TCREUR_Public/120706.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

             Friday, July 6, 2012, Vol. 13, No. 134



BANK OF GEORGIA: Fitch Rates Senior Fixed Rate Note 'BB-'


ADAM OPEL: Peugeot to Take Over Majority of Logistics
ALBA GROUP: S&P Revises Outlook on 'BB-' Rating to Negative
BERNDES GROUP: Files For Insolvency
JUNO LIMITED: Fitch Affirms 'D' Ratings on Two Note Classes
KLOECKNER & CO: Moody's Downgrades CFR to 'Ba3'; Outlook Stable

KLOECKNER HOLDINGS: S&P Assigns 'B-' LT Corporate Credit Rating
PHOENIX PHARMAHANDEL: S&P Lifts Senior Notes Issue Rating to 'BB'
PRAKTIKER AG: De Krassny Backs Management's Restructuring Plan


EIRCOM GROUP: 14,147 ESOP Members to Get EUR8,000
HOUSE OF EUROPE: S&P Lowers Rating on Class A2 Notes to 'B-'
MOCEIR HOLDINGS: Fitch Assigns 'B-' Long-Term IDR; Outlook Neg.
TREASURY HOLDINGS: KBC Bank Demands Repayment of EUR20 Million


BOSTON LUXEMBOURG: Moody's Assigns 'B2' CFR; Outlook Stable
BOSTON LUXEMBOURG: S&P Assigns Prelim. 'B' Corp. Credit Rating
BSN MEDICAL: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
LECTA SA: Moody's Assigns 'B1' Rating to Recent Bond Issuance


NORTH WESTERLY: S&P Raises Ratings on Two Note Classes to 'CCC+'


RENEWABLE ENERGY: Agrees Bank Facility Under Restructuring Plan


PBG SA: New CEO Needs More Time to Prepare Strategy


TRANSELECTRICA: Moody's Cuts LT Corporate Family Rating to 'Ba1'


* LENINGRAD: Fitch Upgrades Long-Term Currency Ratings to 'BB+'


BANKIA SA: Rodrigo Rato Among Officials to Face Fraud Probe
BBVA RMBS: S&P Downgrades Rating on Class C Notes to 'B'
PYMES SANTANDER: S&P Assigns Prelim. 'CC' Rating to Class C Notes
* SPAIN: Finland Disputes Seniority Clause in Bank Bailout

U N I T E D   K I N G D O M

BATTERSEA POWER: Sold to SP Setia-Led Consortium for GBP400-Mil.
DUNEDIN INDEPENDENT: Didier Slama Buys Assets Out of Liquidation
JULIAN GRAVES: In Administration; 363 Jobs at Risk
* UK: Treasury Mulls Sanctions for Directors of Failed Banks


* BOOK REVIEW: The Health Care Marketplace



BANK OF GEORGIA: Fitch Rates Senior Fixed Rate Note 'BB-'
Fitch Ratings has assigned JSC Bank of Georgia's (BoG) senior
fixed rate note issue a final rating of 'BB-'.  This follows the
receipt of documents conforming materially to information already
received, on the basis of which Fitch assigned a 'BB-(exp)'
Expected rating on May 16, 2012.

The US$250 million five-year 7.750pc senior unsecured eurobonds
have been issued directly by BoG and listed in the UK. Covenants
in the terms and conditions include a negative pledge in respect
of the subordination of holders of the bonds to 'new' creditors,
as well as clauses relating, among other things, to: business
continuity; mergers; the disposal of assets; changes of business;
transactions with affiliates; the payment of taxes; dividend
payments; indebtedness; and compliance with National Bank of
Georgia (NBG) prudential supervision ratios.  In addition, BoG is
required to maintain Basel I Tier 1 and total capital ratios of
8% and 12%, respectively.

The ratings of the senior notes are driven by BoG's Long-term
Issuer Default Rating (IDR) of 'BB-'/Stable.

BoG is the largest bank in Georgia with market shares of between
35% and 37% of total assets, loans and deposits as at end-2011,
according to NBG data.  The bank's strategic businesses include
retail and corporate banking and wealth management.  In addition,
BoG Group provides insurance and healthcare, affordable housing
and brokerage services throughout Georgia.  In February 2012 Bank
of Georgia Holdings plc, the 98.35% owner of BoG, listed on the
London Stock Exchange.


ADAM OPEL: Peugeot to Take Over Majority of Logistics
John Reed at The Financial Times reports that PSA Peugeot Citroen
said it would deliver cars, parts and materials for General
Motors in Europe, marking the first joint undertaking of the two
carmakers' four-month-old strategic alliance.

According to the FT, GM and Peugeot said on Monday that Peugeot's
Gefco unit will take over the majority of the US carmaker's
logistics on the continent -- including Russia -- for GM's
Opel/Vauxhall, Chevrolet and Cadillac brands.

GM and Peugeot, both of which are losing money in Europe, in
February agreed to join forces in a global alliance that they
said would generate each company US$1 billion in annual cost-
saving synergies within about five years, the FT recounts.

The FT relates that the companies said Gefco would deliver
materials and components to GM's manufacturing plants and
finished cars to its dealerships, and transport spare parts to
the Detroit carmaker's distribution centers in Europe.

The FT notes that Steve Girsky, GM's vice-chairman and chairman
of Opel's supervisory board, said on Monday that the logistics
agreement marked "the first step in realizing benefits from the
larger alliance with PSA".

GM, the FT says, is also looking to cut costs and revamp its
product line in Europe, where it lost US$747 million before tax
last year.  Last week, Opel's board approved a new five-year
business plan aimed at restoring the unit to profitability in a
declining market, the FT discloses.

Adam Opel GmbH -- is General Motors
Corp.'s German wholly owned subsidiary.  Opel started making cars
in 1899.  Opel makes passenger cars (including the Astra, Corsa,
and Vectra) and light commercial vehicles (Combo and Movano).
Its high-performance VXR range includes souped-up versions of
Opel models like the Meriva minivan, the Corsa hatchback, and the
Astra sports compact.  Opel is GM's largest subsidiary outside
North America.

ALBA GROUP: S&P Revises Outlook on 'BB-' Rating to Negative
Standard & Poor's Ratings Services revised its outlook on
Germany-based waste management operator ALBA Group PLC & Co. KG
(ALBA Group) to negative from stable.

"At the same time, we affirmed our long-term corporate credit on
ALBA Group at 'BB-'. In addition, we affirmed our issue rating on
ALBA Group's EUR203 million unsecured notes due in 2018 at 'B'.
The recovery rating on the unsecured notes is unchanged at '6',
indicating our expectation of negligible (0%-10%) recovery
prospects in the event of a payment default," S&P said.

"The outlook revision reflects our view of refinancing risk
associated with the maturity of ALBA Group's senior bank facility
in December 2013. To reflect the likelihood that, absent a
refinancing, uses of liquidity will exceed sources in the
financial year ending Dec. 31, 2013, we have revised our
assessment of ALBA Group's liquidity to "less than adequate" from
"adequate" previously," S&P said.

As of March 31, 2012, ALBA Group had approximately $287 million
outstanding under its senior bank facility, which comprises a
term loan A, an acquisition facility, and a revolving credit
facility (RCF).

"There is a possibility of a downgrade should ALBA Group not
refinance its  senior bank facility at least 12 months before the
scheduled maturity date of December 2013. If ALBA Group does not
address the refinancing risk in a timely manner, we could
reassess ALBA Group's liquidity as "weak," in line with our
criteria," S&P said.

Such a reassessment could result in us lowering the long-term
corporate credit rating on ALBA Group to 'B-'.

"We note that ALBA Group has initiated the refinancing process
and expects to complete it by October this year. If the group
completes the refinancing by the end of the current financial
year, ending Dec. 31, 2012, we will review the
outlook.  Weakening macroeconomic conditions in Europe have
resulted in a decline in the  general demand for, and prices of,
scrap paper, plastics, wood, and nonferrous  metals," S&P said.

"Furthermore, we believe that ALBA Group's decision to withdraw
from an unprofitable contract with a large customer in its
service segment will weaken revenues. On the other hand, we
anticipate that revenues will benefit from the increasingly
global reach of its scrap and metals segment, and also from new
industrial customers in its waste operations segment," S&P

"Nevertheless, in our base-case operating scenario we estimate
that the group's revenues will decline by low single digits in
2012.  We also forecast that ALBA Group's reported EBITDA will
decline by mid-single digits for financial 2012, compared with
EUR182 million in financial 2011 (excluding EUR5.1 million of
profit from a customer contract cancellation). Our forecast is
largely influenced by the uncertain trading environment in
Western Europe, particularly for the scrap and metals segment,"
S&P said.

"Despite the decline in ALBA Group's profitability, we forecast
that it will generate stable funds from operations (FFO) of about
EUR100 million in financial 2012, and be able to maintain
Standard & Poor's-adjusted FFO to debt of about 15%.  There is
also a possibility of a downgrade if deterioration in the
macroeconomic and financial environment in Western Europe
significantly weakens ALBA Group's operating performance beyond
our base-case forecasts," S&P said.

Such weakening would entail a sustained deterioration in the
group's credit metrics, including FFO to debt of less than 15%.

"We could revise the outlook to stable if ALBA Group completes
the refinancing of its senior bank facilities, and if its
operating performance does not deteriorate significantly beyond
our base-case projections," S&P said.

BERNDES GROUP: Files For Insolvency
RTTNews reports that CFC Industriebeteiligungen AG announced that
substantive entities of its investment Berndes Group have filed
for insolvency on July 2.

RTTNews relates that the involved entities are Berndes
Beteiligungs GmbH, Heinrich Berndes Haushaltstechnik GmbH & Co.
KG and Heinrich Berndes Haushaltstechnik Verwaltungs GmbH.

