of support forthcoming
from the German government in the event of need. The current
assumptions are very high, resulting in seven notches of rating
uplift from pbb's current b1 standalone credit assessment. This
is more than the level of support assumed for pbb's peers,
reflecting the strong support that has been evolving since pbb's
parent Hypo Real Estate (HRE (unrated) first experienced distress
and needed financial assistance in late September 2008, and the
role the government has played in restoring pbb's capital and
liquidity position.

The German government's commitment to supporting the bank, of
which it is the sole shareholder, is credit positive for
creditors. However, there remain uncertainties regarding the
level of support creditors could expect over the rating horizon
that arise from the government's need and desire to privatize the
bank, and the challenges it will face in doing so given the weak
market outlook and pbb's size and profile. Moody's also notes
that the implementation of the bank resolution regime as part of
the German Bank Restructuring Act in January 2011 allows for more
flexibility to impose losses on certain debt classes and has made
government support less predictable. The review will assess
whether those uncertainties are consistent with such high uplift.

What Could Move The Ratings Up/Down

The review for downgrade indicates that there is currently no
upwards rating pressure for pbb's ratings. Downwards pressure on
the E+ BFSR could be triggered by (i) a failure to restore pbb's
business franchise; (ii) renewed setbacks due to higher-than-
anticipated credit losses in pbb's core business areas; (iii)
difficulties in tapping the unsecured debt markets; and/or (iv)
unforeseen losses on pbb's selective exposure to peripheral euro
area economies.

Downward pressure on the A3 ratings could result from (i) a
further downgrade of the E+ BFSR; (ii) an unexpected reduction in
support or a sooner-than-warranted exit by the German government;
and/or (iii) a gradual reduction in pbb's systemic importance.

Principal Methodologies

The principal methodology used in these ratings was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.


FRESENIUS SE: Moody's Maintains 'Ba1' CFR on Review for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has said that the Ba1 corporate family
rating (CFR) of Fresenius SE ("FSE") remains on review for
downgrade following the company's announcement on 29 June 2012
that its bid to acquire Rhoen Klinikum AG has failed to achieve
the required 90% acceptance.

Moody's notes that the total shares tendered amounted to 84.3%,
with FSE's bid negatively affected by competitor Asklepios's
last-minute acquisition of shares of 5.01%, which were not
tendered. Even without Asklepios's shares, more than 10% of
shares were not tendered, which could be a combination of retail
investors failing to respond and/or other minority shareholders
declining the offer.

Moody's will maintain FSE's rating on review for downgrade given
that the transaction could still go ahead, albeit possibly on
modified terms, with the company having communicated that it will
be exploring its options over coming days/weeks.

If FSE were to abandon the transaction and fail to identify any
other means of external growth at a similar size, Moody's would
most likely confirm (1) the company's CFR at Ba1; (2) its secured
debt at Baa3; and (3) its unsecured notes at Ba1. At the same
time, Moody's would likely withdraw the (P)Ba1 rating assigned to
around EUR3 billion of bank lines put in place by FSE for the
acquisition. Should FSE abandon the transaction, the rating
agency does not expect that the company would be materially
affected by its likely loss on five million Rhoen shares acquired
in the open market. This is because that FSE will continue to
benefit from more than EUR1 billion of new equity raised in June
2012, while the Rhoen losses are likely to amount to no more than
EUR10-20 million. Depending on how the company uses the proceeds
and given its longer-term track record of acquisitive growth, the
new equity could exert upward pressure on the rating.


GWB IMMOBILIEN: Files for Insolvency Proceedings in Reinbek
-----------------------------------------------------------
The Management Board of GWB Immobilien AG on July 3 filed for
insolvency proceedings at the competent local court in Reinbek.

The Management Board and the preliminary insolvency administrator
will work together to secure the continuity of the company within
the insolvency proceedings.

GWB Immobilien AG develops, builds, and manages shopping malls,
and retail and warehouse centers.


KONARKA TECHNOLOGIES: Files for Bankruptcy in Nuremberg Court
-------------------------------------------------------------
Solar Industry reports that Konarka Technologies GmbH, a
subsidiary of Konarka Technologies Inc., says it is facing the
threat of insolvency and has filed for bankruptcy with the
Nuremberg District Court.

According to Solar Industry, a statement from the company said
Konarka Technologies GmbH "has been forced to file for
bankruptcy" as part of its parent company's liquidation
proceedings pursuant to the Chapter 7 bankruptcy filing.

Attorney Alexander Kubusch of national German insolvency
administration firm CURATOR AG -- who has been appointed as the
preliminary insolvency administrator -- is optimistic that
operations will continue, Solar Industry notes.

"We can sustain the R&D work in Germany without any difficulties
at the moment," Solar Industry quotes Mr. Kubusch as saying.
"Nonetheless, our objective must be to find a suitable investor
as quickly as possible who's prepared to get the company's first-
class development work back on track again and to guarantee its
production operations and future developments in the long term,
because a successful transfer of the U.S. parent group is
currently still very much up in the air.

"If, however, we are able to find an investor and also keep the
existing, as well as government research, contracts in the
company, I have every confidence that the company will be able to
keep going long term at its Nuremberg site," he adds.

Konarka Technologies GmbH is responsible for research and
European sales.


POWERWIND GMBH: Restructuring Continues; Seeks Buyer
----------------------------------------------------
North American Windpower reports that the restructuring of
PowerWind GmbH continues as expected.

At the beginning of July, the local court of Hamburg allowed the
company to proceed with its restructuring measures, North
American Windpower relates.  The company says its priority is to
stabilize the business and find an investor, North American
Windpower notes.

After discussions with customers and suppliers, the company says
it has been able to continue business activities since the end of
April without disruption, North American Windpower discloses.
Further, the company notes the discussions formed a structured
process for the purposes of finding a buyer, according to North
American Windpower.

PowerWind, as cited by North American Windpower, said that the
objective is to reach an agreement with a potential investor on
the acquisition of the company by the beginning of August.

PowerWind GmbH is a Hamburg, Germany-based wind turbine
manufacturer.


SOVELLO GMBH: Likely to Cut More Than 500 Jobs, Union Claims
------------------------------------------------------------
Recharge reports that a trade union representative has revealed
that more than 500 posts are likely to be cut at insolvent
Sovello GmbH, contradicting the company's own recent claim that
no job losses are imminent.

Recharge relates that the contrasting stories underscore the
confusion felt across Germany's pioneering PV sector as globally
renowned names that have recently gone bankrupt -- including
Sovello's former parent company Q-Cells -- scramble to
restructure themselves and woo foreign buyers.

According to the report, Sovello has not directly addressed the
union representative's claims that 548 of the company's 1,250-
person workforce are to be let go as part of its restructuring
program, which was unveiled last month when it announced its
insolvency.

At the time, Sovello said that it had enough money to pay its
full staff through to the end of July, and it planned to continue
producing wafers, cells and modules during the restructuring
process, Recharge relays.

Recharge says Sovello has hired KPMG to lead its quest of
identifying and negotiating with potential buyers.

Chief executive Reiner Beutel claims that "several interested
parties" have already been in touch with the company, the report
adds.

As reported in the Troubled Company Reporter-Europe on May 16,
2012, Bloomberg News said Sovello GmbH filed for insolvency and
will attempt to restructure in the process.  According to
Bloomberg, Sovello said the company cannot pay its debts and has
asked the Dessau insolvency court to be allowed to restructure
under its management.  The company said that attorney Bernd
Depping has been appointed as preliminary administrator.

Sovello GmbH is a solar-power company based in Bitterfeld-Wolfen,
Germany.



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G R E E C E
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NATIONAL BANK OF GREECE: Auditors Raise Going Concern Doubt
-----------------------------------------------------------
National Bank of Greece S.A. and subsidiaries filed its annual
report on Form 20-F for the fiscal year ended Dec. 31, 2011.

Deloitte Hadjipavlou, Sofianos & Cambanis S.A. expressed
substantial doubt about National Bank of Greece and subsidiaries'
ability to continue as a going concern.  The independent auditors
noted that the crisis in the Greek economy resulted in impairment
losses recorded in several classes of assets, such as Greek
government bonds and other loans in Greece.  "These have
adversely impacted the financial position, the results of
operations, cash flows and regulatory ratios of the Bank, and
consequently of the Group.  Furthermore, the crisis has limited
the Bank's access to liquidity from other financial
institutions."

The Group reported a net loss of EUR14.507 billion on net
interest income before provision for loan losses of EUR3.648
billion for 2011, compared with a net loss of EUR308.0 million on
net interest income before provision for loan losses of Eur4.084
billion for 2010.

