TCREUR_Public/120711.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, July 11, 2012, Vol. 13, No. 137

                            Headlines



B U L G A R I A

LOCOMOTIVES AND CARRIAGE: Assets Put Up for Sale for BGN17.19MM


C Y P R U S

ABH FINANCIAL: S&P Assigns 'BB-' Counterparty Credit Ratings


G E R M A N Y

BAYERISCHE LANDESBANK: Germany, EC Agree on Restructuring Terms
DEUTSCHE ANNINGTON: 32% of Creditors Back Debt Restructuring Deal
DEWEY & LEBOEUF: Taps Thierhoff Muller as Wind Down Counsel
EXETER BLUE: Fitch Downgrades Rating on Class E Notes to 'Bsf'
SEMPER FINANCE: Fitch Affirms Rating on Class E Notes at 'Bsf'

SOLAR MILLENNIUM: U.S. Court Recognizes German Proceeding


H U N G A R Y

MAGYAR TELECOM: S&P Cuts Long-Term Corp. Credit Ratings to 'CCC+'


K A Z A K H S T A N

TSESNA BANK: S&P Affirms 'B' Long-Term Counterparty Credit Rating


N E T H E R L A N D S

INTERGEN NV: Moody's Reviews 'Ba3' Rating for Possible Downgrade
STORK TECHNICAL: Moody's Assigns '(P)B2' CFR; Outlook Negative
STORK TECHNICAL: Assigns 'B' Long-Term Corporate Credit Rating


P O R T U G A L

* CAPE VERDE: S&P Affirms 'B+/B' Currency Sovereign Ratings


R U S S I A

ALFA-BANK OJSC: S&P Affirms 'BB/B' LT Counterparty Credit Ratings
FREIGHT ONE: S&P Cuts Corporate Credit Ratings to 'BB+/B'
FUNDSERVICEBANK: Moody's Cuts LT National Scale Rating to 'Ba2'
FUNDSERVICEBANK: Moody's Lowers BFSR to 'E'; Outlook Stable


S P A I N

AYT FONDO EOLICO: Moody's Cuts Ratings on Two Note Classes to Ba3
CIRSA GAMING: S&P Alters Outlook on 'B+' CCR to Negative
CODERE SA: S&P Cuts Long-Term Corporate Credit Rating to 'B-'
GRIFOLS: Moody's Raises CFR to 'Ba3'; Outlook Positive
LN PLUS: Files for Bankruptcy in Spain

* SPAIN: EU Finance Ministers Agree on EUR30-Bil. Bank Bailout


S W I T Z E R L A N D

SUNRISE COMMS: Fitch Affirms 'BB-' LT Issuer Default Rating
SUNRISE COMMUNICATIONS: S&P Rates CHF400MM Sr. Sec. Notes 'BB-'


U N I T E D   K I N G D O M

BADGERS: Planned Takeover Fails; Owner Optimistic on Future
FAREPAK: Customers to Recover About of Half of Claims
GKN HOLDINGS: S&P Affirms 'BB+' Long-Term Corporate Credit Rating
THOMAS COOK: S&P Cuts Long-Term Corporate Credit Rating to 'B-'
* UK: Company Failures Lower Than Forecast, Begbies Traynor Says


X X X X X X X X

* S&P Takes Rating Actions on 10 European CDO Tranches


                            *********


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B U L G A R I A
===============


LOCOMOTIVES AND CARRIAGE: Assets Put Up for Sale for BGN17.19MM
---------------------------------------------------------------
FOCUS News Agency reports that the assets of Locomotives and
Carriage - Ruse are being offered on a tender for BGN17.19
million.  The factory is part of the assets of the Railway
Infrastructure Holding, whose owner is infamous businessman Vasil
Bozhkov, FOCUS News notes.

Companies from Mr.Bozhkov's group have debts of dozens of
millions to United Bulgarian Bank (UBB) and UniCredit Bulbank
alone, FOCUS News discloses.  Locomotives and Carriage Works was
mortgaged against EUR22.5 million, FOCUS News notes.  The assets
of Repair and Reconstruction Enterprise Koehne, that is also part
of the same holding, are offered for the second time at the
initial price of BGN8.64 million in order to cover debts to UBB,
as well as the Privatization Agency, FOCUS News relates.

Locomotives and Carriage - Ruse is based in Bulgaria.



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C Y P R U S
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ABH FINANCIAL: S&P Assigns 'BB-' Counterparty Credit Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services had assigned its 'BB-' long-
term and 'B' short-term counterparty credit ratings to Cyprus-
registered non-operating holding company ABH Financial Ltd.

The outlook is positive.

ABH Financial ultimately owns Russia-based OJSC Alfa-Bank,
through OJSC AB Holding, which is registered in Russia.

"We classify both ABH Financial and AB Holding as nonoperating
holding companies because they don't perform any operating
activity and serve solely as holding companies," S&P said.

"Our ratings on ABH Financial reflect the strength of Alfa-Bank's
operations. In line with our criteria for nonoperating holding
companies, the long-term rating on ABH Financial is one notch
lower than that on the operating entity Alfa-Bank," S&P said.

The rating differential is mainly due to ABH Financial's reliance
on dividends and other distributions from Alfa-Bank to meet its
obligations.

"In addition, we consider there to be a high level of double
leverage, which we define as investment in subsidiaries divided
by the holding company's unconsolidated shareholders' equity,"
S&P said.

As of Dec. 31, 2011, double leverage was close to 160%.

"We note that all of the liabilities are to ABH Financial's
subsidiaries, which in our view mitigates liquidity risk. These
liabilities are netted in the group consolidation," S&P said.

"The rating on Alfa-Bank benefits from one notch of uplift to
reflect our view of the bank's "moderate systemic importance" in
Russia, a country we regard as supportive to its banking system,"
S&P said.