According to the report, CFC AG had initiated significant
impairments so that the filing does not result in further losses.
In the past months, CFC has also provided selected suppliers of
its investment Berndes with guarantees.

RTTNews states that the company's CEO has been in constructive
talks with major creditors of CFC, where the funding is related
to the investment Berndes.  These talks, which currently proceed
in a very positive direction, are intended both to allow Berndes
a continuation of business, and also to ensure the going concern
for CFC AG, the report adds.

JUNO LIMITED: Fitch Affirms 'D' Ratings on Two Note Classes
Fitch Ratings has taken various rating actions on Juno (Eclipse
2007-2) Limited due 2022 as follows:

  -- EUR259.6m Class A (XS0299976323): upgraded to 'AAsf' from
     'Asf'; Outlook Stable

  -- EUR68.3m Class B (XS0299976752): upgraded to 'BBBsf' from
     'BBsf'; Outlook Stable

  -- EUR73.3m Class C (XS0299976836): downgraded to 'Csf' from
     'CCsf'; Recovery Estimate 50%

  -- EUR16.8m Class D (XS0299977057): affirmed at 'Dsf'; Recovery
     Estimate 0%

  -- EUR0.0m Class E (XS0299977131): affirmed at 'Dsf'; Recovery
     Estimate 0%

The full repayment of the EUR218.5 million Keops loan and the
expected principal allocation following the resolution of the
EUR122 million Neumarkt loan, both applied sequentially against
the outstanding notes, form the basis of the upgrade to classes A
and B, while the soon-to-be allocated losses resulting from the
work out of the Neumarkt and Den Tir loans provide for the
downgrade of the class C notes to 'Csf', given that a default on
this tranche seems unavoidable.

Enforcement proceeds on the Keops loan, which was secured by 147
Swedish assets, commenced in April 2011 via a well-publicized
auction process.  With its high leverage (the A-note loan to
value (LTV) was reported at 95%), and an exit strategy which
involved multiple purchasers, Fitch estimated a loss on the
senior loan, mainly deriving from workout costs.  However, net
sale proceeds were only marginally below the reported market
value and resulted in full repayment of the loan.  The sequential
allocation of proceeds improved the credit enhancement of the
class A and B notes, even after deducting the estimated losses
from Neumarkt and Den Tir loans.  Fitch also expected a small
loss on the EUR15.5 million Monaco loans, which instead were
fully repaid in Q411.

As reported in May 2012, the collateral supporting the Junior and
Senior Den Tir loans (both of which formed part of the
securitized A-note) was liquidated, realizing in net sale
proceeds of EUR5.96 million against a combined loan balance of
EUR30.45 million.  The loss will therefore write the entire class
D off and partially the class C.  The loss expected on the
Neumarkt loan (albeit smaller than the EUR16.2 million initially
reported, due to overcharging of defaulted interest) will also
result in partial write-off of the Class C notes.  Fitch
understands that additional retained funds, not originally
accounted for, may also increase recoveries on this loan,
although this may further delay the final determination of

Of the 8 remaining loans, the EUR82 million Obelisco portfolio is
the largest.  The facility, expiring in 2015, is supported by
nine office properties located in peripheral areas surrounding
Rome and Milan.  The collateral was revalued in December 2011 at
EUR211 million, resulting in a reported LTV ratio of 39% and a
modest market value decline since closing; whilst Fitch estimates
an LTV of approximately 50%, the loan is expected to repay in

The EUR70 million Petersbogen loan, secured by a shopping centre
and entertainment complex in Leipzig, Germany, has a senior and
whole loan LTV of 78% and 95%, respectively.  Fitch estimates the
senior LTV to be at 90% and therefore expects some refinancing
difficulties at its maturity in November 2013.  In addition, the
smaller Monheim, Le Croissant and Prince Boudewijn loans are also
candidates for losses, given their Fitch LTV is in the region of
100%.  However, the small size of these facilities and the credit
enhancement provided by the class C notes offer protection to the
senior tranches.

KLOECKNER & CO: Moody's Downgrades CFR to 'Ba3'; Outlook Stable
Moody's Investors Service downgraded the corporate family (CFR)
and probability of default ratings (PDR) of Kloeckner & Co SE to
Ba3 from Ba2. The downgrade reflects the persistently low
profitability of the company, the deteriorating outlook for steel
and metals over the next year, especially in Europe, and the
company's high level of gross debt, which has remained elevated
since the mid-2011 closing of the Macsteel and Frefer
acquisitions. The rating outlook remains stable, reflective of
the company's strong liquidity and the actions it is taking to
adapt its European business to subdued market conditions.

Ratings Rationale

Moody's expects Kloeckner will have net losses and an
EBIT/interest ratio below 1x every quarter of 2012. Price and
demand pressures will persist and make it difficult for the
company to expand its EBIT margin, which has been below 2% for
the last four quarters. Moody's expects metal demand to decline
in Europe, which represents approximately 67% of Kloeckner's
sales. In North America, market conditions and the company's
profit margins should be relatively better but are nevertheless
expected to be negatively impacted by economic problems in
Europe, excess steelmaking capacity, and difficulty in raising
prices. Challenges will persist in Brazil due to intense
competition and imports of steel, reflecting a fundamental change
in the Brazilian market.

In response to these conditions, Moody's expects Kloeckner to
continue to reduce headcount and rationalize its European
footprint. It has already announced that it will exit from
Eastern Europe where market conditions are expected to remain
weak and/or the company's presence is relatively minor. These
steps, while positive in the medium term, may lead to one-time
charges. With mill-owned competitors in Europe struggling to keep
mills more fully utilized and metal prices languishing, Moody's
expects Kloeckner's consolidated as-reported EBITDA to be
approximately EUR200 million in 2012, excluding any unusual
charges. This is similar to 2011 when the results included
Macsteel and Frefer for only the second half of the year.

At the same time, Moody's expects Kloeckner to generate cash from
the release of working capital that accompanies a drop in
turnover. This will bolster its liquidity, which is strong and
helps support the Ba3 CFR. At March 31, 2012, Kloeckner had cash
of EUR937 million and unused committed credit facility
availability of about EUR1 billion under various multi-year
facilities. It will use cash to repay EUR325 million of
convertible bonds maturing in July 2012.

At March 31, 2012, Kloeckner had adjusted debt of EUR2,144
million and its ratio of gross debt to EBITDA was a very high
9.1x. This includes Moody's standard adjustments, which add 2.2
turns of leverage. Pro forma for the repayment of the convertible
bond, gross adjusted leverage will drop to 7.8x. Kloeckner's debt
looks more appropriate for the Ba3 rating when compared to its
net working capital, which was EUR1,655 million at 31 March, or
when viewed net of cash, which makes leverage 5.1x EBITDA for the
LTM period ended 31 March 2012.

Additionally, Kloeckner's Ba3 CFR is supported by the company's
strong market position as a leading independent distributor of
metals in Europe and the Americas, its good liquidity, and the
countercyclical nature of its working capital investment, which
generates strong cash flow during business downturns.

The stable outlook reflects Kloeckner's good liquidity and the
resilience of its distributor business model, which in a downturn
should enable it to avoid large operating losses and benefit from
cash stemming from reduced working capital. The stable outlook
considers the potential for charges and moderately sized write-
downs if the market doesn't strengthen, but also the maintenance
of strong liquidity and ample covenant headroom on financial
covenants. The company's liquidity profile and its path to
restoring its EBIT or EBITDA margins will determine the rating
over the next year. A further downgrade could occur if it appears
that the company's EBIT margin will remain less than 2%, retained
cash flow to net debt will be less than 15%, or if liquidity were
to significantly deteriorate. There is no upward rating pressure
at this time.

The principal methodology used in rating Kloeckner & Co. SE was
the Global Distribution & Supply Chain Services Industry
Methodology published in November 2011.

Kloeckner is a leading mill-independent multimetal distributor
with strong market positions in Europe and the Americas. The
company operates more than 290 warehouses in 20 countries. In
2011, Kloeckner had revenues of EUR7.1 billion and EBITDA of
EUR217 million.

KLOECKNER HOLDINGS: S&P Assigns 'B-' LT Corporate Credit Rating
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to German packaging manufacturer
Kloeckner Holdings S.C.A., the ultimate holding company of
Kloeckner Pentaplast.

"At the same time, we assigned our issue rating of 'B' to
Kloeckner Pentaplast's US$500 million senior secured credit
facilities--comprising a US$435 million term loan B and a US$65
million revolving credit facility (RCF). In addition, we assigned
our issue rating of 'CCC' to the group's proposed EUR255 million
second-lien notes.  Finally, we withdrew our 'SD' rating on
Kleopatra Lux 1 S.a.r.l. following the debt restructuring%," S&P

The assignment of ratings follows Kloeckner Pentaplast's
implementation of a debt restructuring led by investment firm
Strategic Value Partners and the junior lender group. The ratings
on Kloeckner Pentaplast reflect our view of the group's "weak"
business risk profile and "highly leveraged" financial risk
profile. Kloeckner Pentaplast's new capital structure includes: A
US$435 million term loan (about EUR342 million), a EUR255 million
bridge loan, and an undrawn US$65 million RCF (about EUR51
million). EUR238 million of private equity certificates (PECs),
which we treat as debt under our criteria. EUR21 thousand of
tracking preferred equity certificates (TPECs), which could
increase significantly in value.

Standard & Poor's adjustments of less than EUR100 million of debt
relating to trade receivables factoring facilities,
postretirement pension obligations, and operating leases. Other
debt of about EUR27 million.