The Group's balance sheet at Dec. 31, 2011, showed
EUR103.467 billion in total assets, EUR107.371 billion in total
liabilities, US$283.4 million of redeemable non-controlling
interest, and a shareholders' deficit of EUR4.187 billion.

A copy of the Form 20-F is available for free at:

                       http://is.gd/4YvlgY

National Bank of Greece S.A., along with subsidiaries, is the
largest financial institution in Greece by market capitalization,
holding a significant position in Greece's retail banking sector,
with more than 11 million deposit accounts, more than three
million lending accounts, 539 branches and 1,398 ATMs as at
Dec. 31, 2011.  The Group's core focus outside of Greece is in
Turkey and SEE, where it currently operates in Bulgaria, Serbia,
Romania, Albania, Cyprus and FYROM.

The Bank is the Group's principal operating company, representing
67.5% of its total assets as at Dec. 31, 2011.



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H U N G A R Y
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* HUNGARY: Major Banks Shut Down 94 Branches in First Half 2012
---------------------------------------------------------------
MTI-Econews reports that a survey carried out by the financial
daily Vilaggazdasag showed major Hungarian banks shut down 94
branches in the first half of 2012 after closing 60 last year.

None of the 14 commercial banks covered by the survey added to
its network in the first half, MTI-Econews says.  The combined
number of their branches fell by 185 from a peak reached at the
end of 2009, MTI-Econews discloses.

According to MTI-Econews, the daily noted that between 2004 and
2008 the 14 banks combined opened more than 500 branches, raising
their network by almost 50%.



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I R E L A N D
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ALBURN: Auditors Cast Going Concern Doubt
-----------------------------------------
According to Irish Independent's Gordon Deegan, a report lodged
by auditors KPMG with the Companies Office showed that Noel
Smyth's Alburn business is loss-making and there are a number of
material uncertainties that could cast significant doubt on the
ability of the company to continue as a going concern.

Irish Independent relates that Tom McEvoy of KPMG said: "These
matters include the provision by NAMA of working capital
facilities and financial support to cover certain operating cash
requirements and the continued renewal by NAMA of bank
facilities."

The note continues: "While the ultimate outcome of these matters
cannot be assessed with certainty at this time, the directors are
of the opinion that, based on the current discussions and the
group's ongoing relationship with NAMA, there is no reason to
believe that the continued support from NAMA will not be
forthcoming."

In his report, Mr. McEvoy confirmed that Alburn was loss-making
in the year to the end of June 30, 2011, Irish Independent
discloses.

According to Irish Independent, he also states that the balance
sheet of the company shows an excess of liabilities over assets
"and in our opinion, on that basis, there did exist at June 30,
2011, a financial situation which, under Section 40(1) of the
Companies (Amendment) Act 1983 would require the convening of an
EGM of the company".

Last year, the National Asset Management Agency took possession
of Mr. Smyth's entire art collection of almost 400 pieces as part
of a down-payment on debts owed by Alburn, Irish Independent
recounts.

The company's loans have been transferred to NAMA, Irish
Independent notes.

Alburn is a Dublin-based business.


IRISH LIFE: S&P Lifts Rating on EUR200MM Jr. Sub. Notes From 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit and insurer financial strength ratings on
Ireland-based insurer Irish Life Assurance PLC (ILA) to 'BBB+'
from 'BBB-'.

"We also raised the rating on the EUR200 million junior
subordinated notes issued by ILA to 'BBB-' from 'BB' and removed
all ratings from CreditWatch with developing implications. The
upgrade reflects our view that the sale to the Irish government
on June 29, 2012 has significantly reduced ILA's risks and
exposures relating to the weaker Permanent TSB Group Holdings
PLC, its former parent. The ratings on ILA are now aligned with
its stand-alone credit profile. The ratings were originally
placed on CreditWatch with negative implications on Nov. 26,
2010, to mirror the CreditWatch placement on Ireland's sovereign
rating. Issues relating to its parent bank caused us to lower the
ratings to 'BBB-' from 'BBB' on Feb. 2, 2011, and keep them on
CreditWatch negative," S&P said.

"We revised the CreditWatch to developing on April 5, 2011, when
the bank announced that it would sell ILA.  The ratings on ILA
reflect its strong competitive position, a diversified
distribution base, and very strong risk-based capital adequacy.
These factors are partially offset, however, by the company's
lack of geographic diversity. This is especially relevant given
its reliance on the weakened Irish economy, and its relatively
volatile operating performance, which leaves revenues sensitive
to equity market conditions," S&P said.

"According to our government-related entity criteria, there is a
"limited" link between ILA and the Irish government and we view
ILA's role to the government as being of "limited importance."
Accordingly, we consider the likelihood of extraordinary
government support to be low. This view is consistent with the
government's stated intention to sell ILA as soon as market
conditions allow it to do so at a suitable price. The timing of
any sale is uncertain, but in our opinion is unlikely to occur
before 2014. The negative outlook is aligned with the negative
outlook on the Irish sovereign rating. Any downgrade in the Irish
sovereign rating will likely trigger a similar rating action on
ILA. A significant worsening of ILA's stand-alone credit profile
may also result in negative rating action. However, an
improvement in ILA's stand-alone characteristics would not lead
us to raise the rating, unless we were also taking positive
action on the Irish sovereign. ILA's rating is currently
constrained by that on the Irish sovereign, reflecting its
exposure to sovereign investments, even though this risk is
partly mitigated by being shared with policyholders. It also
incorporates the risks of having an entirely Irish customer base,
given the current economic environment in Ireland," S&P said.


MERCATOR CLO: S&P Raises Class B-2def Notes Rating to CCC+ (sf)
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Mercator CLO III Ltd.'s class A-2, A-3def, B-1def, and B-2def
notes.  "At the same time, we have affirmed our rating on the
class A-1 notes," S&P said.

"The rating actions follow our assessment of the transaction's
performance, and the application of our relevant criteria for
transactions of this type," S&P said.

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

"From our analysis, we note that there has been an improvement in
the underlying credit quality of the portfolio. For example, our
analysis shows a significant reduction in the proportion of
assets that we consider to be rated in the 'CCC' category
('CCC+', 'CCC', and 'CCC-') since we last reviewed the
transaction. The proportion of 'CCC' rated assets decreased to
7.71% from 14.42% of the portfolio's performing asset balance
since our last review. At the same time, we have also observed a
decrease in the proportion of defaulted assets (those rated 'CC',
'SD' [selective default], or 'D') to 3.49% from 3.73%. Combined
with a shorter weighted-average life, the scenario default rates
(SDRs) have reduced at each rating level since our previous
review. We have also noted an increase in the weighted-average
spread earned on Mercator CLO III's collateral pool. We subjected
the capital structure to a cash flow analysis to determine the
break-even default rate for each rated tranche. In our analysis,
we have used the reported portfolio balance, weighted-average
spread, and weighted-average recovery rates that we consider to
be appropriate. We have incorporated various cash flow stress
scenarios, using alternative default patterns, levels, and
timings for each liability rating category, in conjunction with
different interest rate stress scenarios," S&P said.

At closing, Mercator CLO III entered into derivative obligations
to mitigate currency risks in the transaction.

"We consider that the documentation for these derivatives does
not fully reflect our 2012 counterparty criteria. We conducted
our cash flow analysis assuming that the transaction does not
benefit from the support of derivatives. Taking into account our
credit and cash flow analysis and our 2012 counterparty criteria,
we have concluded that the level of credit enhancement available
to the class A-1 notes is commensurate with the current 'AA (sf)'
rating," S&P said.

"We have therefore affirmed our ratings on the class A-1 notes,"
S&P said.

"In our view, our ratings on the class A-2, A-3def, B-1def, and
B-2def notes are commensurate with higher ratings than we
previously assigned due to the level of available credit
enhancement. We have therefore raised our ratings on these notes.
We have also applied the largest obligor default test, a
supplemental stress test that we introduced as part of our
criteria update," S&P said.

The test aims to measure the effect on ratings of defaults of a
specified number of largest obligors in the portfolio with
particular ratings, assuming 5% recoveries

"In addition, we applied the largest industry default test,
another of our supplemental stress tests. Our cash flow analysis
shows that the level of credit enhancement available commensurate
with higher ratings on the class B-2 def notes. However, our
analysis also shows that the application of our supplemental
stress test constrains the rating on the class B-2def notes at
'CCC+ (sf)'. Mercator CLO III is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms," S&P said.

Ratings List

Class               Rating
             To               From

Mercator CLO III Ltd.
EUR307.7 Million Floating-Rate Notes

Ratings Raised

A-2         AA- (sf)          A- (sf)
A-3def      BBB+ (sf)         BBB- (sf)
B-1def      BB+ (sf)          B+ (sf)
B-2def      CCC+ (sf)         CCC- (sf)

Ratings Affirmed

A-1          AA (sf)



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


BANCA DEI PASCHI: S&P Cuts Tier 1 Hybrid Securities Rating to 'C'
-----------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its issue ratings
to 'C' from 'B' on Tier 1 hybrid securities and to 'C' from 'B+'
on Upper Tier 2 securities.