"We believe that any extraordinary government support to the bank
in case of need would be extended to the holding company to allow
the timely servicing of its obligations," S&P said.
"Consequently, we maintain the one-notch rating differential
between ABH Financial and Alfa-Bank. The positive outlook on ABH
Financial mirrors that on Alfa-Bank," S&P said.

The ratings and outlook on the holding company will move in
tandem with those on the operating entity.

"We could, however, widen the rating differential between ABH
Financial and Alfa-Bank if we saw a significant deterioration of
the bank's regulatory capital ratios, which are now above the
minimum requirements.

This is because such a deterioration could pose the risk of a
restriction of dividends to the holding company.



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


BAYERISCHE LANDESBANK: Germany, EC Agree on Restructuring Terms
---------------------------------------------------------------
Chris Bryant at The Financial Times reports that German
authorities have reached agreement with the European Commission
on the terms of BayernLB's restructuring after the German
Landesbank received a EUR10 billion bailout during the crisis.

According to a deal announced by Joaquin Almunia, EU competition
commissioner, on Monday, BayernLB is set to reduce its balance
sheet by half and will be obliged to repay EUR5 billion of state
aid by 2019, the FT notes.

The regional lender is also expected to sell or reduce higher-
risk activities abroad such as those in international real estate
and project finance, the FT says.  It will instead concentrate on
lending to the "real economy" in Germany, the FT states.

The bank is set to refrain from acquisitions or paying a
dividend, as is common in state, the FT discloses.

                         About BayernLB

Bayerische Landesbank a.k.a BayernLB -- http://www.bayernlb.de/
-- acts as the principal bank to the state of Bavaria and as the
central clearing house for the 75 Bavarian sparkassen (savings
banks).  Also serving corporations, national and local
governments, financial institutions, and real estate firms, the
bank offers a variety of services, including financing, security
underwriting and trading, and risk management.  It provides
retail and private banking services for individuals through its
Internet bank, Deutsche Kreditbank, and through banking
subsidiaries in central and southeastern Europe.  BayernLB's
Landesbank Saar subsidiary (75% owned) provides financing to
small and midsized businesses in the German state of Saarland and
in France.


DEUTSCHE ANNINGTON: 32% of Creditors Back Debt Restructuring Deal
-----------------------------------------------------------------
Dalia Fahmy at Bloomberg News reports that Deutsche Annington
Immobilien AG reached a preliminary agreement to restructure
EUR4.3 billion (US$5.3 billion) of debt.

Under the accord, Deutsche Annington would pay a higher interest
rate to holders of its commercial mortgage-backed securities,
known as German Residential Asset Note Distributor Plc, Bloomberg
discloses.  According to Bloomberg, the Bochum-based company said
in a statement on Tuesday that in return, it will get more time
to repay the debt.

The accord, reached after more than a year of talks, was accepted
by a group of creditors who hold 32% of the debt and now needs
approval from the remaining investors, Bloomberg relates.
Parties agreeing to the deal include JPMorgan Chase & Co. (JPM),
Pacific Investment Management Co., BayernLB and Standard Life
Investments, according to Bloomberg.  There are more than 100
noteholders, Bloomberg says.

The statement said that under the new terms, Terra Firma will add
EUR504 million of capital and it will be given five years to pay
off the remaining amount, Bloomberg notes.  EUR1 billion will be
due in the first year, Bloomberg states.

Deutsche Annington Immobilien AG is the German property company
owned by Guy Hands' Terra Firma Capital Partners Ltd.


DEWEY & LEBOEUF: Taps Thierhoff Muller as Wind Down Counsel
-----------------------------------------------------------
Dewey & LeBoeuf LLP asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Thierhoff
Muller & Partner as German wind down counsel and consultants to
the Debtor, to wind down the Debtor's Frankfurt, Germany office.

Prior to the Petition Date, the Debtor operated a branch office
in Frankfurt, Germany.  The Debtor seeks to wind down its affairs
relating to those offices.  Specifically, with respect to the
Frankfurt Office, the Debtor seeks, inter alia, to collect and
preserve assets related to the office for the benefit of its
estate and to address certain claims or causes of action that may
arise under German insolvency law, including resolving certain
insolvency actions filed in Frankfurt against the Debtor.

Renate Muller, a partner of Thierhoff, tells the Court that the
firm will coordinate with the Debtor's proposed bankruptcy
counsel, Togut, Segal and Segal LLP, and other professionals
engaged by the Debtor to avoid any unnecessary duplication of
effort.

Thierhoff's billing rates for the professionals to be engaged
on the matter range from EUR500 to EUR320 per hour.

To the best of the Debtor's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

                       About Dewey & LeBoeuf

New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations.  The firm had struggled with high
debt and partner defections.  Dewey disclosed debt of US$245
million and assets of US$193 million in its chapter 11 filing
late evening on May 29, 2012.

Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP.  At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe.  When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.

Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in
process of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28.  All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure.  The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate.  The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.

The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for $6
million.  The Pension benefit Guaranty Corp. took US$2 million of
the proceeds as part of a settlement.

Judge Martin Glenn oversees the case.  Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor.  Epiq Bankruptcy
Solutions LLC serves as claims and notice agent.  The petition
was signed by Jonathan A. Mitchell, chief restructuring officer.

JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP.  JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors.  The Noteholders hired
Bingham McCutchen LLP as counsel.

The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners.  The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel.  The Former Partners
hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at
Klestadt & Winters, LLP, as counsel.

Dewey & LeBoeuf has won Court authority to use lenders' cash
collateral through July 31, 2012.