"About EUR43 million of cash post the debt restructuring,
although we assume that this sum is necessary for ongoing
operations, and therefore make no adjustment to debt for surplus
cash. Following the debt restructuring, Kloeckner Pentaplast has
total pro forma Standard & Poor's-adjusted debt of about EUR960
million. In the financial year to Sept. 30, 2012, we forecast pro
forma adjusted debt to EBITDA of 7.3x (including PECs) %," S&P

"Market conditions remain difficult for Kloeckner Pentaplast, due
to exposure to volatile input costs -- specifically, for
polyethylene terephthalate (PET) -- and energy costs, and the
weak macroeconomic outlook. That said, we anticipate some
improvement in Kloeckner Pentaplast's Standard & Poor's-adjusted
EBITDA margin for the financial year to Sept. 30, 2012, to more
than 11%, now that major operational restructuring activities are
complete%," S&P said.

"Consequently, although we forecast that Kloeckner Pentaplast's
free operating cash flow (FOCF) will remain negative for the
financial year to Sept. 30, 2012, we forecast that the group will
start generating positive FOCF in subsequent years, because we do
not expect any further significant  restructuring costs%," S&P

"In our view, Kloeckner Pentaplast's credit metrics will not
weaken materially beyond pro forma levels following the debt
restructuring, despite tough economic conditions in the group's
main markets. We assume that the group's capital structure will
remain highly leveraged. We forecast that adjusted debt to EBITDA
will remain substantially more than 5x (including the PECs) for
the foreseeable future%," S&P said.

Downward rating pressure could be triggered by a weakening in
Kloeckner Pentaplast's operating performance, or if the group
fails to deleverage in line with tightening covenant test levels.

"We could consider taking a positive rating action if the group
improves FOCF generation and deleverages at a faster pace than we
currently anticipate%," S&P said.

PHOENIX PHARMAHANDEL: S&P Lifts Senior Notes Issue Rating to 'BB'
Standard & Poor's Ratings Services has assigned its 'BB' issue
rating to the EUR1.35 billion  syndicated senior unsecured credit
facilities recently borrowed by Germany-based pharmaceuticals
wholesaler PHOENIX Pharmahandel GmbH & Co. KG (PHOENIX;

The issue rating is in line with the corporate credit rating on

"We also assigned a recovery rating of '4' to the syndicated
facilities, indicating our expectation of average (30%-50%)
recovery in the event of payment default. At the same time, we
raised to 'BB' from 'B+' our issue rating on the EUR506 million
9.625% senior unsecured notes (the notes) due 2014. We revised
upward our recovery rating on this instrument to '4' from '6',
indicating our expectation of average (30%-50%) recovery in an
event of default," S&P said.

"We also withdrew the recovery and issue ratings on the previous
syndicated  senior secured credit facilities, including a $460
million term loan A1 due 2013, a EUR200 million term loan A2 due
2015 and a EUR825 million revolving credit  facility (RCF) due
2013 (see ratings list below). We understand that these
facilities have been refinanced with the proceeds of the new
syndicated facilities and have now been redeemed,"" S&P said.

Recovery Analysis

"We revised upward the recovery ratings on the senior notes
because we assume that they would rank equally with the new
senior unsecured facilities. Although we believe note holders
remain exposed to becoming subordinated again in the future due
to the presence of maintenance covenants in the bank loan
documentation, we note that the notes mature in July 2014 and
that the maintenance covenants would unlikely be breached by this
date," S&P said.

The new syndicated facilities, comprising a EUR300 million term
loan A due 2016 and a EUR1,050 million RCF due 2017, are
unsecured obligations of PHOENIX and can be borrowed by PHOENIX's
subsidiaries. According to the documentation, the facilities are
guaranteed by group subsidiaries that account for at least 75% of
PHOENIX's consolidated revenues and EBITDA.

The syndicated facilities benefit from the same guarantors than
the senior notes'.

"For the purpose of our recovery analysis, we therefore consider
the new facilities as ranking equally with the notes, thereby
enhancing the noteholders' ranking and recovery prospects. We
consequently revised our recovery rating on the senior notes
upward to '4' from '6' and our issue rating to 'BB' from
'B+'. Although it isn't our central scenario, we believe
noteholders could once again become subordinated owing to the
presence of maintenance covenants in the bank loan
documentation," S&P said.

"In the event of a breach, these could allow bank creditors the
opportunity to negotiate a better position as a condition of
their ongoing support. In particular, we believe the negative
pledge provision in the notes documentation could allow security
to be granted to the new unsecured bank facilities at a future
date," S&P said.

"This is because we understand the new bank facility is defined
as "permitted refinancing indebtedness" in the notes
documentation. We note that the notes documentation is unclear as
to whether security can be granted to the new bank facility at a
later date. Still, the risk to noteholders is offset by our view
that the group will not likely breach its maintenance covenants
before the notes mature in July 2014," S&P said.

The new syndicated facilities benefit from maintenance financial
covenants, including: Maximum net debt-to-EBITDA ratio, tested
quarterly on a rolling 12-month basis, down from 4.5x on July 31,
2012, to 3.25x from April 30, 2016, onward; and Minimum EBITDA-
to-net finance charges ratio, tested quarterly on a rolling 12-
month basis, up from 2.75x on July 31, 2012, to 3.0x from July
31, 2015, onward. The syndicated facilities agreement also
includes: A cross-default provision; A margin ratchet, based on
the net debt-to-EBITDA ratio; Restrictions on additional liens,
asset disposals, mergers, and acquisitions, among others; and A
provision whereby the guarantors would cease to guarantee the
syndicated facilities if net debt to EBITDA falls below 2.5x for
two consecutive quarters, or if the group's unsecured debt was
rated 'BBB-' or above by at least two rating agencies.

"To calculate recoveries, we simulate a default scenario. Our
hypothetical default scenario assumes continued price regulation,
resulting in squeezed EBITDA margins," S&P said.

"In our view, any dramatic shift in regulatory requirements could
have an adverse effect on PHOENIX, which operates in a low-margin
business. Under this scenario, we project a default in the fiscal
year ending Jan. 31, 2017--previously 2016--, with EBITDA
declining to about EUR330 million (excluding the Italian
business). Given PHOENIX's stable business fundamentals, we
consider that the group would likely be reorganized as a going
concern following a default. Using a combination of discounted
cash flow and market multiple approaches and assuming a stressed
multiple of 6.5x, we estimate that the stressed enterprise value
would be approximately EUR2,160 million," S&P said.

"We then deduct priority liabilities, totaling about EUR1,370
billion and comprising enforcements costs, a part of the unfunded
pension deficit, bilateral lines, and a part of the group's
factoring facility.  This leaves about EUR790 million of value
for the syndicated lenders. Assuming about EUR1.9 billion of
senior unsecured debt outstanding at default, we anticipate
recovery in the 30%-50% range, hence our recovery rating of '4'
on the new facilities and the notes," S&P said.

Ratings List

New Rating
                                     To                From
PHOENIX Pharmahandel GmbH & Co. KG
Senior Unsecured Credit Facilities  BB                NR
   Recovery Rating                   4                 NR


Senior Unsecured Notes*             BB                B+
   Recovery Rating                   4                 6

*Guaranteed by PHOENIX Pharmahandel GmbH & Co. KG.


PHOENIX Pharmahandel GmbH & Co. KG
Senior Secured Credit Facilities    NR                BB
   Recovery Rating                   NR                4

PRAKTIKER AG: De Krassny Backs Management's Restructuring Plan
Jan Schwartz at Reuters reports that Praktiker AG and its major
investors struck a compromise late on Wednesday in a last-ditch
attempt to stave off bankruptcy.

According to Reuters, fund manager Isabella de Krassny, whose
backers held a majority at Praktiker's annual shareholders'
meeting on Wednesday, said she was now backing management's
restructuring plan after insisting earlier for approval of her
own plan.

In return, Praktiker bowed to shareholders' demands to replace
two supervisory board members with candidates backed by Ms. de
Krassny, Reuters notes.

During the shareholders meeting, de Krassny had stepped up her
opposition to the company's rescue plan, to which management had
said there was no alternative, Reuters recounts.

Ms. De Krassny, as cited by Reuters,  said the investors in her
camp, which include big shareholders Maseltov and Semper
Constantia, have the management experience to lead the company
and access to at least EUR55 million (US$69.3 million) in

Praktiker had been seeking shareholder permission to raise up to
EUR60 million in a capital increase and accept an EUR85 million
loan from U.S. investor Anchorage, Reuters says.  In exchange,
Anchorage would gain options for 15% of Praktiker's stock, a plan
that has angered shareholders, Reuters states.

According to Reuters, before the meeting, Praktiker, in a letter
to shareholders posted on its Web site, said there was no other
investor in sight and that the financing concept was fair. "The
company otherwise faces immediate bankruptcy", it warned.

The group was also planning to agree bank loans of up to EUR95
million, Reuters discloses.

Praktiker, which operates stores under the Praktiker and Max Bahr
brands, got into trouble after scrapping a popular "20% off
everything" ploy last year, Reuters recounts.

Praktiker AG is a German DIY chain.


EIRCOM GROUP: 14,147 ESOP Members to Get EUR8,000
Vincent Ryan at Irish Examiner reports that the 14,147 members of
the Eircom employee share ownership plan (ESOP) will be issued
with a check for up to EUR8,000 on Wednesday.

ESOP members who received the maximum allocation of shares will
have received EUR95,000 tax-free over the life of the scheme,
which is now being wound up, Irish Examiner discloses.

The payments made to the 14,147 members are as a result of the
ESOP distributing the bulk of its Emerald Communications (Cayman)
preference shares, according to Irish Examiner.  This will mean
EUR85 million will be distributed to participants, Irish Examiner

The ESOP had been due to be wound up by the end of 2014 in an
agreement with the Revenue Commissioners, Irish Examiner notes.

The examinership process accelerated the winding up of the plan,
Irish Examiner says.