"We also removed these ratings from CreditWatch, where we placed
them with negative implications on June 18, 2012. The downgrades
follow MPS' announcement of the launch of a tender offer on its
outstanding Tier 1 and Upper Tier 2 securities on June 27, 2012,"
S&P said.

As of now, the total amounts of securities subject to the offer
are: A nominal value of EUR650 million for Tier 1 securities, and
A nominal value of EUR750 million and GBP200 million for the
Upper Tier 2 securities For Tier 1 rated instruments, the amount
affected is EUR350 million, along with about EUR750 million and
GBP200 million of securities in the Upper Tier 2 category. The
downgrades reflect our view that the tender offer for the Tier 1
and Upper Tier 2 securities is a "distressed exchange" under our
criteria.

"In other words, if the exchange offer doesn't take place, we see
an increased risk that MPS would defer the coupon payments on its
Tier 1 and Upper Tier 2 securities in the future. We think it's
likely that the European Commission and the Bank of Italy would
seek to preserve capital after MPS' request for government
support announced on June 27, 2012 to comply with the European
Banking Authority's (EBA) 9% recommended core tier 1 ratio by
June 30, 2012. As part of the aid package to MPS, we think
European authorities and the Italian regulator might impose
restrictions, where possible according to contractual terms of
the instruments. This could result in dividend and coupon
deferrals for MPS' Tier 1 and Upper Tier 2 instruments," S&P
said.

"We note that the terms and conditions for the Tier 1 instruments
only allow for dividend deferral after 12 months have elapsed
since the last dividend distribution or other discretionary
distribution.  The rating actions do not currently affect our
counterparty credit ratings on MPS or any other issue ratings on
MPS' debt, all of which remain on CreditWatch with negative
implications, where they were originally placed on June 18, 2012.

"On completion of the tender offer, we will review the ratings on
any of MPS' untendered Tier 1 and Upper Tier 2 securities," S&P
said.

Ratings List

Downgraded; CreditWatch Action
                                        To                 From
Banca Monte dei Paschi di Siena SpA
Junior Subordinated                    C
B+/Watch Neg

MPS Capital Trust I
Preferred Stock*                       C
B/Watch Neg

MPS Preferred Capital I LLC
Preferred Stock*                       C
B/Watch Neg

*Guaranteed by Banca Monte dei Paschi di Siena SpA


BANCA NETWORK: Italian Prosecutors Mulls Probe Into Collapse
------------------------------------------------------------
Chiara Albanese at Investment Europe reports that Italian
prosecutors are discussing the possibility of launching an
investigation into Banca Network Investimenti, the Italian bank
put into administration in November 2011.

Investment Europe, citing local press agencies, says the
investigation would be launched in Milan for bankruptcy fraud and
for white collar crimes committed by the management which led to
its insolvency.

At the end of May it suspended all payments to its 22,000
creditors, and its network of financial advisers was acquired by
Modena-based asset manager Consultinvest, Investment Europe
recounts.


BANCA POPOLARE: Moody's Withdraws 'Ba1' Sr. Unsecured Debt Rating
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the ratings assigned to
Banca Popolare dell'Alto Adige-Suedtir. Volksbank's (BPAA) EUR1.0
billion Euro Medium-Term Note (EMTN) program: the Ba1 senior
unsecured debt rating, the provisional (P)Ba2 subordinated
rating, the (P)Ba3 junior subordinated rating and the (P)Ba2 Tier
III rating. BPAA's other ratings -- the Ba1/Not-Prime issuer
ratings -- are not affected by these rating actions.

Concurrently, Moody's has also withdrawn the Ba1 rating on BPAA's
outstanding EUR75 million senior bond (ISIN XS0717070162,
maturity date: March 7, 2014). The senior bond was issued under
the above-mentioned EMTN program.

However, the ratings on BPAA's outstanding EUR100 million senior
bond (ISIN XS0591785802, maturity date: February 15, 2013),
EUR100 million senior bond (ISIN XS0539339985, September 14,
2012), EUR5 million senior bond (ISIN XS0553054635, maturity: 2
November 2015) and EUR20 million senior bond (ISIN XS0465274370,
maturity: November 23, 2012), issued under the above-mentioned
EMTN program remain unchanged.

Current Bank Ratings

- Bank deposits: Ba1/NP

- Standalone bank financial strength rating: D+

- Standalone credit assessment: (ba1)

- Adjusted standalone credit assessment: (ba1)

- Senior unsecured -- local currency: Ba1

Ratings Rationale

Moody's has withdrawn the credit ratings for business reasons.

This rating action does not reflect a change in BPAA's
creditworthiness.

Headquartered in Bolzano, Italy, BPAA reported total consolidated
assets of EUR5.6 billion under audited IFRS as of the end of
December 2011.



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


ASTANA FINANCE: Creditors Back US$1.9BB Debt Restructuring Plan
---------------------------------------------------------------
Nariman Gizitdinov at Bloomberg News reports that AO Astana
Finance's creditors backed a plan to restructure US$1.9 billion
of debt, triggering losses for the Kazakh financial company's
international investors.

Creditors who hold 79.6% of the company's debt approved the plan
in Almaty on June 29, Bloomberg says, citing the minutes of a
meeting posted on Monday on its Web site.

Astana Finance became the third Kazakh financial company to
default after it stopped servicing its international debt in
May 2009, Bloomberg discloses.

Astana Finance will distribute US$100 million in cash to
international creditors, issue US$75 million of one-year zero-
coupon bonds, and issue at least US$165.6 million of bonds due
2016 according to the minutes of the meeting, Bloomberg notes.

The minutes show that in addition, international creditors will
get at least 60% of the company's stock and US$50 million of 12-
year recovery notes, granting them a share of anything recovered
from impaired assets, Bloomberg relates.  Astana Finance said in
a July 2009 presentation that it owed KZT172.2 billion (US$1.2
billion) to global creditors including export credit agencies,
Bloomberg recounts.

The minutes also show that senior domestic creditors will receive
KZT14.8 billion of bonds, while subordinated domestic debt
holders will get KZT5.4 billion of securities, Bloomberg states.

The minutes show that the claimants with "operational debt
claims" will be entitled to a cash payment of 15% of their
outstanding claims, payable in tenge, according to Bloomberg.

Joint Stock Company Astana Finance (Astana Finance), through its
subsidiaries, provides various financial products and services in
the Republic of Kazakhstan.  It provides current accounts, saving
accounts, and other deposits; investment savings products; and
various loans comprising mortgage, consumer, and car loans, as
well as other credit facilities.



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


BANCO SANTANDER: Moody's Reviews 'Ba1' Ratings for Downgrade
------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba1 long-term debt and deposit ratings of Banco Santander Totta
(BST), the senior subordinated debt of (P)Ba2 and its junior
subordinated debt of (P)Ba3, all of which previously had a
negative outlook.

Ratings Rationale for Review for Downgrade

The rating action follows the downgrade and review for further
downgrade of the parent bank's (Banco Santander S.A.) standalone
bank financial strength rating (BFSR) to C- (equivalent to a baa2
standalone credit assessment) from C/a3, which in turn was
prompted primarily by the downgrade and review for further
downgrade of the Spanish government's ratings.

BST's long-term debt and deposit ratings currently incorporate
two-notches of rating uplift from the ba3 standalone credit
assessment, reflecting Moody's assessment of a high probability
of parental support in case of need. The review of BST will focus
on the parental support available to BST in the event of a lower
rating of Banco Santander, which may potentially reduce the two-
notch parental support uplift of BST's debt ratings.

Since the bank's senior subordinated debt and junior subordinated
debt also factor in parental support, any change to the
assessment of parental support may also impact the ratings of
these instruments, and they have consequently also been placed on
review for downgrade.

BST's BFSR of D-/ba3 and its short-term debt and deposit ratings
of Not-Prime have not been affected by today's announcement.

What Could Move the Ratings Up/Down

Downwards pressure could be exerted on BST's long-term debt and
deposit ratings following a downgrade of its parent bank's
standalone credit strength, or if there are signs of a lower
probability of support from Banco Santander. In addition, Moody's
says that the ratings could be downgraded if the Portuguese
government's rating, currently Ba3 with a negative outlook, is
further downgraded or if BST's BFSR is also downgraded.

BST's BFSR could be negatively affected by (i) the failure to
accomplish targeted deleveraging and recapitalization plans; (ii)
a significant deterioration of its liquidity position; (iii) a
greater-than-expected deterioration of the economy that would
exert additional pressure on the bank's profitability, asset
quality and capital levels; and/or (iv) a relaxation of its risk-
management practices.