EXETER BLUE: Fitch Downgrades Rating on Class E Notes to 'Bsf'
--------------------------------------------------------------
Fitch Ratings has downgraded Exeter Blue's notes as follows:

  -- EUR31.875m class A downgraded to 'AAsf' from 'AAAsf';
     Outlook revised to Stable from Negative;

  -- EUR31.875m class B downgraded to 'Asf' from 'AAsf'; Outlook
     revised to Stable from Negative;

  -- EUR26.5625m class C downgraded to 'BBBsf' from 'Asf';
     Outlook Negative;

  -- EUR10.625m class D downgraded to 'BBsf' from 'BBBsf';
     Outlook Negative;

  -- EUR8.5m class E: downgraded to 'Bsf' from 'BBsf'; Outlook
     Negative;

The downgrades reflect the notes failure to withstand Fitch
stresses as well as the notes' insufficient levels of credit
enhancement (CE) given the current obligor concentration level as
well as the reference portfolio exposure to peripheral eurozone
countries.

The CE levels on the notes have increased since the origination
as the super senior class has been reduced to 78.5% of its
original size.  Currently, the top obligor accounts for 6.5% of
the reference portfolio versus 5.85% a year ago, whereas the top
five obligors amount for 26.3% versus 22.8% year on year.  The
exposure to Spain, Cyprus and Portugal stand at 6.9% with all the
assets rated below investment grade.

The transaction is still in its replenishment period which ends
in January 2013. Currently, the balance of the reference
portfolio represents 81% of its initial balance and consists of
46 loans from 46 obligors.  The weighted average recovery rate
has not changed significantly over the past year and currently
stands at 81%.  The weighted average rating of the assets is also
unchanged at 'BBB-*' with downgrades largely offset by upgrades.
However, there are six loans in the portfolio which are still in
the construction phase and have a higher default risk
correspondingly; the loans amount for 25% of the reference pool.

Exeter Blue is a managed synthetic balance sheet securitization
of project finance and infrastructure loans primarily located in
Western Europe.  The senior exposure was retained by the
originator. The proceeds from the note issuance are deposited
with Lloyds TSB in the amount of EUR125.9065 million.


SEMPER FINANCE: Fitch Affirms Rating on Class E Notes at 'Bsf'
--------------------------------------------------------------
Fitch Ratings has affirmed Semper Finance 2007-1 commercial
mortgage-backed floating-rate notes, as follows:

Class A1 (XS0305670308): Paid in Full (PIF)

  -- EUR88,914 A1+ (XS0305670647) affirmed at 'AAAsf'; Outlook
     Stable
  -- EUR10,000,000 Class A2 (XS0305670993) affirmed at 'AAAsf';
     Outlook Stable
  -- EUR51,800,000 Class B (XS0305671298) affirmed at 'AAsf';
     Outlook Stable
  -- EUR51,700,000 Class C (XS0305671454) affirmed at 'BBBsf';
     Outlook Stable
  -- EUR49,100,000 Class D (XS0305672262) affirmed at 'BBsf';
     Outlook Negative
  -- EUR20,300,000 Class E (XS0305672692) affirmed at 'Bsf';
     Outlook Negative
  -- EUR8,700,000 Class F (XS0305672858): not rated
  -- EUR11,400,000 Class G (XS0305673070): not rated
  -- EUR7,683,722 Threshold Amount: not rated

The affirmations reflect the transaction's broadly stable
performance over the past year, combined with the full repayments
of a number of loans, as well as significant amounts of scheduled
amortization.  Both factors have reduced the outstanding
principal balance to EUR351.4 million from EUR492.5 as at Fitch's
last rating action in July 2011 (initial note issuance was EUR1
billion).  All principal proceeds were applied sequentially,
thereby increasing credit enhancement to all subordinated note
classes.

While the reported WA loan-to-value (LTV) has stayed stable at
67% over the past year, the portfolio's weighted average (WA)
vacancy rate has improved to 4.1% from 4.2% at Fitch's last
review (6.9% at closing).  Moreover, the portfolio's WA interest
coverage ratio improved to 4.39x from 3.71x from a year ago.
Despite these improvements, defaulted reference claims on the
reference portfolio have risen to 7.7% of the pool by loan
balance, up from 7.1% a year ago, and are now attributable to 24
loans, up from 16 a year ago.  Fitch believes that the potential
losses from defaulted reference claims are largely offset by the
significant portfolio amortization, which increases credit
enhancement and mitigates the risk of collateral
underperformance, in particular for the senior classes of notes.

In February 2008, Eurohypo AG ('A-'/Stable/'F1') paid the Class
A1 in full for regulatory reasons, by exercising its call option.
The execution of the option does not change the risk profile of
the remaining notes as it did not reduce the balance of the
reference pool on which protection is offered via the issuance.


SOLAR MILLENNIUM: U.S. Court Recognizes German Proceeding
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware recognized
Solar Millennium AG's proceeding pending in the local court of
Furth, Germany, as "foreign main proceeding."

The Court also ordered that all relief afforded to a foreign main
proceeding is granted to the German Proceeding, the Company and
the Petitioners respectively, including, without limitation, the
protections afforded by Section 362 of the Bankruptcy Code.

Volker Bohm, serves as the foreign representative of the Debtor
and as duly authorized foreign representatives as defined by
Section 101(24) of title 11 of the United States Code.

The Court also ordered that, among other things, all persons and
entities are immediately enjoined from (a) commencing or
continuing any legal proceeding or action against the Debtor, its
assets located in the United States, or proceeds thereof; (b)
enforcing any judicial, quasi-judicial administrative or
regulatory judgment, assessment or order or arbitration award
against the Debtor; (c) commencing or continuing any legal
proceeding or action to create, perfect, or enforce any lien,
setoff, or other claim against the Debtor-affiliates

                     About Solar Millennium AG

Solar Millennium AG, is a company based in Germany that operates
value-added chain of solar-thermal power plants.

Rechstanwalt Volker Bohm, the insolvency administrator, says SMAG
commenced insolvency proceedings with a local court in Germany on
Dec. 31, 2011.  The Furth court in February 2012 ascertained that
SMAG is insolvent and over-indebted.

Volker Bohm filed for Chapter 15 protection (Bankr. D. Del. Case
No. 12-11722) on June 4, 2012.  R. Craig Martin, Esq., at DLA
Piper LLP (US) represents the Debtor's restructuring effort.
The Debtor estimated assets at US$50 million to $100 million and
debts at US$100 million to US$500 million.  The Company did not
file a list of creditors together with its petition.