As reported by the Troubled Company Reporter-Europe on June 13,
2012, The Irish Times reports that Eircom Group formally exited
the State's biggest examinership, with the creation of a new
holding company owned entirely by the group's lenders and
carrying 40% less debt.  Singapore Technologies Telemedia (STT)
and the Employee Share Ownership Trust (Esot) are no longer
shareholders under the new group structure, which sees the
establishment of a new entity, Eircom Holdings (Ireland) Limited,
the Irish Times disclosed.  Eircom Group sought court protection
from its creditors in a process known as examinership in March,
the Irish Times recounted.  According to the Irish Times, it
received court approval on May 22 for a debt restructuring to cut
the group's gross debt from EUR4.1 billion to EUR2.3 billion,
after Mr. Justice Peter Kelly said he was satisfied the scheme
advocated by examiner Michael McAteer was "endorsed by most of
its creditors".

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

HOUSE OF EUROPE: S&P Lowers Rating on Class A2 Notes to 'B-'
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on House of Europe
Funding V PLC's class A1 and A2 notes, affirmed our ratings on
the class A3-a, A3-b, B, C, D, E1, and E2 notes," S&P said.

"At the same time, we have withdrawn our rating on the class A1
DDN notes, which have been consolidated with the class A1
notes.  House of Europe Funding V is a cash flow collateralized
debt obligation (CDO) of mainly European asset-backed securities
transaction managed by Collineo Asset Management GmbH.

"On March 19, 2012, we placed on CreditWatch negative our ratings
on the class A1 DDN, A1, and A2 notes in this transaction all of
our ratings in this transaction, following our Feb. 21, 2012
update of our criteria for CDOs of  pooled structured finance
assets%," S&P said.

The rating actions resolve these CreditWatch negative placements.

"They follow the application of our 2012 criteria for CDOs of
pooled structured  finance assets, and our assessment of the
negative ratings migration of portfolio assets that we consider
to be performing (rated 'CCC-' or above) since our previous
review in March 2011%," S&P said.

"None of the ratings was affected by either the largest obligor
default test or the largest industry default test--two
supplemental stress tests in our criteria for CDOs of pooled
structured finance assets%," S&P said.

"Based on our updated methodology and assumptions outlined in
these criteria, we have subjected the transaction's capital
structure to a cash flow analysis, to determine the break-even
default rate (BDR) for each rated class of notes at each rating
level. We have also conducted an updated credit analysis, to
determine the scenario default rate (SDR) at each rating level%,"
S&P said.

"The application of our updated methodology and assumptions has
caused the scenario default rates at each rating level to
increase significantly, and the assumed weighted-average recovery
rates at each rating level to decrease significantly.  The
reduction in BDRs and the rise in SDRs indicate to us that the
current credit enhancement levels available to the class A1 notes
and the class A2 notes are no longer commensurate with our
previous ratings. As such, we have lowered and removed from
CreditWatch negative our ratings on these classes of notes%," S&P

"We have affirmed our 'CCC- (sf)' ratings on the class A3-a, A3-
b, and B notes, and our 'CC (sf)' ratings on the class C, D, E1,
and E2 notes, to reflect our  view that these notes remain
vulnerable or highly vulnerable to nonpayment%," S&P said.

Ratings List

Class                     Rating
                 To                  From

House of Europe Funding V PLC
EUR1 Billion Fixed- and Floating-Rate Notes and Annuity Notes

Ratings Lowered and Removed From CreditWatch Negative

A1[1]            BB+ (sf)            AA+ (sf)/Watch Neg
A2               B- (sf)             A- (sf)/Watch Neg

Ratings Affirmed

A3a              CCC- (sf)
A3b              CCC- (sf)
B                CCC- (sf)
C                CC (sf)
D                CC (sf)
E1               CC (sf)
E2               CC (sf)

Rating Withdrawn

A1 DDN[1] NR                   AA+ (sf)/Watch Neg

MOCEIR HOLDINGS: Fitch Assigns 'B-' Long-Term IDR; Outlook Neg.
Fitch Ratings has assigned Moceir Holdings (Ireland) Ltd (eircom)
a Long-term Issuer Default Rating (IDR) of 'B-' with a Negative
Outlook.  Fitch has also assigned instrument and Recovery Ratings
to the company's senior secured bank debt of 'B/RR3'.

The IDR takes into account the substantially reduced debt that
eircom exited Examinership with, in early June 2012, the
company's position as the country's incumbent telecom operator,
sizeable but declining market share and negative free cash flow

The Negative Outlook reflects the considerable operating
challenges the company faces in turning around the fixed line
business.  Its weak competitive position relative to the cable
operator UPC may lead to further line losses beyond management's
expectations.  This could potentially lead to further covenant
breaches and if not reversed, further restructuring.  A
stabilization in fixed line KPIs (key performance indicators)
would be necessary in order for Fitch to consider stabilizing the

In a country with 1.6 million homes, eircom currently enjoys an
approximate 56% share of fixed line revenues (at Q112 according
to Irish telecoms regulator, ComReg), a share that has fallen by
just over 10 percentage points in two years.  While this remains
a strong incumbent position, the pace at which eircom has been
losing fixed accesses and more notably broadband customers, is a

Fitch views the business to be most challenged in the urban or
metropolitan residential market.  UPC has built out a total of
720,000 (two way enabled) homes there and is enjoying
considerable success developing its triple-play subscriber base.
Its broadband customer base has been growing at an annual rate of
more than 30%, and the company has been signing up telephony
customers at more than twice that rate.  With cable having
upgraded its network to DOCSIS 3.0, a compression technology
enabling broadband speeds of more than 100MB, and not being
subject to the regulatory imposed constraints of universal
service, UPC has been able to focus investment and commercial
activity in the most obviously profitable parts of the market.

Against this background Fitch considers eircom's decision to
invest approximately EUR400 million in building out fibre access,
over the next two years, to be necessary in the face of UPC's
commercial momentum.  The investment will cause eircom's free
cash flow to remain negative over this period, will increase
financial leverage, and comes with considerable execution risk.
While the company enjoys an established challenger position in
the mobile market with just under 20% share of mobile customers,
mobile contribution is relatively small.  Ireland is an
increasingly crowded market, dominated by two well-funded
incumbents, Vodafone and O2.  Competitive pressures are likely to
remain, while 4G spectrum acquisition and investment will impact
cash flows in the mobile business at least through calendar 2013.

Fitch's rating case envisages the business releveraging to a peak
of around 5.3x in FY14 on a net debt to EBITDA basis (equivalent
to 6.6x FFO net adjusted leverage).  Metrics that were trending
by more than 0.5x - 1.0x outside these levels would put
considerable downward pressure on the rating.  Operationally it
will be important that eircom slows the pace of fixed access
losses and regains momentum in its residential broadband base. It
is likely, however, to take 18 months to two years, at a minimum,
to show that the fibre investment is working.  While the absence
of any meaningful debt maturity over this period is helpful,
material divergence to planned performance is likely to lead to a

The 'B/RR3' ratings assigned to the secured facility (term loan
B) reflect the above average recoveries envisaged in the event of
a default and take into account the secured nature of the
facility.  However, Fitch notes the absence of other creditor
classes, who might otherwise absorb losses, while the loan
agreement provides for the existence of additional liabilities
(an RCF and hedging liabilities) on a super senior basis.  Fitch
believes the emergence of such liabilities is likely and will
introduce a layer of debt which is contractually more senior than
the term loan B.  This may in turn affect prospective recoveries
and lead to a pressure on the instrument rating.

TREASURY HOLDINGS: KBC Bank Demands Repayment of EUR20 Million
According to The Irish Times' Ciaran Hancock and Mary Carolan,
the Commercial Court heard on Tuesday that Treasury Holdings and
its owners Richard Barrett and Johnny Ronan face further
financial demands from lenders and the National Asset Management

KBC Bank Ireland served notice on June 29 that it would seek an
order to wind up Treasury unless EUR20 million is paid within 21
days under a guarantee of loans to various Treasury companies,
the Irish Times relates.  KBC is owed EUR75 million by Treasury,
the Irish Times discloses.

In addition, NAMA has issued repayment demands to Mr. Barrett and
Mr. Ronan for EUR3 million each arising from guarantees of a
EUR13.5 million loan to Treasury, the Irish Times notes.

These details emerged on the first day of a hearing into
Treasury's bid to overturn NAMA's decision to call in about EUR1
billion in loans in January of this year, according to the Irish

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


BOSTON LUXEMBOURG: Moody's Assigns 'B2' CFR; Outlook Stable
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and probability-of-default rating (PDR) to Boston
Luxembourg II S.a.r.l. (BLS), the holding company of BSN Medical
(BSN). The holding company is beneficially owned by private
equity investor EQT. Concurrently, Moody's has assigned a
provisional (P) Ba3 rating to the company's proposed EUR740
million worth of senior secured bank term loans and EUR125
million of senior secured undrawn lines with respective
maturities of 7 and 6.5 years. The rating outlook is stable. This
is the first time that Moody's has rated BLS and BSN.

The ratings are contingent upon BLS's success in closing its
proposed acquisition of BSN Medical ("BSN", "the company"), which
is subject to regulatory approval. BLS does not have any other
business activities other than those carried out by BSN.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect the rating agency's credit
opinion regarding the transaction only. Upon a conclusive review
of the final documentation, Moody's will endeavor to assign
definitive ratings to the instruments mentioned above. A
definitive rating may differ from a provisional rating.

Ratings Rationale

"The B2 CFR reflects Moody's expectation that, following the
closing of the transaction, the company will exhibit a high
leverage, as exemplified by Moody's adjusted debt/EBITDA ratio of
approximately 7.0x based on 2011 EBITDA of EUR162 million" says
Alex Verbov, Vice President and Moody's lead analyst for BSN.
Whereas current LTM trading figures are somewhat higher
benefiting from organic growth (per last-twelve-months
(LTM)leverage is estimated at around 6.9x), they also reflect the
positive impact from recent EUR depreciation, which may not be

While the global markets for wound care management, compression
therapy and orthopaedics have historically shown attractive
growth rates, weaker economic conditions worldwide create several
challenges for players in the medical products and device
industry, including heightened pricing pressures and increased
volatility in raw material prices. Moody's expects this pricing
pressure to persist in the short to mid-term given continued
budgetary constraints of governments, but Moody's also expects
that volume growth in the longer-term will continue to be
supported by favorable demographics, new products and an
increasing demand from emerging markets. As a result, although
Moody's believes that downside risk for material decline is
limited, Moody's expects that it may be difficult to
significantly grow operating margins from current levels.