Upwards ratings pressure on BST's standalone rating could be
driven by (i) an improvement in its liquidity position, with
normalized access to wholesale funding; (ii) a significant
reduction of its exposure to sovereign risk either by a reduction
of its direct exposure to Portuguese government debt or by
diversifying its operations that are 100% concentrated on the
domestic market; (iii) a sustainable recovery of its
profitability and efficiency indicators; and (iv) a significant
reduction in credit-risk. An improvement in BST's BFSR could
prompt an upgrade of its debt and deposit ratings; however,
Moody's notes that it is unlikely for BST to have a higher
standalone rating than the Portuguese sovereign, given its
exposure to the Portuguese operating environment.

Methodology

The principal methodology used in these ratings was Moody's
Consolidated Global Bank Rating Methodology published in
June 2012.

Headquartered in Lisbon, Portugal, BST reported total audited
consolidated assets of EUR40.1 billion assets as of December 31,
2011.



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


SOVCOMFLOT AO: S&P Cuts Long-Term Corp. Credit Rating to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Russian shipping company AO Sovcomflot
to 'BB+' from 'BBB-'. The outlook is stable.

"At the same time, we lowered the Russia national scale rating on
the company to 'ruAA+' from 'ruAAA'. The rating downgrade
reflects our revised assessment of Sovcomflot's  stand-alone
credit profile (SACP), which we lowered to 'bb-' from 'bb'," S&P
said.

"We anticipate that Sovcomflot's cash flow measures will not
improve to a level supportive of the previous SACP by 2013,
notably because the company is pursing its partly debt-funded
expansion at a time when prospects for a significant rebound in
charter rates are weak. We understand that Sovcomflot's committed
capital expenditure budget, including vessels to be delivered in
2012-2015, has increased markedly over the past few months and
currently amounts to about $1.4 billion. Furthermore, given the
company's growth strategy and focus on expanding away from
conventional oil shipping, we believe it might pursue further
debt-funded  investments in the related gas- and offshore sectors
in the near to medium  term. The rating previously incorporated
our expectation that the company would make no additional
significant debt-funded capital investments beyond the
newbuilding program of about $900 million as of January 2012.
This, coupled with a moderate recovery in charter rates in 2013,
would have enabled  Sovcomflot to achieve a turnaround in cash
flow measures commensurate with the previous rating by 2013, such
as adjusted funds from operations (FFO) to debt of 15%," S&P
said.

However, in light of Sovcomflot's enlarged capital spending plan
we have revised our base-case forecasts and now anticipate that
the company's ratio of adjusted FFO-to-debt will stabilize at
10%-11% this year and subsequently improve to about 12% by 2013.
We consider a ratio of adjusted FFO-to-debt of about 12% as
consistent with a SACP of 'bb-' on Sovcomflot. In our view, there
is a "high" likelihood that Sovcomflot's 100% owner, the
government of the Russian Federation (foreign currency
BBB/Stable/A-2; local currency BBB+/Stable/A-2) would provide
timely and sufficient extraordinary  support to Sovcomflot in the
event of financial distress," S&P said.

"The stable outlook reflects our expectation that Sovcomflot will
continue to benefit from a "high" likelihood of government
support and that its SACP will stabilize as the company preserves
its moderate financial leverage and proactively manages its
liquidity position. As we estimate in our base-case operating
scenario, the ratio of adjusted FFO to debt will stabilize at
10%-11% in 2012 before improving to a rating-commensurate level
of about 12% by 2013, owing to slowly recovering charter rates.
We also anticipate that Sovcomflot will be able to sustain
adequate liquidity sources, including the timely renewal of
maturing revolving credit facilities, to maintain the current
ratings," S&P said.



=============================
S L O V A K   R E P U B L I C
=============================


ALEX TOUR: Files for Bankruptcy Following Financial Problems
------------------------------------------------------------
The Slovak Spectator, citing the Sme daily, reports that Alex
Tour travel agency filed for bankruptcy on July 2.

According to the Slovak Spectator, Hospodarske noviny economic
daily wrote that representatives of Alex Tour announced on the
travel agency's Web site that the firm had financial problems and
was not able to meet its commitments to customers, suggesting
that the travelers should contact Kooperatˇva insurance company
that will ensure the return of about 125 people currently abroad.

Alex Tour is based in the Slovak Republic.



===============
S L O V E N I A
===============


SKUPINA VIATOR: Failed Capital Increase Prompts Receivership
------------------------------------------------------------
SeeNews, citing state-run news agency STA, reports that the
Ljubljana district court decided on Tuesday to stay the debt
restructuring at Slovenia's Skupina Viator&Vektor, the holding
company of the namesake logistics group, and place it in
receivership.

According to SeeNews, STA said that the decision of the court
came after the holding company missed a deadline for the
confirmation of a capital increase.

Skupina Viator&Vektor is based in Slovenia.



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


FONCAIXA HIPOTECARIO: S&P Withdraws 'D' Rating on Class D Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
the class A and B notes in Foncaixa Hipotecario 8, Fondo de
Titulizacion Hipotecaria and Foncaixa Hipotecario 10, Fondo de
Titulizacion de Activos.

"At the same time, we have affirmed our ratings on Foncaixa
Hipotecario 8's class C notes, and Foncaixa Hipotecario 10's
class C and D notes. We have subsequently withdrawn our ratings
on all of the notes in these transactions," S&P said.

Caixabank S.A. (BBB+/Stable/A-2) originated the portfolios
backing these  Spanish residential mortgage-backed securities
(RMBS) transactions, which were backed by mortgage loans granted
to individuals for the acquisition of residential properties.

The rating actions follow notice that the notes in these
transactions redeemed on June 29, 2012, without any remedy
actions taken following our Feb. 13, 2012 downgrade of Caixabank
-- the guaranteed investment contract provider and swap
counterparty in these transactions.

"Our downgrade of Caixabank resulted in the breach of a
counterparty replacement trigger in each of the transactions'
documents. In such circumstances, these documents require the
counterparty to take remedy action within a prescribed timeframe.
Failing this, our ratings in these transactions would be capped
at our long-term issuer credit rating on the relevant
counterparty. After our downgrade of Caixabank, we received
written confirmation from the trustee, Gesticaixa S.G.F.T. S.A.,
that both transactions would be redeemed early, on June 29, 2012.
There have since been no remedy actions, and the issuer has
repaid the full balance of the notes.  As the remedy actions did
not take place, we have today lowered to 'BBB+ (sf)' our ratings
on the class A and B notes. Additinoally, we have affirmed our
ratings on the rest of the notes in both transactions, which we
already rated below the cap outlined in our counterparty
criteria. Moreover, as the notes have been fully redeemed, we
have subsequently withdrawn all of our ratings in these
transactions," S&P said.

Ratings List

Class              Rating
            To                From

Foncaixa Hipotecario 8, Fondo de Titulizacion Hipotecaria
EUR1 Billion Mortgage-Backed Floating-Rate Notes

Ratings Lowered and Withdrawn

A           BBB+ (sf)         AA+ (sf)
            NR                BBB+ (sf)
B           BBB+ (sf)         A (sf)
            NR                BBB+ (sf)

Rating Affirmed and Withdrawn

C           BBB (sf)
            NR                BBB (sf)

Foncaixa Hipotecario 10, Fondo de Titulizacion de Activos
EUR1.512 Billion Mortgage-Backed Floating-Rate Notes
(Of Which 12 Million Are Floating-Rate Notes)

Ratings Lowered and Withdrawn

A           BBB+ (sf)         AA+ (sf)
            NR                BBB+ (sf)
B           BBB+ (sf)         AA- (sf)
            NR                BBB+ (sf)

Ratings Affirmed and Withdrawn

C           BBB (sf)
            NR                BBB (sf)
D           D (sf)
            NR                D (sf)

NR-Not rated.



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


NIMBUS: DNB ASA Has Exposure in Bankruptcy
------------------------------------------
Kim McLaughlin at Bloomberg News, citing Dagens Industri, reports
that DNB ASA exposed in the bankruptcy of Swedish pleasure boat
maker Nimbus, controlled by Altor.

According to Bloomberg, in Nimbus' latest annual report, debt to
credit institutions is noted at SK275 million.

Nimbus is a Swedish pleasure boat maker.



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


* TURKEY: Moody's Takes Rating Actions on 16 Turkish Banks
----------------------------------------------------------
Moody's Investors Service has taken a range of rating actions on
16 Turkish financial groups and their subsidiaries. The rating
actions primarily reflect three drivers:

(i) The Turkish sovereign's creditworthiness has improved,
reflected in Moody's upgrade on June 20 of Turkey's government
bond rating to Ba1, with a positive outlook, from Ba2. Moody's
says that the Turkish sovereign upgrade has had credit-positive
effects on ratings of various banks.