Affiliate Solar Trust of America, LLC previously filed for
separate Chapter 11 petition (Bankr. Case No. 12-11136) on
April 2, 2012.



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H U N G A R Y
=============


MAGYAR TELECOM: S&P Cuts Long-Term Corp. Credit Ratings to 'CCC+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit ratings on Hungary-based fixed-line
telecommunications operator Invitel Holdings A/S and related
entities Magyar Telecom B.V. and HTCC Holdco I B.V. to 'CCC+'
from 'B'.

"We then withdrew the ratings on Invitel Holdings and HTCC Holdco
I. Invitel Holdings was liquidated in the first quarter of 2012,
and we understand that HTCC Holdco I will be liquidated by the
end of 2012. The outlook on Magyar Telecom is negative," S&P
said.

"At the same time, we lowered our issue rating on Magyar
Telecom's EUR350 million senior secured notes due 2016 to 'CCC+'
from 'B')," S&P said.

"The rating action primarily reflects our decision to revise
Magyar Telecom's liquidity profile to "less than adequate" from
"adequate" as defined by our criteria)," S&P said.

"In our view, the group's liquidity could weaken further in the
next six months primarily because we expect meaningful negative
free operating cash flow generation due to continued pressure on
revenues and margins in a challenging macroeconomic, competitive,
and regulatory environment," S&P said.

"As a result, we believe that the group's capital structure could
become unsustainable in the near to medium term, heightening the
risk of a distressed exchange offer)," S&P said.

"In our base-case assessment, we expect group revenues in euro
terms to decline by about 14% in 2012 and 6% in 2013, driven by
continued fierce pressure on revenues denominated in Hungarian
forint, particularly residential voice revenues and, to a lesser
extent, wholesale and business revenues," S&P said.

"In our base-case forecast, we assume a deterioration of the
foreign exchange rate to Hungarian forint (HUF) 300 to the euro
in 2012 and 2013, compared with about HUF279 for full-year
2011)," S&P said.

"In addition, we anticipate reported EBITDA will decline by about
19% to EUR59 million in 2012 primarily due to lower gross profits
and the introduction of a new telecom tax in July 2012. As
result, we  forecast negative free operating cash flow of about
EUR25 million in 2012, down  from negative EUR14 million in 2011,
because we expect continued meaningful  capital spending (EUR45
million in 2011) by the group to sustain its competitive
position)," S&P said.

"Nevertheless, we acknowledge that the group has some flexibility
to reduce its capital spending in the short term to support its
liquidity, if needed)," S&P said.

"The rating on Magyar Telecom reflects our assessment of the
group's financial risk profile as "highly leveraged" and business
risk profile as "weak"," S&P said.

"The negative outlook reflects our view that Magyar Telecom's
liquidity will continue to weaken over the next six months due to
further pressure on revenues and margins," S&P said.



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


TSESNA BANK: S&P Affirms 'B' Long-Term Counterparty Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services had revised its outlook on
Kazakhstan-based Tsesna Bank to stable from negative and affirmed
its 'B' long-term counterparty credit rating on the bank.

"At the same time, we raised the short-term counterparty credit
rating to 'B' from 'C' and the Kazakhstan national scale rating
to 'kzBB+' from 'kzBB," S&P said.

"The rating actions reflect our view of lower pressure on Tsesna
Bank's capital than we anticipated, following a slowdown of loan
growth in the first half of 2012. In addition, we consider the
bank to have maintained better asset quality and a less risky
corporate loan book than peers," S&P said.

"We view positively the reduction of targeted nominal loan growth
to about 25% in 2012 following rapid growth over the past two
years, particularly, a 114% increase in loans in 2011. The bank
estimates that gross loans increased by 14% in the first half of
2012, which was still above the system average. We now believe
that our risk-adjusted capital (RAC) ratio for Tsesna Bank,
before diversification, will remain in the 4%-5% range, which we
consider weak. The risk that this ratio would fall to lower than
3% over the next 12-24 months, a very weak level, in our view, is
low. In addition, we believe Tsesna Bank's stable management
team, recently implemented advanced scoring models, and upgraded
information technology systems should enable it to manage further
growth without a significant deterioration of asset quality," S&P
said.

The bank's nonperforming loans (NPLs; more than 90 days overdue)
represented 3.3% of the loan book, according to regulatory data
as of June 1, 2012. This compares with the system average of 32%,
including restructured banks.

"We do not anticipate that two years of rapid loan growth will
lead to a material deterioration of Tsesna Bank's asset quality
over the next two years. This is owing to: The less risky
composition of Tsesna Bank's large corporate loan book than the
system average, with the borrowers predominantly grain traders,
other trading companies, and companies in the service sector; as
well as Tsesna Bank's low exposure to the construction and real
estate sector (9% at year-end 2011 compared with the system
average of 24%); Lower exposure to the city of Almaty, where the
country's main real estate and credit bubble occurred, which
accounted for about 23% of Tsesna Bank's loans at year-end 2011
compared with about two-thirds of peers' loan books; Low 7% share
of foreign currency loans compared with the system's 44% at year-
end 2011; Prudent lending practice of predominantly granting no
grace periods or bullet repayment of loans; and Shorter loan
terms than peers' (the remaining term of 75% of loans is less
than three years)," S&P said.

The stable outlook reflects our assessment that over the next 12-
24 months Tsesna Bank will display lower loan growth than in 2010
and 2011, preventing a decline in capital ratios. In addition, we
believe asset quality will not worsen materially, and liquidity
will likely stay at current levels.

"We could raise the ratings on the bank if the projected RAC
ratio (before adjustments for diversification) were to
sustainably increase to more than 5% because of higher
shareholder capital injections, higher retained earnings, or
lower growth targets than currently planned," S&P said.