Given the relatively high fragmentation and niche character of
BSN's relevant markets, further consolidation is likely and this
may require further expansion of geographic or product coverage.
Moody's expects that under EQT ownership the Company will be
focusing on bolt-on acquisitions, a view supported by the
initially undrawn EUR75 million acquisition line and a covenant
that allows an additional EUR150 million of lines for acquisition
funding, under certain circumstances. Whereas the effect of
acquisitions is difficult to quantify upfront, significant
activity would likely slow down the deleveraging profile and
result in material upfront restructuring/transaction costs.
However, Moody's believes that extending the BSN platform could
help to further diversify product and geographic reach of the
business, reducing dependency on any individual market or

The B2 CFR is supported by: i) attractive profitability levels,
such as EBITDA margins of over 24% in financial year 2011, driven
by leading shares in niche markets; ii) product and market
diversity and favourable underlying growth demand drivers; iii)
relatively low capex and R&D intensity; iv) the ability to
generate positive free cash flows, even in a scenario of
relatively high leverage and interest cost and iv) track record
of management operating in LBO environment.

The rating is constrained by: i) high initial leverage with
prospect of sizeable acquisition activity slowing down
deleveraging; ii) exposure to pricing pressure from reimbursement
levels, consolidating customer base and regulatory changes and
iii) relatively small for a global player absolute size.


Moody's views BLS's liquidity position as good. In addition to
over EUR15 million of cash balances to be available at closing,
the company will have access to EUR50 million of undrawn revolver
line and is expected to generate positive free cash flow, which
is seasonally higher in second half of the calendar year. The
bank revolver will have covenants with sufficient headroom
initially. There are relatively limited working capital swings
and no short term debt maturity.

Structural Considerations

The EUR865 million senior secured credit facilities benefit from
senior ranking guarantees from all material group entities,
representing a minimum of 80% of all the group assets and EBITDA.
Sizeable mezzanine funding, which is subordinated, results in
upward notching for the senior instrument rating of (P) Ba3 (Loss
Given Default rating of LGD3, 32%) and is a reflection of the
instrument's seniority in the event of an enforcement of the
collateral. However, proposed (P) Ba3 instrument rating is
relatively weakly positioned and could come under pressure in
case of material acquisition line draw-downs shortly after
closing or if the debt mix would change with a higher share
senior versus mezzanine debt.

Rating Outlook and Triggers

The stable outlook reflects Moody's expectation that leverage
metrics would remain high, but not worsen in the next 12-18
months, partly mitigated by positive current trading trends.

Negative pressure could be exerted on the rating in the event of
increasing margin pressure and gross leverage exceeding 7.0x.
Aggressive debt-funded acquisition activity, weakening of
liquidity profile and/or sizeable restructuring costs could also
be triggers for downgrade.

A positive rating action is currently unlikely. An upgrade would
require a sustained period of maintaining profitability and cash
flow generation at a high level, with a subsequent reduction in
leverage, with for example debt/EBITDA improving materially below
6.0x and/or FCF/Debt of around 5%.

The principal methodology used in rating BLS was the Global
Medical Products & Device Industry Methodology published in
October 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.

BSN is a global healthcare provider of wound care, compression
therapy and orthopaedics products, with 2011 annual revenues of
over EUR660 million.

BOSTON LUXEMBOURG: S&P Assigns Prelim. 'B' Corp. Credit Rating
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to Boston Luxembourg II
S.a.r.l., the parent company of Germany-based health care group
BSN Medical (which we collectively refer to as BSN).

The outlook is stable.

"At the same time, we assigned our preliminary 'B+' issue rating
to BSN's EUR225 million senior secured term loan B1 (due 2019),
EUR514.5 million senior secured term loan B2 (due 2019), EUR50
million revolving credit facility (due 2018), and EUR75 million
acquisition facility (due 2018). The preliminary recovery rating
on these facilities is '2', indicating our expectation of
substantial (70%-90%) recovery in the event of a payment
default," S&P said.

The final ratings will be subject to the successful closing of
the proposed transaction and will depend on our receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings.

"If Standard & Poor's does not receive the final documentation
within a reasonable time frame, or if the final documentation
departs from the materials we have already reviewed, we reserve
the right to withdraw or revise our ratings. The ratings reflect
our view of BSN's relatively aggressive capital structure
following the proposed leveraged buyout by private equity group
EQT VI Ltd," S&P said.

The buyout was announced on June 11, 2012, and is due to be
completed by end of August 2012.

"In our opinion, BSN's well-established brands and its consequent
ability to charge premium prices are reflected in relatively
strong operating margins. These strengths are partially offset,
in our view, by BSN's exposure to changes in reimbursement
policies, as reimbursed products account for the majority of
BSN's revenues.

"We anticipate a challenging pricing environment for the rest of
2012 and 2013 in Europe, as a consequence of austerity measures
and cuts in public funding. Therefore, any potential price
increase could prove difficult to implement. In addition,
exposure to commodity prices, which can be volatile, may put
pressure on margins. In our view, BSN will sustain positive
underlying revenue growth of at least mid-single digits, while at
least maintaining its operating performance momentum despite the
potentially negative effects of governments' public spending cuts
to health care," S&P said.

Moreover, to maintain the rating, we believe the group should
uphold a financial profile commensurate with the rating.

"We would view adjusted EBITDA cash interest coverage of about 2x
and positive cash flow generation as commensurate with the 'B'
rating. We could take a negative rating action if adjusted EBITDA
interest coverage were to drop to less than 2x, or if BSN is not
able to generate positive FOCF," S&P said.

"This would most likely be caused by deteriorating operating
margins due to an inability to innovate and pass on price
increases, or by higher-than-expected increases in interest
rates. In our opinion, a positive rating action is unlikely over
the next two years due to BSN's high adjusted leverage," S&P

BSN MEDICAL: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
Fitch Ratings has assigned BSN medical Luxembourg Holding
S.a.r.l. (BSN) a Long-term Issuer Default Rating (IDR) of 'BB-'.
The IDR has been placed on Rating Watch Negative (RWN).

The RWN on BSN's IDR reflects the pending completion of the
acquisition of BSN by private equity firm EQT which will result
in refinancing of BSN's existing debt with the proceeds of the
proposed EUR864.5 million senior secured credit facility,
EUR391.5 million mezzanine loan facility and EUR651.3 million
equity contribution.  The successful completion of the
transaction will result in increased leverage upon completion of
the transaction.  The transaction is expected to close in mid-

Upon completion of the acquisition, Fitch expects to downgrade
BSN's IDR to 'B' with a Stable Outlook and assign a 'BB
(exp)/RR1' to the new senior secured credit facility.  Final
ratings are contingent upon final documentation conforming
materially to the information previously provided to Fitch.

The ratings are supported by BSN's leading market positions
within the global medical device industry, strong brand
recognition, its solid and consistent operating performance and
robust free cash flow generation with EBITDA and FCF margin of
25.2% and 13.0%, respectively, for FY11.  The ratings also
acknowledge the company's strong customer and geographic
diversity in each business unit.  Fitch views BSN as well-
positioned to benefit from favorable long-term demand trends such
as ageing and obesity and sees additional growth from efforts to
expand their presence in Emerging Markets.  The ratings are
negatively impacted by government healthcare cost reductions in
Europe and the weakened economic climate.  Negative rating
factors also include the potential for increased price
competition from low-cost competitors.

The combination of stable earnings and low capital spending has
helped the company to consistently generate strong free cash flow
in recent years.  However, the high funding costs under the new
capital structure are projected to consume a large portion of
operating profits and, thus, have a negative impact on operating
cash flow.  BSN is, however, expected to continue reporting
positive free cash flow in the coming years.  Fitch acknowledges
that the company may also seek to accelerate growth through
selective bolt-on acquisitions.

BSN's ratings are constrained by the relatively weak credit
metrics expected under the new capital structure.  Fitch expects
opening LTM lease-adjusted net debt/EBITDAR (x) of c. 6.5x, up
from c.  4.0x at the end of May 2012. Through a combination of
debt reduction and EBITDAR growth, Fitch expects credit
protection measures are expected to strengthen by FY14 with the
lease-adjusted net debt/EBITDAR (x) declining below 5.5x and
EBITDAR Fixed Charge Cover approaching 2.0x.  Concerns over the
large initial quantum of debt are mitigated by Fitch's
expectation that BSN, as it has in the past, will continue to use
excess cash flow to accelerate debt reduction while also
maintaining a solid liquidity profile.

Downward pressure on the post-closing IDR could, among other
factors, be caused by an increase in net lease-adjusted leverage
to above 7.5x due to significant decline in profitability or
increased debt, Fixed Charge Coverage below 1.7x, negative
organic revenue dynamics for several successive years and/or
negative free cash flow resulting in reduced liquidity.  A
positive rating action could be driven by further improvement in
operating profitability through organic business growth,
accelerated debt repayment that reduces net lease-adjusted
leverage to below 5.5x, and/or Fixed Charge Coverage ratio
between 2.0x-2.5x on a sustained basis.