(ii) Moody's has concluded the review -- initiated on 16 March
2012 -- of Turkish banks' standalone credit assessments that were
previously above the sovereign rating level. The conclusion of
the review reflects Moody's revised assessment of the linkage
between the credit profiles of sovereigns and financial
institutions globally. Taking into account the high correlation
between sovereign and bank creditworthiness, and consistent with
Moody's global approach, Moody's has lowered its standalone
credit assessments on 11 banks at the level of the sovereign
rating.

(iii) For three foreign-owned Turkish banks, their parent banks'
weakened creditworthiness has negatively affected either their
standalone credit assessment or Moody's assumptions of parental
support.

These partly counter-acting drivers resulted in a number of
Turkish bank rating upgrades, downgrades, affirmations and
confirmations. The rating actions are summarized below, and the
ratings rationales are discussed after that.

The numbers of affected banks shown in the summary of actions
below focus on Turkish banking groups. The actions on the rated
subsidiaries of these groups are discussed later in the press
release. Please click on the following link to access the full
list of affected credit ratings. This list is an integral part of
this press release and identifies each affected issuer:
(http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143429)

SUMMARY OF ACTIONS

-- FOREIGN-CURRENCY DEPOSIT RATINGS MOSTLY UPGRADED

Of the 15 Turkish banks or banking groups with long-term foreign
currency deposit ratings, 14 were upgraded by one notch to Ba2,
and one is unchanged. In particular, the ratings were upgraded by
one notch to Ba2 for all seven-largest Turkish banks, namely
Akbank TAS (Akbank), T.C. Ziraat Bankasi (Ziraatbank), Turkiye
Garanti Bankasi AS (Garantibank), Turkiye Halk Bankasi AS
(Halkbank), Turkiye Is Bankasi AS (Isbank), Turkiye Vakiflar
Bankasi TAO (Vakiflar), and Yapi Ve Kredi Bankasi (Yapi Kredi).
The upgrades were triggered by Moody's decision to increase its
ceiling for foreign currency deposit ratings of private Turkish
issuers, which defines the highest foreign currency deposit
rating any Turkish bank can achieve. This ceiling increased to
Ba2, following the sovereign upgrade. The ratings of the seven
largest Turkish banks are now at the revised Ba2 foreign currency
deposit ceiling.

-- FOREIGN-CURRENCY DEBT AND/OR ISSUER RATINGS MOSTLY UPGRADED

Of the seven banking groups with foreign currency debt and/or
issuer ratings (as applicable), five banks (Akbank, Garantibank,
Isbank, Vakiflar and Yapi Kredi) saw these ratings upgraded by
two notches to Baa2; and at two banks they remain unchanged.
These upgrades were triggered by Moody's decision to raise its
ceiling for foreign currency debt and issuer ratings, which
defines the highest such rating any Turkish private issuer
(including banks) can achieve. Following the sovereign upgrade,
this ceiling was raised to Baa2, and the ratings of Akbank,
Garantibank, Isbank, Vakiflar and Yapi Kredi are now at the
revised Baa2 foreign currency debt and issuer rating ceiling.

-- LOCAL-CURRENCY DEPOSIT RATINGS MOSTLY DOWNGRADED OR UNCHANGED

Of the 15 Turkish banking groups with local currency deposit
ratings, the ratings of four were upgraded, six remained
unchanged and the ratings of another five banks were downgraded.
For all of the seven largest Turkish banks, the local currency
deposit rating is Baa2. Of the seven largest Turkish banks,
Ziraatbank, Halkbank and Vakiflar saw their local currency
deposit ratings upgraded by one notch, at Isbank and Yapi Kredi,
these ratings are unchanged. The local currency deposit ratings
of Akbank and Garantibank were downgraded by one notch. The
combination of lower standalone credit assessments (see below)
and higher sovereign creditworthiness had counter-acting effects
on these ratings.

-- STANDALONE CREDIT ASSESSMENTS MOSTLY LOWER

Of the 16 Turkish banking groups with standalone credit
assessments, five experienced no change, and 11 experienced a
decrease. Moody's lowered the standalone credit assessments for
all seven largest banks to ba1 (on a scale from aaa, highest, to
c, lowest), in line with the sovereign rating, reflecting Moody's
view of the linkages between sovereign and bank creditworthiness.

-- OTHER RATINGS

Other affected ratings include short-term foreign and local
currency ratings, as well as national-scale ratings (NSRs).
Today's actions on these ratings follow closely the actions on
foreign and local currency long-term ratings and standalone
credit assessments, as discussed below.

RATINGS RATIONALE

RATIONALE -- Standalone Credit Assessments

The lower standalone credit assessments of 11 Turkish banking
groups reflect Moody's assessment of high correlation between
sovereign and bank creditworthiness. Moody's believes that the
creditworthiness of financial institutions with low cross-border
operational diversification and/or high balance-sheet exposure to
the debt of their domestic sovereign is closely linked to the
domestic sovereign's credit strength. Banks in systems with these
characteristics, which apply to Turkey, are unlikely to have
standalone credit assessments above the sovereign, which is often
viewed as the lowest credit risk in the local market or currency.

Turkish banks have strong capital bases against potential losses
from their loan portfolios and a moderate reliance on wholesale
market funds. Both factors limit the banks' vulnerability to
sovereign risk. However, Moody's says that the banks' revenue
generation is primarily within Turkey and their balance sheets
have a high direct exposure to the sovereign (primarily through
securities holdings). These two factors elevate the banks'
susceptibility to event risk at the sovereign level. Moody's has
therefore adjusted these standalone credit assessments at the
same level of the sovereign's rating.

The recent upgrade of Turkey's government debt rating limited the
scope and magnitude of the number of banks that were downgraded.
Moody's says that since the sovereign upgrade, banks with
standalone credit assessments of ba1 or lower are no longer
constrained by the sovereign rating. These ratings were therefore
confirmed at their current level.

The outlooks of Moody's standalone credit assessments are stable
at nine of the 16 Turkish banking groups that have standalone
credit assessments. The outlooks are negative for three banks,
positive for one bank and the standalone credit assessments
remain on review for downgrade at three banks. In each case, the
negative outlooks and ongoing reviews reflect institution-
specific drivers.

RATIONALE -- Debt and Deposit Ratings

In addition to a bank's standalone creditworthiness, Moody's
deposit ratings also incorporate assumptions about potential
external support from a parent institution, and/or a regional or
national government. These assumptions reflect both the capacity
and the willingness of such a third party to support a bank in
the event of stress.

In most cases, the deposit and debt ratings of the banks benefit
from several notches of uplift due to government and/or parental
support assumptions. These ratings have been positioned up to
three notches above the Turkish banks standalone credit
assessment, depending on (i) Moody's assessment of the
willingness and capacity of parents to provide support in the
event of need; and (ii) each bank's systemic importance to the
Turkish financial system as a deposit-taker and lender.

RATIONALE -- Local Currency Deposit and Issuer Ratings

For many banks, the negative impact of lower standalone credit
assessments were outweighed by the positive impact of improved
sovereign creditworthiness which led to an increase in the
support-driven ratings uplift for banks which Moody's views as
systemically important in Turkey. For some banks, increased
support-driven ratings uplift led to upgrades for their local
currency issuer or deposit ratings. For others, Moody's says that
this increase was offset by the lowering of their standalone
credit assessments and/or the impact of the weakened credit
profiles of their European parents. These banks had their local
and foreign currency long-term ratings either confirmed or
downgraded. At three banks, these ratings remain on review for
further downgrade (or with direction uncertain) to capture
factors specific to these banks.

SUPPORT ASSUMPTIONS LIFT MANY BANK RATINGS ABOVE THEIR STANDALONE
CREDIT ASSESSMENTS

For 10 out of the 15 Turkish banking groups with local currency
deposit and issuer ratings, these ratings are now at Baa3 or
Baa2, and thus above the Ba1 government bond rating. The
differential reflects Moody's opinion that the Turkish government
has a high propensity to provide support to its domestic banking
system, even if doing so could weaken the government's own credit
profile in the unlikely event of a systemic crisis. Moody's
assessment of support takes into account

(i) The Turkish government's ability and strong willingness to
support the banking system, as demonstrated during past financial
crises;

(ii) The government's broad array of financial and non-financial
tools available to offer support, including liquidity support and
regulatory forbearance; and

(iii) The banking system's intrinsic strength, demonstrated
during the ongoing crisis and past global downturns, as well as
the banking system's limited size relative to the Turkish economy
which limits the potential support need in a crisis scenario.