"We could lower the ratings if aggressive loan growth resumed or
if we saw a material deterioration of asset quality that
ultimately weakened the RAC ratio (before adjustments for
diversification) to less than 3%," S&P said.



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


INTERGEN NV: Moody's Reviews 'Ba3' Rating for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service placed the Ba3 rating of InterGen N.V.
senior secured credit facility and notes under review for
possible downgrade.

Ratings Rationale

The rating action reflects the company's exposure to weak
merchant power markets in multiple markets, including the UK and
Australia. The review also factors in the transforming risk
characteristics occurring across the company as the portfolio
appears to be changing from one that had historically been highly
dependent upon contracted cash flows to one that will be far more
reliant on merchant margins. This phenomenon is expected to
become more pronounced beginning in 2013 when firm contracts at
certain portfolio assets begin to expire, if they are not
extended beforehand.

InterGen's Q1 2012 financial performance declined materially from
2011 due to a material decline in distributable cash flow from
its UK operations, the most important market for InterGen, where
most of its major 'Tier I' assets are located. Specifically, the
day-ahead spark spreads in the UK were nearly 50% lower during
the first quarter 2012 than the same 3-month period in 2011,
primarily driven by weak power prices caused by the combination
of a very tepid economy, mild weather, new capacity additions
coming on-line and declining coal prices, which have pushed
natural gas-fired generations further out on the dispatch curve.
To that end, InterGen's three UK plants saw generation fall by a
combined 1,151 GWh in Q1 2012 compared with Q1 2011, even though
availability was higher. This represents a 33.8% decline in
generation in the UK from 3,410 GWh in 1Q2011 to 2,259 GWh in
1Q2012. All of these factors resulted in the UK assets generating
$6 million in distributions to InterGen in Q1 2012, compared with
$47 million in the same period in 2011. Moody's believes that
many of the market factors affecting the merchant power market in
the UK will persist over the foreseeable future, which is a
primary driver in the decision to review InterGen's ratings.

In addition to InterGen's UK challenges, the company 's
Australian assets, all of which are coal-fired generation assets,
did not distribute any cash flow to InterGen in 2011 or Q1 2012,
and remain in a cash trap situation at each of the plant levels.
Also, InterGen's Rijnmond project in the Netherlands entered a
cash trap situation in Q3 2011, which continued during Q1 2012.

On the positive side, from 2007-11, InterGen's financial
performance generally exceeded management's forecasts, primarily
due to better than anticipated merchant energy margins, and the
cash flow benefit from the acquisition of three contracted
operating assets in Mexico. As a result, InterGen's rolling 12-
month debt service coverage ratio (DSCR), as calculated per the
Credit Agreement, has on average measured between 1.60-1.80
times. DSCR for the full-year 2011 measured 1.73 times, while
DSCR for the last twelve months ended March 31, 2012 measured
1.62 times. However, management indicates a range of outcomes for
debt service coverage between 1.60-1.65 times in 2012, and a
wider range of outcomes in 2013, depending on how merchant power
markets in the UK develop for the next eighteen months.

Moody's notes that InterGen's sale of its 45.875% equity interest
in the Quezon facility in the Philippines to the plant's joint-
owner EGCO has been used to substantially reduce outstandings
under the company's Term Loan B, a credit positive. While Quezon
had been a positive cash flow contributor to the portfolio, and
its sale will increase the concentration risk in the UK assets,
the debt reduction will improve InterGen's overall leverage
profile, and mitigate, to some extent, the large refinancing risk
facing InterGen in 2017.

Over the course of the review period, Moody's intends to gain
greater visibility into the forward spark spreads in the UK and
the Netherlands, and forward dark spreads in Australia to assess
their potential impact on InterGen's 2012 and 2013 debt service
coverage ratios and overall credit profile. The review will also
attempt to gain greater clarity around the company strategy to
execute replacement and additional contracts given the shifting
risk spectrum Moody's sees occurring beginning in 2013. The
review will factor in the anticipated role and involvement of
InterGen's owners during these challenging market conditions, and
will attempt to gain a better understanding of the company's
plans for refinancing the very large debt maturity in 2017.

The principal methodology used in this rating was Power
Generation Projects published in December 2008.

The last rating action was on June 28, 2007, when the Ba3 senior
secured rating of InterGen N.V. was assigned.

InterGen N.V. is a holding company with a portfolio consisting of
nine combined cycle natural gas-fired projects and two coal-fired
facilities with a net capacity ownership of 6,101 MW. The eleven
operational plants are located in the UK, the Netherlands,
Mexico, and Australia. InterGen also owns the Bajio and
Libramiento natural gas compression facilities and associated
pipeline located adjacent to the Bajio power project.

InterGen N.V. is owned by affiliates of China Huaneng Group
(CHG), Guangdong Yudean Group (Yudean), and The Ontario Teachers'
Pension Plan Board (OTPPB).


STORK TECHNICAL: Moody's Assigns '(P)B2' CFR; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2
corporate family rating (CFR) and probability of default rating
(PDR) to Stork Technical Services Topco B.V. (STS, or the
company), the ultimate holding company of Stork Technical
Services Holdco B.V. Concurrently, Moody's has also assigned a
(P)B3 rating to Stork Technical Services Holdco B.V.'s proposed
EUR315 million of senior secured notes due 2019. The outlook on
the ratings is negative. This is the first time Moody's has
assigned a rating to Stork Technical Services Topco B.V. and
Stork Technical Services Holdco B.V.

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

Proceeds from the transaction will be used to refinance existing
debt.

Ratings Rationale

"Our assignment of the (P)B2 CFR primarily reflects our view that
STS is exposed to a challenging market environment due to
increasing economic pressure, especially in Europe, the company's
principal market, which represented around 75% of financial year
2011 sales," says Anthony Hill, a Moody's Vice President --
Senior Analyst and lead analyst for STS.