In its recovery analysis, Fitch has used a going concern
assumption, as the resultant enterprise value is considerably
higher than under a liquidation scenario.  Fitch believes that a
28% discount to current EBITDA (leading to a hypothetical post-
default EBITDA margin in the range of 18%-20%) and a 6.5x
distressed EV/EBITDA multiple are fair assumptions under a
distress scenario.  This results in outstanding expected
recoveries for first lien creditors in the event of default.
Senior secured creditors would benefit from first-ranking
security ownership interest in each obligor (other than the
parent) and guarantees provided by major subsidiaries accounting
for c. 80% of consolidated EBITDA and gross assets.

LECTA SA: Moody's Assigns 'B1' Rating to Recent Bond Issuance
Moody's Investors Service has assigned definitive B1 (LGD 4, 53%)
ratings to Lecta's recent bond issuance, comprising EUR390
million of floating rate senior secured notes due 2018 and EUR200
million of fixed rate senior secured notes due 2019.


  Issuer: Lecta S.A.

    Senior Secured Regular Bond/Debenture, Assigned B1

Ratings Rationale

Moody's definitive ratings on these debt obligations confirm the
provisional ratings assigned on April 30, 2012.

The proceeds from the issuance have been used, together with cash
on balance sheet, to refinance the group's EUR598 million senior
secured floating rate notes due 2014 and the EUR120 million
senior unsecured floating rates notes due 2014.

The B1 rating of the EUR590 million senior secured notes is in
line with the group's corporate family rating, reflecting the
limited amount of priority debt ranking ahead of these notes,
relating to a EUR80 million super priority revolving credit
facility. The secured notes have been issued by Lecta S.A., a
holding company and are guaranteed on a secured basis by all
major subsidiaries and will be secured by shares pledges, certain
bank accounts and receivables. The RCF benefits from essentially
the same guarantee and collateral package as the proposed notes,
but will have priority access to enforcement proceeds in a
default scenario.

Lecta's B1 Corporate Family Rating reflects its (i) leading
market position in its core southwestern European markets for
fine and specialty paper, (ii) the favorable product mix in
higher-margin coated fine and specialty paper grades, as well as
(iii) the proximity to customers also helped by its own merchant
business, which allows for flexible production and shipping
processes and lowers transportation costs, in addition to overall
lean overhead functions. Furthermore, the rating benefits from
Lecta's track record in generating positive free cash flows,
despite significant cash restructuring payouts incurred during
the last years.

At the same time, the rating remains constrained by (i) Lecta's
elevated financial leverage as indicated by Moody's adjusted
Debt/EBITDA of 5.2 times pro forma the recent refinancing
exercise, offset to some extent by a high cash balance which
leads to a leverage of 3.8x on a net debt basis, (ii) the
inherent cyclicality of the paper industry as well as the
company's low vertical integration, (iii) its relatively small
absolute scale as evidenced in a revenue base of around EUR1.6
billion in 2011, and (iv) its regional concentration with about
50% of sales generated in Southwestern Europe and segmental focus
on coated fine paper.

Further upwards pressure would require a track record of improved
profitability levels as indicated by EBITDA margins in the low to
mid teens, enabling in turn a further deleverage of Debt/EBITDA
moving to below 4.5 times while Moody's would also expect a
continuation of positive free cash flow generation.

The rating could come under downward pressure should Lecta's
profitability decline as indicated by EBITDA margins below the
high single digit %, cash coverage as measured by RCF / Debt to
below 10% or free cash flow generation turning negative.

The principal methodology used in rating Lecta S.A. was the
Global Paper and Forest Products Industry Methodology published
in September 2009. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Lecta, with legal headquarters in Luxembourg, is a leading coated
fine paper manufacturer in Spain, Italy and France. The company
also has a specialty paper division and a distribution business
in Spain, Portugal, France, Italy and Argentina. During the last
twelve months ending March 2012, Lecta generated sales of
approximately EUR1.6 billion. The company is controlled by
private equity funds managed by CVC Capital Partners.


NORTH WESTERLY: S&P Raises Ratings on Two Note Classes to 'CCC+'
Standard & Poor's Ratings Services raised its credit ratings on
all classes of notes in North Westerly CLO III B.V.

North Westerly CLO III is a cash flow corporate loan
collateralized loan obligation (CLO) that securitizes loans to
primarily speculative-grade corporate firms.

"The rating actions follow our assessment of the transaction's
performance.  We have used data from the trustee report (dated
April 30, 2012), performed our credit and cash flow analysis, and
considered recent transaction developments%," S&P said.

"We have also considered data from the May 31, 2012 trustee
report, which we received during the interim period of our
analysis. We have applied our 2012 counterparty criteria and our
2009 cash flow criteria%," S&P said.

"Since our previous review of the transaction on Aug. 27, 2010,
we have observed decreased levels of assets in the collateral
pool that we consider  rated in the 'CCC' category ('CCC+',
'CCC', or 'CCC-') and that we consider  defaulted (rated 'CC',
'C', 'SD' [selective default], or 'D'). The transaction is still
in its reinvestment period, ending in October this year%," S&P

All par coverage tests are in compliance with the required
trigger and are higher than at our previous review.  "We have
also observed increased weighted-average spread on the collateral
pool.  We have subjected the capital structure to our cash flow
analysis, based on the methodology and assumptions in our 2009
cash flow criteria, to determine the break-even default rate
(BDR) at each rating level%," S&P said.

"We used the reported portfolio balance that we considered to be
performing, the principal cash balance, the weighted-average
spread, and the weighted-average recovery rates that we
considered to be appropriate. We incorporated various cash flow
stress scenarios, using various default patterns, levels, and
timings for each liability rating category, in conjunction with
different interest rate stress scenarios%," S&P said.

"We have also conducted our credit analysis, to determine the
scenario default rate (SDR) at each rating level, which we then
compared with its respective BDR.  Taking into account our credit
and cash flow analyses, we consider the credit enhancement
available to all classes of notes in this transaction to be
commensurate with higher ratings then we previously assigned. We
have therefore raised our ratings on all classes of notes in
North Westerly CLO III%," S&P said.

"We have analyzed the derivative counterparties' exposure to the
transaction under our 2012 counterparty criteria, and concluded
that the derivative exposure is currently sufficiently limited,
so as not to affect the ratings that we have assigned%," S&P

North Westerly CLO III B.V.
EUR432.8 Million Secured Floating-Rate Notes

Class                     Rating
                To                       From

Ratings Raised

A               AA- (sf)                 A+ (sf)
B               A- (sf)                  BB+ (sf)
C               BBB- (sf)                BB (sf)
D               BB+ (sf)                 B+ (sf)
E               B+ (sf)                  CCC+ (sf)
Q Combo         B+ (sf)                  CCC+ (sf)


RENEWABLE ENERGY: Agrees Bank Facility Under Restructuring Plan
Victoria Klesty and Henrik Oliver Stolen at Reuters report that
Renewable Energy Corp. has agreed a new bank facility under a
restructuring plan as it seeks to survive a global glut of its
key products and high raw material costs.

The company, which saw a previous debt restructuring blocked by
its bondholders, has raised US$218 million in equity and will
take up a new NOK2 billion (US$335.3 million) bank debt facility,
after bondholders failed to approve changes to a bond loan
agreement on Tuesday, Reuters relates.

The revised proposal, which consists of a private share placement
and a subsequent offering to more shareholders, is to be formally
voted on at a shareholder meeting at the end of July, Reuters

According to Reuters, spokesman Mikkel Toerud said that REC has
approached a bigger number of shareholders with the new
restructuring plan and its banks had agreed to extend the
expiration of the company's loan facility by a year.

REC raised NOK1.3 billion in a private placement of nearly 867
million new shares at NOK1.50 per share, plus a subsequent
offering with gross proceeds of up to NOK375 million, Reuters

The terms are unchanged from the firm's original offer, which was
approved by an extraordinary general meeting on June 29, Reuters

Renewable Energy Corp. is a Norwegian manufacturer of solar power


PBG SA: New CEO Needs More Time to Prepare Strategy
Marta Waldoch at Bloomberg News, citing Parkiet newspaper,
reports that PBG SA's new Chief Executive Officer Wieslaw Rozacki
needs "several more days" to prepare a strategy for the company
that last month filed for bankruptcy.

According to Bloomberg, Mr. Rozacki, as cited by Parkiet, said
that the group will undergo "deep restructuring process" in
coming months.

As reported by the Troubled Company Reporter-Europe on July 2,
2012, Polska Agencja Prasowa related that Wieslaw Rozacki, PBG's
largest shareholder, expects voting on the company's debt
restructuring agreement could take place in December or in
January 2013 at the earliest.  Mr. Wisniewski said PBG is in
talks with a potential strategic investor, whose engagement would
enable the company to reach a debt restructuring deal faster and
on more favorable terms for the creditors, according to PAP.

PBG SA is Poland's third largest builder.


TRANSELECTRICA: Moody's Cuts LT Corporate Family Rating to 'Ba1'
Moody's Investors Service has downgraded to Ba1 from Baa3
Transelectrica's long-term corporate family rating and assigned a
Ba1 probability of default rating (PDR). Concurrently, Moody's
has placed the company's ratings on review for further downgrade.
The rating action represents a transition of Transelectrica's
rating to non-investment grade from investment grade. There is no
rated debt outstanding.

Ratings Rationale

"The downgrade of Transelectrica's ratings to Ba1 from Baa3
reflects the downward revision, to strong from high, of our
assumption of the level of extraordinary support that
Transelectrica can expect to receive from its majority owner, the
Romanian government," says Richard Miratsky, a Moody's Vice
President -- Senior Analyst and lead analyst for Transelectrica.
"The review for further downgrade will focus on the assessment of
Transelectrica's liquidity position that is significantly
dependent on the company's ability to continuously raise external
funding in order to cover a sizeable investment plan, and whether
any further downwards adjustment to our support assumption is
warranted," adds Mr. Miratsky.