Given the above-mentioned considerations, support assumptions can
result in a Turkish bank's local currency deposit, debt and
issuer ratings being up to two notches higher than the sovereign
rating. The up-to-two notches differential is higher than for
many other countries. This reflects Moody's view that the Turkish
government has a comparatively stronger ability and willingness
to support domestic banks than, for example, countries whose
banking systems are large relative to their economies, because
this increases the potential cost of support.

Moody's recognizes that government (or systemic) support is a
function of evolving social, political, economic and financial
developments in a country. Moody's believes that the Turkish
banking system and its financial obligations will continue to
grow strongly relative to the country's economy and the
government's own financial sources in coming years.

Therefore, Moody's would expect that over time, the maximum
rating level a Turkish bank can achieve as a result of government
support assumptions will converge towards the sovereign rating.
In this case, further improvements in the creditworthiness and
the rating of the Turkish sovereign would have only a muted or no
impact on the support-driven uplift factored into bank ratings.
Accordingly, Moody's has assigned stable outlooks to most debt,
deposit and issuer ratings of Turkish banks, even though the
outlook on the sovereign rating is positive.

RATIONALE -- Foreign-Currency Deposits, Issuer and Debt Ratings

As stated above, the recent upgrade of Turkey's country ceilings
for foreign currency bank deposits (to Ba2 from Ba3) and for
foreign currency issuer and debt ratings (to Baa2 from Ba1), has
led to upgrades of the foreign currency deposit and debt ratings
of the banks, where applicable. The outlooks on the foreign
currency debt ratings are the same as the outlooks on the local
currency deposit ratings.

RATIONALE -- Short-Term Ratings

Short-term ratings are closely linked to the respective long-term
ratings. Accordingly, short-term rating changes follow changes to
the respective long-term ratings.

RATIONALE --- National Scale Ratings

The rating actions on the local currency deposit ratings of the
affected banks caused similar rating actions on the NSRs of these
banks. The NSRs map directly from the banks' local currency
deposit ratings and are intended as relative measures of
creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative
risks.

RATIONALE -- Other Affected Ratings

- Turkiye Sinai Kalkinma Bankasi AS's issuer rating has been
downgraded due to Moody's reassessment of the level of parental
support that is incorporated in the bank's rating.

- Garantibank International NV (GBI): The lowering of Garanti
Bank's standalone credit assessment (GBI's parent) below that of
its Dutch-based subsidiary resulted in the downgrade of GBI's
deposit ratings; they are now solely based on the bank's baa2
standalone credit assessment.

What Could Move The Ratings Up/Down

As the key drivers of today's actions are largely structural in
nature, upwards rating pressure is unlikely in the near term, as
reflected by stable or negative outlooks on most of the ratings.
Beyond the immediate future, a combination of an improvement in
the credit risk profile of some of the individual banks and/or
the national government could positively influence Turkish banks'
ratings.

Conversely, deterioration in the banks' operating environment --
and/or a weakening of their standalone financial fundamentals or
those of their parents -- could exert downwards pressure on the
ratings.

Principal Methodologies

The methodologies used in these ratings were Moody's Consolidated
Global Bank Rating Methodology published in July 2012 and
Government-Related Issuers: Methodology Update published in July
2010.

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



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


CORNERSTONE TITAN: Moody's Cuts Rating on Class E Notes to 'Caa2'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the following classes of
Notes issued by Cornerstone Titan 2005-1 p.l.c. (amounts reflect
initial outstandings):

Issuer: Cornerstone Titan 2005-1 p.l.c.

    GBP47.35M C Notes, Affirmed at Baa2 (sf); previously on
    May 22, 2009 Downgraded to Baa2 (sf)

    GBP77.06M D Notes, Downgraded to Caa1 (sf); previously on
    May 22, 2009 Downgraded to Ba3 (sf)

    GBP7.28M E Notes, Downgraded to Caa2 (sf); previously on
    May 22, 2009 Downgraded to B2 (sf)

Ratings Rationale

The downgrade reflects Moody's increased loss expectation for the
pool. This is primarily due to the sharp increase in the
refinancing risk for the Eagle Office Loan that represents 92.5%
of the pool combined with an elevated Moody's securitised pool
loan-to-value ("LTV") of 136%.

The rating on the Class C Notes is affirmed because its current
credit enhancement level of 82% and its Moody's note-to-value of
24% is sufficient to maintain the rating despite the increased
loss expectation for the pool. Upward rating pressure on the
Class C Notes is tempered as the transaction enters its
relatively short tail period in July 2012.

The key parameters in Moody's analysis are the default
probability of the securitized loans (both during the term and at
maturity) as well as Moody's value assessment for the properties
securing these loans. Moody's derives from those parameters a
loss expectation for the securitized pool.

In general, Moody's analysis reflects a forward-looking view of
the likely range of commercial real estate collateral performance
over the medium term. From time to time, Moody's may, if
warranted, change these expectations. Performance that falls
outside an acceptable range of the key parameters such as
property value or loan refinancing probability for instance, may
indicate that the collateral's credit quality is stronger or
weaker than Moody's had anticipated when the related securities
ratings were issued. Even so, a deviation from the expected range
will not necessarily result in a rating action nor does
performance within expectations preclude such actions . There may
be mitigating or offsetting factors to an improvement or decline
in collateral performance, such as increased subordination levels
due to amortization and loan re- prepayments or a decline in
subordination due to realized losses.

Primary sources of assumption uncertainty are the current
stressed macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2013, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) strong
differentiation between prime and secondary properties, with
further value declines expected for non-prime properties, and
(iii) occupational markets will remain under pressure in the
short term and will only slowly recover in the medium term in
line with anticipated economic recovery. Overall, Moody's central
global macroeconomic scenario is for a material slowdown in
growth in 2012 for most of the world's largest economies fueled
by fiscal consolidation efforts, household and banking sector
deleveraging and persistently high unemployment levels. We expect
a mild recession in the Euro area.

As the Euro area crisis continues, the rating of the structured
finance notes remain exposed to the uncertainties of credit
conditions in the general economy. The deteriorating
creditworthiness of euro area sovereigns as well as the weakening
credit profile of the global banking sector could negatively
impact the ratings of the notes. Furthermore, as discussed in
Moody's special report "Rating Euro Area Governments Through
Extraordinary Times -- An Updated Summary," published in October
2011, Moody's is considering reintroducing individual country
ceilings for some or all euro area members, which could affect
further the maximum structured finance rating achievable in those
countries.

Moody's Portfolio Analysis

Cornerstone Titan 2005-1 plc closed in October 2005 and
represents the securitization of initially 12 commercial mortgage
loans originated by Credit Suisse and GMAC Commercial Mortgage
Bank Europe plc and secured by first-ranking legal mortgages over
initially 71 commercial properties located across the UK.
Currently two loans remain that are secured by first-ranking
legal mortgages over two commercial properties. The pool exhibits
an above average concentration (95.4% based on UW market value)
to a single office property located in Central London. Moody's
uses a variation of Herf to measure diversity of loan size, where
a higher number represents greater diversity. Large multi-
borrower transactions typically have a Herf of less than 10 with
an average of around 5. This pool has a Herf of 1.16, slightly
lower than the 1.3 at Moody's prior review.

Eagle Office is the largest loan representing 92.5% of the pool.
The loan is secured by a single office property located in
Central London near the Barbican Underground station. Moody's
understands that the single tenant under the lease is likely to
vacate at lease expiry in around three years time. Moody's
securitized loan LTV is 129% compared to 105% as per the April
2012 reporting. Moody's expects the loan to default at its
maturity in July 2012.

The remaining Jubilee Way loan represents 7.5% of the pool. The
loan is secured by a single secondary retail property located in
the town of Scunthorpe (East Midlands). Moody's securitized loan
LTV is 222% compared to 183% as per the April 2012 reporting. The
loan has been in special servicing since April 2009.

Portfolio Loss Exposure: Moody's expects a large amount of losses
on the securitized portfolio, stemming mainly from the
refinancing profile of the securitized portfolio and its elevated
Moody's LTV of 136%. Given the default risk profile and the
anticipated work-out strategy for potentially defaulting loans,
the expected losses are likely to crystallize only towards the
end of the transaction term.

Rating Methodology

The methodology used in this rating is "Moody's Approach to Real
Estate Analysis for CMBS in EMEA: Portfolio Analysis (MoRE
Portfolio)" published in April 2006.

Other methodologies/factors used in this rating are described in
"European CMBS: 2012 Central Scenarios" published in February
2012 and "Rating Caps for CMBS in the Tail Period" published in
October 2011.

The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. Moody's prior assessment is summarized in a press
release dated May 22, 2009. The last Performance Overview for
this transaction was published on June 1, 2012.