For the financial year ended 2011, STS recorded a 3% decline in
revenue to EUR950 million (excluding RBG Holdings, the UK-based
maintenance service provider acquired by STS in 2011). This
reflects customers' cautiousness in committing to new larger-
scale contracts, as well as weak economic activity resulting in
increased competition for remaining contracts. Moody's expects
the weak macroeconomic environment in Europe to continue to make
trading conditions difficult for STS in the short to medium.

Moody's notes that, whilst benefiting from a well-established
client base, STS holds a relatively low level of customer
diversity, with its top 25 customers representing approximately
48% of its consolidated year-end December 2011 earnings. Whereas
the contractual nature of part of the business helps to ensure
revenue visibility, revenue derived from large one-off projects
is more discretionary in nature. Demand for STS's services in
these types of projects tends to be more exposed to fluctuations
in the economic environment.

However, more positively, the (P)B2 CFR also reflects that, as a
leading provider of asset integrity services, STS holds well-
established positions in Europe, with attractive entry positions
in Americas, Middle East and Asia. STS benefits from the
contractual nature of part of its business and long-lasting
customer relationships (generally between five and 30 years), and
a knowledge of its client base helps to ensure stability to
revenue stream. Moody's also notes positively STS's integration
of RBG Holdings. In the rating agency's view, the corporation
will broaden the service range of STS, giving the company a
stronger footing in oil and gas.

Moody's considers STS to have an adequate liquidity profile given
(1) cash balances post-transaction of EUR20 million; (2) a
committed and largely undrawn revolving credit facility (RCF) of
EUR120 million; and (3) sufficient headroom under covenants,
which Moody's understands will be set with 40% headroom. However,
STS's adequate liquidity is mitigated by Moody's expectation that
(1) the company's cash flow will remain near zero for financial
year ended 2012; and (2) it will utilize approximately EUR40
million of the RCF to replace existing performance guarantees and
surety bonds.

The negative outlook reflects the potential that STS's rating
could experience downward pressure over the coming months as a
result of deterioration in some of its core European markets.

What Could Change The Rating Up/Down

Given the negative outlook, Moody's does not expect upward
pressure on the rating in the near term. However, the ratings
outlook could stabilize if STS were to (1) solidly, and
consistently, generate positive free cash flow; (2) exhibit a
Moody's-adjusted debt/EBITDA ratio of below 4.5x; and (3)
maintain a ratio of Moody's-adjusted EBITDA minus capital
expenditure (capex)/interest expense of 2.0x. Moody's is
primarily concerned about STS's profitability prospects given the
ongoing harsh trading environment. Indeed, a downgrade could
result if STS's profitability profile were to weaken. Other
triggers for a downgrade could include (1) Moody's-adjusted
debt/EBITDA rising above 5.0x; (2) Moody's-adjusted EBITDA minus
capex/interest expense falling below 1.5x; or (3) a weakening
liquidity profile due to, or in addition to, tightening of
covenant headroom.

The principal methodology used in rating Stork Technical Services
Topco B.V. and Stork Technical Services Holdco B.V. was the
Global Business & Consumer Service Industry Rating Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Stork Technical Services Topco B.V., headquartered in the
Netherlands, is a provider of asset integrity services to the oil
and gas, chemical and refining, and power sectors. For the
financial year ended 31 December 2011 STS reported combined
unaudited revenues of EUR1.3 billion.


STORK TECHNICAL: Assigns 'B' Long-Term Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Stork Technical Services Holding B.V.
(STS), which is 100%-owned by Stork B.V. (Stork; not rated).  The
outlook is stable.

"At the same time, we assigned our 'B-' issue rating to STS'
proposed EUR315 million senior secured notes. The recovery rating
on these notes is '5', indicating our expectation of modest (10%-
30%) recovery in the event of a payment default," S&P said.

"The ratings are based on our expectation that the proposed
refinancing of the Stork group will be completed over the coming
weeks, in accordance with the preliminary documentation made
available to us by STS and its majority shareholder, U.K.-based
private equity company Arle Capital Partners Ltd," S&P said.

According to the documentation, the proposed transaction will
result in separate financings for Stork's two operating
subsidiaries, STS and Fokker Technologies Holding B.V. (Fokker).

In addition, the proposed transaction will also enable the
integration into STS of RBG (Holdings) Ltd., acquired by Stork
group in 2011, and, to date, financed outside STS.

"However, while we note that STS and Fokker have their own
defined borrowing groups with some restrictions on cash and asset
movements, we consider that the structure does not meet the
requirements to be considered as a ring-fenced financing under
our criteria," S&P said.

"As a result, we apply our criteria governing the links between
parents and subsidiaries to our ratings on STS, and base our
assessment of its financial risk profile on cash flow adequacy at
the level of its parent company, Stork," S&P said.

"Our analysis therefore includes Fokker's debt (EUR150 million
proposed new term loan) and cash flow generation. The ratings on
STS are primarily constrained by our view of the company's
"highly leveraged" financial profile and our assessment of the
company's financial policy as aggressive, based on several recent
bolt-on acquisitions and STS' private equity ownership. We
understand that Arle mainly financed the Stork group acquisition
through shareholder loans, which now amount to slightly more than
EUR1 billion and sit at the parent company level. Despite our
view that these shareholder loans have certain equity
characteristics, are noncash paying, and subordinated, we treat
these instruments as debt-like, according to our criteria," S&P
said.

"Upon completion of the transaction, we forecast that STS'
Standard & Poor's-adjusted total debt (including Fokker's debt
and debt at the holding companies' level) will be about EUR1.8
billion including shareholder loans. The stable outlook reflects
our view that STS will durably maintain its operating
performance, resulting in credit metrics commensurate with the
current rating," S&P said.