Given its 58.69% ownership by the Government of Romania,
Transelectrica falls within the scope of Moody's rating
methodology for government-related issuers (GRIs). In accordance
with this methodology, Transelectrica's rating incorporates an
uplift for potential government support to its standalone credit
quality, which is expressed as a baseline credit assessment
(BCA). Transelectrica's BCA, currently at 13 (equivalent to a Ba3
rating), will be reassessed as part of the review of
Transelectrica's rating.

Transelectrica's Ba1 rating incorporates an uplift to the BCA
from potential government support in case of extraordinary need.
Moody's has reduced the uplift to the BCA to two notches from
three, reflecting the rating agency's downward revised
assessment, to strong from high, of the probability of government
support in the event of financial distress. Moody's downward
revision of its assumption of extraordinary support reflects: (1)
the recent decrease, to 58.69% from 73.69%, in the government's
ownership share in Transelectrica; (2) the rating agency's
expectation that the government could further reduce its share
closer to the 51% threshold in the short- to medium-term; and (3)
Moody's downward revision of assumption of the probability of a
government bailout or other economic intervention in the case of
a state-owned entity experiencing extraordinary distress,
evidenced in the recent developments in the case of
Hidroelectrica's filing for insolvency.

Transelectrica's Ba1 rating also incorporates Moody's assumption
of very high default dependence between the company and its
governmental owner. Transelectrica derives virtually all of its
revenues from domestic activities resulting in the significant
degree of exposure to common drivers of credit quality.
Furthermore, Transelectrica's significant exposure to foreign
exchange (FX) risk increases the correlation between
macroeconomic developments in Romania and Transelectrica's credit
profile and rating. Transelectrica's FX risk stems from the fact
that the majority of the company's debt is denominated in foreign
currency, while most of its revenues are generated in the local
currency, leaving limited scope for any natural hedge.

The rating review for downgrade will focus on Moody's assessment
of Transelectrica's liquidity that is significantly dependent on
the company's ability to continuously secure external funding in
order to cover the sizeable investment plan, and whether any
further downwards adjustment to Moody's support assumption is
warranted in the light of the government's intended further sell
down of its stake.


Given that Transelectrica's ratings remain on review for possible
downgrade, Moody's sees limited potential for a rating upgrade
over the medium term. The very high dependence of
Transelectrica's Ba1 ratings on the bond rating of the government
of Romania implies that any downgrade in the rating of Romania
would likely result in a downgrade in the rating of
Transelectrica. Furthermore, Transelectrica's rating and BCA
could come under downward pressure if liquidity pressures
intensify or the company's credit profile weakens materially, as
reflected by (1) funds from operations (FFO)/interest coverage
ratio falling below 4.0x; and (2) its FFO/debt ratio declining
below 20%.

Principal Methodologies

The methodologies used in this rating were Regulated Electric and
Gas Networks published in August 2009, and Government-Related
Issuers: Methodology Update published in July 2010.

Transelectrica, headquartered in Bucharest, is a majority state-
owned electricity transmission system and market operator in
Romania. In 2011, the company's total consolidated revenues were
LEI3,147 million (around EUR728 million).


* LENINGRAD: Fitch Upgrades Long-Term Currency Ratings to 'BB+'
Fitch Ratings has upgraded the Russian Leningrad Region's Long-
term foreign and local currency ratings to 'BB+' from 'BB' and
affirmed the region's Short-term rating at 'B'.  The agency has
also upgraded the region's National Long-term rating to 'AA(rus)'
from 'AA-(rus)'.  The Outlooks on the Long-term ratings are
Stable.  The rating action also affects the region's outstanding
domestic bond of RUB1.3 billion.

The upgrade reflects the region's sound operating performance,
low level of debt, strong liquidity and growing economy.  The
Stable Outlook reflects Fitch's expectation of a steady operating
performance with balanced or close to balanced budget and low
level of debt in 2012-2014.

Fitch notes that positive rating action is subject to sustained
sound budgetary performance with operating margin at about 20% in
the medium term coupled with containment of direct risk at sound
levels.  Conversely sharp deterioration of budgetary performance
and growth of total indebtedness significantly above Fitch's
expectations would be negative for the rating.

Leningrad region has a well-diversified economy based on
processing industries and transport sector.  The region's economy
continued to grow at rates above the national average in 2011.
Gross regional product (GRP) expanded 6.4% yoy in 2011 (2010:

The region has consistently demonstrated surplus budgets with the
exception of 2009.  Fitch expects the region to have close to
balanced budgets in 2012-2014, despite expected capex at above
20% of total expenditure.  The region's self-financing capacity
of capital expenditure was strong in 2010-2011.

Fitch expects the region's operating margin to remain sound in
2012-2014. Operating revenue will continue to increase driven by
growth of industrial output and broadening of the tax base.  In
2011 the margin was slightly below 19% and surplus before debt
variation equaled 1% of total revenue.  The region has low
reliance on current transfers from the federal budget.  Tax
revenue represents more than 80% of the region's total operating

Fitch expects the region will continue to have low level of debt
in 2012-2014.  Direct risk will decline as existing liabilities
come to maturity.  In relative terms the region's direct risk
will not exceed 5% of current revenue.  The payback ratio (direct
risk/current balance) will remain very strong and should not
exceed six months in 2012-2014.  The region's direct risk
amounted to RUB2.6 billion at end-2011, or a low 4.4% of current
revenue (2010: 5.5%).

Leningrad region had a sound liquidity cushion, as its cash
amounted to RUB4.3bn at end-2011.  The region has established its
own reserve fund in 2012 to ensure smooth cash management during
potential financial instability.

The region is located in the north-west of the Russian
Federation.  It accounted for 1.3% of the country's GRP in 2010
and 1.2% of its population.  The region's revenue is driven by
taxes (81.6% of operating revenue in 2011).


BANKIA SA: Rodrigo Rato Among Officials to Face Fraud Probe
BBC News reports that former International Monetary Fund chief
Rodrigo Rato is one of 33 current and former officials at Spanish
lender Bankia who are facing a fraud inquiry.

Mr. Rato, who is Bankia's ex-chairman, and the others are accused
of fraud, price-fixing and falsifying accounts.

The case opened in the High Court in Madrid after a lawsuit was
brought by a small political party, UPyD.

The government took control of Bankia in May when it became
insolvent after large losses from risky home loans.

According to the Telegraph's Alistair Osborne, hours after the
legal probe was announced, Bankia's chief executive Francisco
Verdu, abruptly quit, announcing the move in a one sentence
regulatory filing.

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

BBVA RMBS: S&P Downgrades Rating on Class C Notes to 'B'
Standard & Poor's Ratings Services lowered its credit ratings on
all classes of BBVA RMBS 2 Fondo de Titulizacion de Activos'
residential mortgage-backed notes.  The portfolio securitized
mortgages granted to individuals in Spain for the acquisition of
residential properties, with a weighted-average loan-to-value
ratio of 76.67% at closing. These loans were originated by Banco
Bilbao Vizcaya Argentaria S.A. (BBVA).

"Over the past two years, we have observed a stabilization of the
delinquency levels in the portfolio backing this transaction. The
bucket of 180+ day delinquencies has decreased compared with the
levels experienced in July-November 2009 (a peak of 0.73%). From
60 days delinquent up to default (12 months in arrears), arrears
levels have been stable since March 2010, and are below 0.4%,"
S&P said.

During the past year, arrears of 90+ days up to default have
increased by only 13 basis points (bps). Although the performance
has not worsened during the past year, some structural features
have had an impact on the rating decisions, as outlined
below.  The reserve fund has been fully drawn since the September
2010 interest payment date, and has not been replenished since
then. In addition, the class C notes are undercollateralized by
EUR22.4 million, weakening the credit enhancement provided by
subordinated notes to senior notes. On the last payment date
(June 20, 2012), the class A2 notes were partially amortized, and
registered a principal deficiency of EUR23.9 million. All of
these factors have driven the downgrades of all the notes in this

The transaction features interest-deferral triggers, based on
cumulative defaults. Interest on the notes is deferred if
cumulative loans in default are more than 12% of the initial
balance of the mortgages for class B, and 10% for class C. Given
that the level of cumulative defaults over the original balance
is 2.51% as of May 31, 2012, we consider that interest on the
junior classes of notes will not be postponed in the near future.

"Because our issuer credit rating (ICR) on BBVA is
BBB+/Negative/A-2, it posted collateral in May 2011 to comply
with the downgrade language defined in the transaction
documentation," S&P said.

The swap counterparty will have the obligation to be replaced if
it is downgraded below 'A-2'. As BBVA is the swap counterparty,
and not considering other factors, the maximum rating achievable
in the transaction is 'A-', which is equal to the ICR on the
counterparty plus one notch.

"However, we have downgraded the class A notes to 'BBB+ (sf)' due
to performance, and there are no constraints on the ratings due
to counterparty risk of the transaction parties.  BBVA is no
longer eligible as bank account provider for this transaction,
and it is therefore looking for a guarantor or a substitute. If
BBVA does not replace itself with an eligible counterparty in
accordance with our criteria, the maximum rating achievable would
be equal to the ICR on BBVA, which as of now is the same as the
actual rating on the most senior notes (BBB+)," S&P said.

Ratings List

Class               Rating
             To               From

BBVA RMBS 2, Fondo de Titulizacion de Activos
EUR5 Billion Mortgage-Backed Floating-Rate Notes

Ratings Lowered

A2           BBB+ (sf)        A+ (sf)
A3           BBB+ (sf)        A+ (sf)
A4           BBB+ (sf)        A+ (sf)
B            BB (sf)          BBB (sf)
C            B (sf)           BB (sf)

PYMES SANTANDER: S&P Assigns Prelim. 'CC' Rating to Class C Notes
Standard & Poor's Ratings Services assigned its preliminary
credit ratings to Fondo de Titulizacion de Activos, PYMES
SANTANDER 3's class A, B, and C notes. This asset-backed
securities (ABS) transaction securitizes a pool of secured and
unsecured loans granted by Banco Santander S.A. (A-/Negative/A-2)
to Spanish small and midsize enterprises (SMEs) and self-employed
borrowers.  Banco Santander will also act as servicer, financial
agent, and treasury account provider.