In rating this transaction, Moody's used both MoRE Portfolio and
MoRE Cash Flow to model the cash-flows and determine the loss for
each tranche. MoRE Portfolio evaluates a loss distribution by
simulating the defaults and recoveries of the underlying
portfolio of loans using a Monte Carlo simulation. This portfolio
loss distribution, in conjunction with the loss timing calculated
in MoRE Portfolio is then used in MoRE Cash Flow, where for each
loss scenario on the assets, the corresponding loss for each
class of notes is calculated taking into account the structural
features of the notes.

As such, Moody's analysis encompasses the assessment of stressed
scenarios.


DECO 6-UK: S&P Lowers Rating on Class D Notes to D(sf)
------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
all classes of DECO 6 - UK Large Loan 2 PLC 's commercial
mortgage-backed notes.

The transaction closed in December 2005 and was initially secured
by four loans (Canary Wharf, St Enoch, Brunel, and Mapeley). Two
of the loans, Canary Wharf and St Enoch, have prepaid, and were
both secured by prime, well-let assets in their respective office
and retail sectors. In contrast, the two remaining loans in the
transaction, Brunel and Mapeley, are secured by secondary
properties in regional areas of the U.K., which are currently
experiencing declines in market rent and capital value.

As a result of tenant lease breaks, tenant insolvencies, and a
weakened rental market, cash flows have declined at a greater
rate than we expected. "In our opinion, the secondary nature of
the properties and the continued deterioration of the regional
office and retail sectors are likely to result in increased
susceptibility to vacancies, which would further depress property
values," S&P said.

The Brunel Loan

The Brunel loan was scheduled to mature in April 2012 and is
secured against the Brunel Shopping Centre in Swindon. The loan
has been in special servicing since June 2011, and failed to
repay at loan maturity in April 2012. The issuer has instructed
LPA (Law of Property Act) receivers to take control of the rental
income during the ongoing loan restructuring talks.

A new valuation of the property, dated Oct. 25, 2011, reports a
revised figure of GBP87.2 million, which reflects a 33% decline
from the valuation of GBP130.2 million at closing, and a current
senior loan-to-value (LTV) ratio of 116%.

The new valuation has triggered an appraisal-reduction mechanism
in the transaction, which limits the amount available to be drawn
from the liquidity facility. On the April 2012 interest payment
date (IPD), there was an interest shortfall on the class B, C,
and D notes as a result of the Brunel loan being unable to pay
loan interest.

"However, due to the maturity of the interest rate swap, we do
not believe that there will be further interest shortfalls. The
expiration of the swap means that the loan reverts to a floating
rate upon maturity, thereby increasing cash flow available to
meet note interest payments. In our opinion, this excess cash
flow will be enough to repay accrued interest, liquidity facility
draws, and interest payments for the July IPD," S&P said.

The loan has a senior LTV ratio of 116%, the asset income is
currently insufficient to cover interest payments, and the
secondary real estate market is suffering declines in rental and
capital value.

"As such, we believe the current restrictive lending conditions
will compound the difficulties the borrower faces in refinancing
this loan. In view of these factors, even if the loan is
restructured as a result of the ongoing discussions, we consider
that principal losses are likely," S&P said.

The Mapeley Loan

The Mapeley loan matures in July 2015 and is secured against a
portfolio of 20 secondary office properties located throughout
the U.K. The loan defaulted in October 2011, due to a breach of
the interest coverage ratio (ICR) covenant of 1.15x (the current
ICR is 0.75x), and the servicer subsequently transferred the loan
into special servicing. As per the transaction documents, excess
cash has been held in a reserve account, and the current balance
stands at ś11.7 million.

"We believe this is available to top up any future loan interest
shortfalls, or any potential shortfalls arising from special
servicing fees. In September 2011, British Telecommunications PLC
(BT), which was the sole tenant in Delta Point Croydon (252,000
sq ft), vacated the property upon expiry of its lease, causing
the occupancy rate to fall to 72%, from 98% at closing. BT
represented 27% of the portfolio's gross income, and its
departure has caused the net operating income to fall
substantially to GBP9.7 million at present, from GBP15.9 million
at closing," S&P said.

In February 2012, the special servicer provided information on an
external valuation for the Mapeley loan. This new figure of ś74.7
million gives an LTV ratio of 228%, and represents a 70% market
value decline from the Day 1 valuation figure of ś244.8 million.

"We believe this figure to be particularly low, compared with our
view on the value of the portfolio. While our view of that value
is higher than the most recent valuation figure, we have taken
into consideration that the new external valuation figure may
constrain potential recoveries. If the Mapeley loan is enforced,
material swap break costs would be crystallized. These would rank
senior to payments to the noteholders. We understand from the
special servicer, Hatfield Philips International, that the
presentation of the workout strategy has been postponed to the
end of June, after which a decision is expected on available
workout options," S&P said.

"Although there are three years left to develop and implement a
sustainable strategy for the portfolio, we view the prospects of
full recovery at or before note maturity as limited, given the
factors discussed above," S&P said.

Rating Actions

"We have lowered our ratings on all classes of notes, to reflect
our view of principal recovery expectations. This is a result of
credit deterioration in the Mapeley loan, highlighted by an
updated valuation showing a 66% market value decline from the Day
1 value. We have lowered our rating on the class D notes to 'D
(sf)', to reflect the recent interest shortfall and our opinion
that this class is likely to experience significant principal
losses," S&P said.

DECO 6 - U.K. Large Loan 2 is a U.K. commercial mortgage-backed
securities (CMBS) transaction, which closed in December 2005 with
notes totaling GBP555.2 million. The current outstanding balance
is GBP272.2 million, as of the April 2012 interest payment date.
The notes have a final legal maturity in July 2017.

Potential Effects of Proposed Criteria Changes

"We have taken the rating actions based on our criteria for
rating European CMBS. However, these criteria are under
review.  As highlighted in the Nov. 8 Advance Notice Of Proposed
Criteria Change, our  review may result in changes to the
methodology and assumptions we use when rating European CMBS, and
consequently, it may affect both new and outstanding  ratings on
European CMBS transactions. On June 4, we published a request for
comment (RFC) outlining our proposed criteria changes for CMBS
Global Property Evaluation Methodology. The proposed criteria do
not significantly change Standard & Poor's longstanding approach
to deriving property net cash flow (S&P NCF) and value (S&P
Value). We therefore anticipate limited impact for European
outstanding ratings when the updated CMBS Global Property
Evaluation Methodology criteria are finalized," S&P said.

However, because of its global scope, the proposed CMBS Global
Property Evaluation Methodology does not include certain market-
specific adjustments. An application of these criteria to
European Transactions will therefore be published when we release
our updated rating criteria.  "Until such time that we adopt new
criteria for rating European CMBS, we will continue to rate and
monitor these transactions using our existing criteria," S&P
said.

Ratings List

Class             Rating
            To              From

DECO 6 - U.K. Large Loan 2 PLC
GBP555.119 Million Commercial Mortgage-Backed Fixed-Rate Notes

Ratings Lowered

A2          BB (sf)         A (sf)
B           B (sf)          BB+ (sf)
C           B- (sf)         B- (sf)
D           D (sf)          CCC- (sf)


DECO 8: Fitch Downgrades Rating on Class F Notes to 'Csf'
---------------------------------------------------------
Fitch Ratings has taken various rating actions on DECO 8 - UK
Conduit 2 plc's commercial mortgage-backed notes, as follows:

  -- GBP125.7m class A1 (XS0251885603): affirmed at 'AAAsf';
     Outlook Stable

  -- GBP255.8m class A2 (XS0251886163): downgraded to 'BBsf' from
     'BBB-sf'; Outlook Negative

  -- GBP32.3m class B (XS0251886833): downgraded to 'Bsf' from
     'BBsf'; Outlook Negative

  -- GBP33.9m class C (XS0251887211): downgraded to 'CCCsf' from
     'B+sf'; Recovery Estimate 50%

  -- GBP23.4m class D (XS0251887724): downgraded to 'CCCsf' from
     'Bsf'; Recovery Estimate 0%

  -- GBP60.9m class E (XS0251889696): affirmed at 'CCsf';
      assigned Recovery Estimate 0%

  -- GBP14.2m class F (XS0251890199): downgraded to 'Csf' from
     'CCsf'; assigned Recovery Estimate 0%

  -- GBP2.8m class G (XS0251890868): affirmed at 'Dsf'; assigned
     Recovery Estimate 0%

The rating downgrades reflect a combination of factors: the
viability of the sponsor's business plan backing the Lea Valley
loan (given the secondary quality of many of the assets), the
concerns over the Mapeley loan (mainly due to the limited
information on the sponsor's strategy regarding re-letting) and
also the upcoming loan maturity of the Fairhold loan.