"This entails stable and profitable operations across all of the
company's business segments. In our view, credit metrics
commensurate with the ratings on STS include a cash interest
cover ratio comfortably above 2x and positive discretionary cash
flow.  While we currently see no rating upside in the coming 12
months, we could consider raising the rating over the coming
years if STS were to report an extended, sustainable
strengthening of its operating performance, and stronger credit
metrics.  Although equally unlikely, we could lower the rating if
STS' credit metrics deteriorated following a significant
shortfall in cash flow generation compared with our forecasts,
owing to deterioration in its operating performance.
Additionally, ratings downside could occur if the company were to
adopt a more shareholder-friendly financial policy as a result of
its private-equity ownership," S&P said.



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


* CAPE VERDE: S&P Affirms 'B+/B' Currency Sovereign Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its long-and short-
term foreign and local currency sovereign credit ratings on Cape
Verde at 'B+/B'. The outlook is stable.

The transfer and convertibility assessment is unchanged at 'BB'.

"The ratings on Cape Verde are constrained by our view of the
country's large external and fiscal imbalances, and its
dependency on currently-struggling European economies for trade,
investment, and tourists. The ratings are supported by continued
political stability and the country's moderately strong growth
prospects, S&P said.

Cape Verde's narrow economy has structural external imbalances
that have increased significantly since 2009.

The global slowdown hurt current account receipts, especially
those from tourism, and the government's ambitious investment
program fueled import growth.

Consequently, Cape Verde's current account deficit widened to
about 18% of GDP in 2011.

"However, we expect FDI, official disbursements, and remittances
to continue financing the large trade deficit. We believe the
government will wind down its ambitious stimulus-oriented
investment spending during 2012-15. We also think that efforts to
improve tax collection, including legislation to curb evasion,
should bear fruit," S&P said.

"Consequently, we expect a reasonably brisk drop in the general
government deficit to 3.0% of GDP by 2015 from 7.9% in 2011.
However, if economic growth is weaker than we currently project,
we believe the authorities will allow the deficit to widen
further to stimulate demand," S&P said.

The general government debt burden has grown rapidly in recent
years.

"We estimate gross general and central government debt at 68% and
78% of GDP, respectively, in 2011. (General government debt nets
out social security fund holdings of central government debt.)
Although the debt stock is very large relative to the size of the
economy, the terms are favorable and the maturity structure is
long," S&P said.

"We expect recent infrastructural investment and the expected
eventual pick-up in demand from Cape Verde's major European
trading partners, Spain and Portugal, to lead to faster economic
growth and increased government revenues in the medium term," S&P
said.

"We anticipate this will lower general government debt to GDP.  A
track record of political stability and good relations with
donors paves the way for the government's investment plans to
improve Cape Verde's competitiveness. In particular, investment
in alternative energy sources and agriculture could reduce the
country's high dependency on oil and food imports, which in turn
could strengthen its fiscal and external positions over the
medium-to-long term," S&P said.

The long-standing peg of the Cape Verde escudo to the euro is
supported by a bilateral agreement with the Portuguese government
allowing currency conversion.

"Despite its fiscal difficulties, we expect the Portuguese
government will maintain the existing arrangements. This helps
anchor investor expectations, which we view as a positive rating
factor. We expect Cape Verde to retain the support of donors,
although its transition to middle-income status, probably by
2013, will reduce its access to the most concessional funding,"
S&P said.

"Despite having declined rapidly in recent years, unemployment
remains high at more than 10%. It now poses an obstacle to
private sector development and to growth prospects, given
existing skill mismatches. In the short term, if European growth
were to falter this could significantly limit Cape Verde's growth
given its close economic links to Europe," S&P said.

"The stable outlook reflects our view that the risks posed by the
troubled external environment, the wide twin deficits, and high
debt stock are balanced by continued political stability and
moderately strong economic growth prospects," S&P said.

"Despite fiscal austerity in Europe, we expect Cape Verde will
continue to receive donor support.  We could consider lowering
the ratings if we see weaker-than-currently-expected economic
growth, fiscal consolidation, or external liquidity improvements.
The ratings could also come under downward pressure if financing
the large current account deficits is significantly impaired,"
S&P said.

"Conversely, we could raise the ratings if economic growth
exceeds our current expectations, or if efforts to improve tax
collection and reduce current and capital spending surpass our
forecasts, leading to quicker- and stronger-than-anticipated
fiscal consolidation," S&P said.



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


ALFA-BANK OJSC: S&P Affirms 'BB/B' LT Counterparty Credit Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Russia-
based OJSC Alfa-Bank to positive from stable.

The 'BB' long-term and 'B' short-term counterparty credit
ratings, as well as the 'ruAA' Russia national scale rating were
affirmed.

"The outlook revision reflects our view of the bank's improving
asset quality, demonstrated in a decrease in nonperforming loans
and credit costs since 2010. Alfa-Bank's track record of working
out problem loans, effective collection, and prudent risk
management positively distinguishes it from domestic peers," S&P
said.

"We continue to assess Alfa-Bank's risk position as "moderate,"
as defined in our criteria, but may revise it to "adequate" if
the bank's nonperforming loan  metrics and growth in reserves
coverage remain better than the industry average. This is
supported by the bank's capabilities in working out problematic
loans," S&P said.

"In our view, this sustained improvement would mitigate the
bank's high and above-system-average single-party concentration
in its loan portfolio and its foreign currency exposure," S&P
said.

Alfa-Bank's asset quality mirrored that of the entire Russian
banking system throughout 2009.

The rebound of loan quality in 2010 and 2011, however, has been
faster than the overall market, due in part to Alfa-Bank's more
aggressive loan collection measures.

Importantly, the absolute amount of  nonperforming assets has
halved since the peak in 2009 and the ratio of  problem loans
(including loans overdue by more than one day and loans not past
due with signs of impairment) went down to about 5% in 2011 from
7.5% in 2010.

"Our base-case scenario forecasts a continuation of this positive
trend, although at a slower pace than in 2011. Alfa-Bank's credit
loss track record is superior to that of peers': Its new loan
loss provisions were 0.6% of customer loans in 2011, compared
with 2% on average for the main domestic peers," S&P said.