"Our preliminary 'A- (sf)' rating on the class A notes reflects
our assessment of the credit and cash flow characteristics of the
underlying asset pool, as well as our analysis of the
counterparty, legal, and operational risks of the transaction.
Our analysis indicates that the credit enhancement available to
the notes is sufficient to mitigate the credit and cash flow
risks to a 'A-' rating level," S&P said.

Ratings List

Fondo de Titulizacion de Activos, PYMES SANTANDER 3
EUR1.884 Billion Asset-Backed Floating-Rate Notes

Class      Prelim.             Prelim.
           rating               amount
                              (mil. EUR)

A          A- (sf)             1,303.1
B          CCC (sf)              266.9
C          CC (sf)               314.0

* SPAIN: Finland Disputes Seniority Clause in Bank Bailout
Kati Pohjanpalo at Bloomberg News reports that Finland is
contesting the wording of an agreement struck last week in
Brussels, arguing it doesn't adequately address the possibility
that loans to Spain from Europe's permanent rescue fund can give
taxpayers seniority.

According to Bloomberg, Martti Salmi, a Finnish Finance Ministry
official, said that a June 29 statement from the 17 euro-area
leaders stripping the European Stability Mechanism of its
preferred creditor status in Spain was incomplete.  Mr. Salmi, as
cited by Bloomberg, said that the EUR100 billion (US$126 billion)
bank bailout could provide seniority to contributor nations if
fresh funds are transferred by the ESM.

The government of Prime Minister Jyrki Katainen this week
underscored its opposition to using the ESM to purchase bonds on
the secondary market, while Finland has also said it expects
collateral in exchange for any aid commitments that don't give it
preferred creditor status, Bloomberg relates.

Finland's government on July 2 reiterated its opposition to
secondary market bond purchases using the ESM, citing the rescue
fund's limited resources and what it called the proven
"ineffectiveness" of such measures, Bloomberg notes.  According
to Bloomberg, Mr. Salmi said that such interventions could cost
as much as "hundreds of billions of euros," and be a deal-breaker
for Finland.

U N I T E D   K I N G D O M

BATTERSEA POWER: Sold to SP Setia-Led Consortium for GBP400-Mil.
Alistair Osborne at The Telegraph reports that Battersea Power
Station has been sold to a consortium led by Malaysia's SP Setia
for GBP400 million.

Joint sale advisers Knight Frank and Ernst & Young exchanged
contracts on Wednesday on the sale of the 39-acre site on the
south bank of the River Thames -- the last prime piece of central
London real estate available for redevelopment, the Telegraph

The consortium of SP Setia, Malaysia's leading property
developer, plans to redevelop the crumbling but protected site
into homes, offices and shops, the Telegraph says.  Other
consortium members include Sime Darby and the Employees' Pension
Fund of Malaysia, the Telegraph notes.

As reported by the Troubled company Reporter-Europe, the
Telegraph disclosed that the site was placed into administration
last year with Ernst & Young after Lloyds Banking Group and
Ireland's National Asset Management Agency called in debt against
the struggling Irish developer, Real Estate Opportunities, which
controlled the power station.

Battersea Power Station, with four 350-foot-high smokestacks, is
Europe's largest brick building.

DUNEDIN INDEPENDENT: Didier Slama Buys Assets Out of Liquidation
Erikka Askeland at The Scotsman reports that the assets of failed
wealth manager Dunedin Independent have been bought out of
liquidation by a former consultant to the business.

Didier Slama, who now heads Beatha Wealth Management, on Monday
announced he had concluded the acquisition of certain assets of
Dunedin, which collapsed leaving clients facing losses of up to
GBP6 million on mis-sold investments.

The former IFA was put into liquidation by its owner, Helvetia
Wealth, 18 months after the Swiss firm paid GBP4 million to
acquire it, the Scotsman relates.

JULIAN GRAVES: In Administration; 363 Jobs at Risk
Andrea Felsted at The Financial Times reports that Julian Graves
has become the latest UK retailer to collapse into

Deloitte, the professional services firm, was appointed as
administrator to Julian Graves, which has 189 stores in the UK,
the FT relates.

According to the FT, people familiar with the situation said that
some 363 full-time equivalent jobs have been put at risk by the
administration of the company and had been loss-making.

Deloitte, as cited by the FT, said Julian Graves had been
"adversely affected by the tough economic climate, in particular
the ongoing pressure on consumer spending, a competitive high
street trading environment, and rising commodity prices".

It added that all the stores would trade as normal for the time
being, and employees would be paid, the FT notes.

"Our priority is to assess the financial position of Julian
Graves and consider what options are available," the FT quotes
Chris Farrington, joint administrator and restructuring services
partner at Deloitte, as saying.

Julian Graves is a health food retailer that is a sister company
of Holland & Barrett.  It is headquartered in Nuneaton,

* UK: Treasury Mulls Sanctions for Directors of Failed Banks
Andrew Atkinson at Bloomberg News reports that directors of
failed banks could be barred from holding similar positions at
other financial institutions under proposals published by the
U.K. government on Tuesday.

According to Bloomberg, the Treasury said in a statement that the
government is also consulting on the possibility of introducing
criminal sanctions for serious misconduct in the management of a

"The government is committed to tackling the legacies of the
crisis and implementing the most far-reaching reforms of British
banking in our modern history," Bloomberg quotes Treasury
minister Mark Hoban as saying.


* BOOK REVIEW: The Health Care Marketplace
Author: Warren Greenberg, Ph.D.
Publisher: Beard Books
Softcover: 179 pages
List Price: $34.95
Review by Henry Berry

Greenberg is an economist who analyzes the healthcare field from
the perspective that "health care is a business [in which] the
principles of supply and demand are as applicable . . . as to
other businesses."  This perspective does not ignore or minimize
the question of the quality of health, but rather focuses sharply
on the relationship between the quality of healthcare and
economic factors and practices.

For better or worse, the American healthcare system to a
considerable degree embodies the beliefs, principles, and aims of
a free-market capitalist economic system driven by competition.
In the early sections of The Health Care Marketplace, Greenberg
takes up the question of how physicians and how hospitals compete
in this system.  "Competition among physicians takes place
locally among primary care physicians and on a wider geographical
scale among specialists.  There is competition also between M.D.s
and allied practitioners: for example, between ophthalmologists
and optometrists and between psychiatrists and psychologists.
Regarding competition between physicians in a fee-for-service
practice and those in managed care plans, Greenberg cites
statistics and studies that there was lesser utilization of
healthcare services, such as hospitalization and tests, with
managed care plans.

Some of the factors affecting the economics of different areas of
the healthcare field are self-evident, albeit may be little
recognized or little realized by consumers.  One of these factors
is physician demeanor.  Most readers would see a physician's
demeanor as a type of personality exhibited during the course of
the day.  But after the author notes that "[c]ompetition also
takes place in professional demeanor, location, and waiting
time," the word "demeanor" takes on added meaning. The demeanor
of a big-city plastic surgeon, for example, would be markedly
different from that of a rural pediatrician.  Thus, demeanor has
a relationship to the costs, options, services, and payments in
the medical field, and also a relationship to doctor education
and government funding for public health.

Greenberg does not follow his economic data and summarizations
with recommendations or advice.  He leaves it to the policymakers
to make decisions on the basis of the raw economic data and
indisputable factors such as physician demeanor.  Nor does he
take a political position when he selects what data to present or
emphasize.  It is this apolitical, unbiased approach that makes
The Health Care Marketplace of most value to readers interested
in understanding the economics of the healthcare field.

Without question, a thorough understanding of the factors
underlying the healthcare marketplace is necessary before changes
can be made so that the health needs of the public are better
met.  Conditions that are often seen as intractable because they
are regarded as social or political problems such as the
overcrowding of inner-city health centers or preferential
treatment of HMOs are, in Greenberg's view, problems amenable to
economic solutions. According to the author, the basic economic
principle of supply-and-demand goes a long way in explaining
exorbitantly high medical costs and the proliferation of

Greenberg's rigorous economic analysis similarly yields an
informative picture of the workings of other aspects of the
healthcare field.  Among these are hospitals, insurance, employee
health benefits, technology, government funding of health
programs, government regulation, and long-term health care.  In
the closing chapter, Greenberg applies his abilities as a keen-
eyed observer of the economic workings of the U.S. healthcare
field to survey healthcare systems in three other countries:
Canada, Israel, and the Netherlands.  "An analysis of each of the
three systems will explain the relative doses of competition,
regulation, and rationing that might be used in financing of
health care in the United States," he says.  But even here, as in
his economic analyses of the U.S. healthcare system, Greenberg
remains nonpartisan and does not recommend one of these three
foreign systems over the other.  Instead he critiques the
Canadian, Israel, and Netherlands systems -- "none [of which]
makes use of the employer in the provision of health insurance,"
he says -- to prompt the reader to look at the present state and
future of U.S. healthcare in new ways.

The Health Care Marketplace is not a book of limited interest,
and the author's focus on the economics of the health field does
not make for dry reading.  Healthcare is a central concern of
every individual and society in general. Greenberg's book
clarifies the workings of the healthcare field and provides a
starting point for addressing its long-recognized problems and
moving down the road to dealing effectively with them.

Warren Greenberg is Professor of Health Economics and Health Care
Sciences at George Washington University, and also a Senior
Fellow at the University's Center for Health Policy Research.
Prior to these positions, in the 1970s he was a staff economist
with the Federal Trade Commission.  He has written a number of
other books and numerous articles on economics and healthcare.


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

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  Go to order any title today.


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

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

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

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

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

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

                 * * * End of Transmission * * *