In January 2012, the sponsor of the largest loan in the portfolio
(Lea Valley, accounting for 40% by portfolio loan balance),
purchased the subordinate debt (as part of the extension
restructure).  As a result, any cash previously paid to the
subordinated lender will now be applied to amortization of the
securitized loan, as well as for the build up of a capex fund
(currently at GBP43,852).  The sponsor's business plan aims at
reducing the debt quantum through asset sales (GBP15 million per
year from 2014 through to 2016).  Given the secondary nature of
most of the assets and the absence of investment demand for such
properties, Fitch questions the viability of this plan.

While the asset managers have been successful in maintaining
rental income at their current levels, the portfolio remains
management intensive.  Its rental income profile is rather weak,
with almost 70% subject to possible lease termination before the
end of 2013.

The Mapeley loan (the second largest in the portfolio at 35%) is
secured by 16 office properties located across the UK, typically
in secondary locations and in some cases of below average
quality.  Since closing, the portfolio income has fallen some
24%, primarily due to rent reductions, since vacancy has remained
moderate at 3.7%.  After the 2008 revaluation the primary
servicer (Deutsche Bank AG, London Branch, rated 'CPS2-') agreed
to waive the loan-to-value (LTV) covenant until the July 2012
interest payment date, in return for a full cash sweep.  Thus far
Fitch understands that the cash sweep has amortized the loan by
approximately GBP17m.

While it is not clear whether the servicer will waive the LTV
covenant again at the July interest payment date (IPD), the
agency believes that the loan remains in negative equity, as
indicated by a Fitch LTV of 133%.  An LTV covenant breach may
lead to the transfer of the loan to special servicing, and
therefore some level of external intervention.  Fitch believes
that an active asset management plan is needed by the borrower
between now and loan maturity (2016), with particular focus to
the retention of the largest tenants, which leases are coming up
for expiry in the next two to three years.

Fitch also has concerns over the exit strategy of the Fairhold
loan (12% of the portfolio).  The facility matures in January
2013 and it is hedged with a long dated swap expiring in 2036.
This means that significant breakage costs would be incurred on
failure to refinance at its maturity.  Fitch has considered the
potential impact of breakage costs; however, given the legal
final maturity of the class A2 to G notes is also 2036, ample
time for a loan restructuring is possible, which could limit the
impact of such costs.


POLLY PECK: "Was Not Insolvent," Asil Nadir Claims
--------------------------------------------------
Louisa Peacock at The Telegraph reports that Asil Nadir, the
former fugitive tycoon, claimed Polly Peck would have had a
"tremendous" future had the board not placed it into
administration in October 1990.

"I think it had a tremendous future and this attitude was shared
by the top brokers and investors in this country and worldwide,"
the report quotes Mr. Nadir as saying as he testified for the
first time during his long-running fraud trial.

According to The Telegraph, Mr. Nadir is accused by the Serious
Fraud Office of stealing money from Polly Peck between 1987 and
1990, before funnelling it to Swiss and Bahamian companies. The
SFO accuses Mr. Nadir of 13 counts of theft amounting to GBP34
million, but prosecutors said on the first day of the trial that
the actual amount is closer to GBP150 million.

The relates that more than five months after his trial began, the
71 year-old last week denied all charges and explained that he
fled Britain in 1993 for northern Cyprus because he was a "broken
man" who "could drop dead any minute", with no hope of receiving
a fair trial.

Mr. Nadir was due to stand trial in 1993 but left Britain for
northern Cyprus, returning in August 2010, the report recalls.

The report says the cash is alleged to have been taken from three
accounts held by Polly Peck International (PPI) with the Natwest
and Midland banks between August 1987 and August 1990.  According
to the report, prosecutors claim Mr. Nadir used millions of
pounds he stole to bolster the company's share price and buy
exclusive property.

Asked by his barrister if he left the country because he was
guilty, the report relays, Mr. Nadir said: "That's not true."

According to the report, Mr. Nadir said before any monies were
moved from Polly Peck, the equivalent sums in Turkish lira in
areas where the business operated were banked.  He claimed monies
had been moved to generate better exchange rates, the report
notes.

But the prosecution said his flight from the U.K. for 17 years
was evidence of dishonesty.  When administrators went to Northern
Cyprus to recover assets, they found the money had vanished into
a "black hole", it was alleged.

Polly Peck International (PPI) was a small and barely profitable
United Kingdom textile company which expanded rapidly in the
1980s and became a constituent of the FTSE 100 Index before it
collapsed in 1991.


PRINTEXPRESS IN WHITEHAVEN: Goes Into Liquidation
-------------------------------------------------
News & Star reports that Printexpress in Whitehaven has gone into
liquidation just a month after its highest sales in 27 years.

Despite the record figure in May which saw Printexpress in
Whitehaven score the best sales in its history, it closed and 16
jobs were lost, News & Star relates.

According to the report, managing director John Jenkinson said
the bank had reduced their facilities "at a time when we needed
support."

"Sadly, though it is a sign of these troubled times, our bankers
[Clydesdale], without warning, saw fit to reduce our facilities,"
the report quotes Mr. Jenkinson as saying.  "But this is an all
too common story and many other businesses will confirm that."

Print Express in Whitehaven was a UK-based printing company.


WRIGHT & SMITH: To Enter Into Liquidation on July 20
----------------------------------------------------
Nick Spoors at The Chronicle & Echo reports that Wright & Smith
(Northampton) Ltd has stopped trading, owing money to "quite a
few" small businesses.

Insolvency managers said the company is due to enter liquidation
on July 20 after ceasing business on June 22, 2012, the report
says.

"It is extremely saddening that a company which has traded for
over 50 years has, due to a significant reduction in trade, been
forced to close with the loss of some 16 jobs," Ian Cooke, of
Business Recovery and Insolvency (BRI), said in a statement cited
by The Chronicle & Echo.

Mr. Cooke added: "We can't be specific about how much was owed or
to exactly how many people, but I can say there will be quite a
few local suppliers and subcontractors affected.

"We have written to all the creditors we are aware of, but any
that are concerned about the potential financial impact of this
should seek independent advice or call us to talk things over."

Wright & Smith (Northampton) Ltd is Northamptonshire-based
construction company.



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


* S&P Takes Action on 24 European Synthetic CDO Tranches
--------------------------------------------------------
Standard & Poor's Ratings Services took credit rating actions on
24 European synthetic collateralized debt obligation (CDO)
tranches.

For the full list of rating actions, see http://is.gd/H9O6mR

"The rating actions are part of our regular monthly review of
synthetic CDOs. The actions incorporate, among other things, the
effect of recent rating migration within reference portfolios and
recent credit events on several corporate entities.  Where losses
in a portfolio have already exceeded the available credit
enhancement or where, in our opinion, it is highly likely that
this will occur  once final valuations are known, we have lowered
our ratings to 'CC' because  we consider the likelihood that the
noteholders will not receive their full  principal to be high,
but has not yet happened.  For those transactions where our
September 2009 criteria are not applicable, we have run our
analysis on the appropriate Evaluator models (versions 2.7 and
4.1)," S&P said.

"For the transactions where the September 2009 criteria are
applicable, our analysis has been run on Evaluator version 6.0.
Today's rating actions and the CreditWatch updates follow two
reviews. The first review was of the CreditWatch placements made
on June 25, 2012," S&P said.

"For the second review, we run SROC for scenarios that project
the current portfolio 90 days into the future, assuming no asset
rating migration. For the transactions run on version 6.0, we
have also run the top obligor and industry test SROCs at the
current rating level. The "largest obligor default test" assesses
whether a CDO tranche has sufficient credit enhancement to
withstand specified combinations of underlying asset defaults
based on the ratings on the assets. The "largest industry default
test" assesses whether the CDO tranche rated 'AAA' to 'AA-' has
sufficient credit enhancement to withstand the default of all
obligors in the transaction's largest industry. In addition to
the supplemental tests, and the Monte Carlo default simulation
results, we may consider certain factors such as credit stability
and rating sensitivity to modeling parameters when assigning
ratings to CDO tranches," S&P said.

"We assess these factors case-by-case and may adjust the ratings
to a rating level that is different to that indicated by the
quantitative results alone. For any tranches which the updated
counterparty criteria is applicable to, where our ratings pass
SROC and all the applicable supplemental tests but are  higher
than one rating level above the issuer credit rating of the
lowest-rated counterparty to which they are exposed, we have
kept them on  CreditWatch negative," S&P said.

Ratings List

Basic Energy Services Inc.
Corporate credit rating                 B+/Stable/--

Upgraded; Revised Recovery Rating
                                         To              From
Senior unsecured notes                  B+              B
   Recovery rating                       4               5


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

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

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

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

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

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

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


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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.


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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.


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