"Despite these positive elements, we continue to monitor very
closely other types of risks embedded in Alfa-Bank's balance
sheet," S&P said.

Standard & Poor's bases its ratings on Alfa-Bank on its 'bb'
anchor for banks  operating predominantly in Russia, as well as
its view of Alfa-Bank's "adequate" business position, "moderate"
capital and earnings, "moderate" risk  position, "average"
funding, "adequate" liquidity, and "moderate systemic
importance" in Russia.

Alfa-Bank and its affiliated companies, including  Amsterdam
Trade Bank (not rated), are owned by ABH Financial Ltd.(ABHFL), a
limited liability company registered in the Republic of Cyprus.

"The positive outlook reflects that we could raise our ratings on
Alfa-Bank if its risk position continues to improve, demonstrated
by a track record of credit costs and nonperforming loans below
the sector average, as well as moderate loan growth," S&P
said.

"We anticipate that the bank can sustain lower credit losses than
peers, gradually reducing problem loans from slightly more than
5% in 2011.  We also forecast that Alfa-Bank's balance sheet will
expand at a nominal 15%-20% annually in 2012 and 2013, showing
retained earnings at least equivalent to those of 2011," S&P
said.

"We could revise our risk position assessment to "adequate" and
raise the ratings if these projections were to materialize," S&P
said.

In our view, Alfa-Bank's sustained outperformance relative to
peers in managing problem loans, underwriting, and the average
credit quality of counterparties could offset other areas of
risk, namely concentration risks in the loan book and foreign
currency exposure.

"We consider that both risks will remain at least at the existing
levels in the future," S&P said.

The ratings would come under pressure if the operating
environment in Russia worsened, or if the observed improvement in
asset quality reversed over the medium term.

Any further increase in already high concentration risk would
also put pressure on the ratings, neutralizing the positive
rating outlook.


FREIGHT ONE: S&P Cuts Corporate Credit Ratings to 'BB+/B'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long- and short-
term corporate credit ratings on Russia-based rail freight
operator Freight One (JSC) to 'BB+/B' from 'BBB-/A-3'.

"At the same time, we removed the ratings from CreditWatch, where
they were placed with negative implications on April 3, 2012. The
outlook is negative," S&P said.

"In addition, we affirmed the Russia national scale rating on
Freight One at 'ruAA+' and removed it from CreditWatch negative,"
S&P said.

"The downgrade reflects our reassessment of Freight One's
financial risk profile, which we now analyze in the context of
the consolidated UCL Rail B.V. group, Freight One's majority
shareholder," S&P said.

"This is because we believe UCL Rail will likely use Freight
One's cash flows to service its debt obligations," S&P said.

UCL Rail's financial debt includes a loan of Russian ruble (RUB)
75 billion at its subsidiary The Independent Transportation
Company (TITC), which it raised to acquire Freight One.

"According to our criteria, when analyzing a subsidiary we
consider the financial risk profile in the context of its parent.
As a consequence, we believe that the credit metrics for the
consolidated UCL Rail  group are not commensurate with the
previous 'BBB-' rating on Freight One," S&P said.

"Our 'BB+' rating on Freight One continues to reflect its
business risk profile, which we assess as "fair." We anticipate
that Freight One will continue to be a market leader in the
Russian rail freight industry, owing to its large size and market
presence, and that it will realize synergies with its new
majority shareholder," S&P said.

The company has a well-diversified customer base and an extensive
area of operations.

These strengths are partially offset by the uncertainty created
by ongoing market liberalization, revenue volatility associated
with the rail freight business, and the significant investments
that Freight One expects to make in the medium term.

"In our view, we could lower the rating on Freight One if the UCL
Rail group's consolidated debt increases to the extent that
adjusted debt to EBITDA rises to more than 2x on a combined
basis. This could occur, for example, as a result of further
large debt-funded acquisitions (including UCL Rail acquiring the
remaining 25% stake in Freight One from Russian Railways)," S&P
said.

"Further downward pressure on the rating may also occur if
Freight One fails to achieve the improvements we anticipate in
growth and operating margins. A downgrade would also be possible
if the company's discretionary cash flow remains at levels we
consider to be significantly negative for more than two years,"
S&P said.

"We would consider revising the outlook to stable if in our view
Freight One achieves better business growth and EBITDA margins
than we currently anticipate, leading to quicker deleveraging,
while at the same time keeping a conservative debt-financed
investment policy.  We could also revise the outlook to stable if
we believe that UCL Rail will not acquire the remaining stake in
Freight One, or if post-acquisition debt to EBITDA remains at
less than 2x -- due to a significant equity contribution, for
example," S&P said.


FUNDSERVICEBANK: Moody's Cuts LT National Scale Rating to 'Ba2'
---------------------------------------------------------------
Moody's Interfax Rating Agency has downgraded the long-term
National Scale Rating (NSR) of Fundservicebank to Ba2.ru from
Baa2.ru.

The rating action on Fundservicebank concludes the review
initiated by Moody's Interfax on March 20, 2012, when the bank's
NSR was placed on review for downgrade following public comments
made by officers of the Russian Interior Ministry's Main Economic
Security Department alleging that the bank's employees were
involved in illegal banking activities.

The rating action on Fundservicebank is based on the bank's
audited financial statements for 2011 prepared under IFRS, and
its unaudited results for the first five months of 2012 prepared
under Russian Accounting Standards (RAS).

Ratings Rationale

Moody's Interfax rating action on Fundservicebank is driven by
the bank's fundamental weaknesses as reflected in its financial
metrics, particularly a very low capital buffer against
substantial related-party loans (3x the bank's Tier 1 capital at
year-end 2011), its pressured asset quality and a highly
concentrated funding base. As at June 1, 2012, the bank reported
a low statutory capital adequacy (N1) ratio of 11.1%, which
represented a decrease from 12.2% at year-end 2011.

Moody's Interfax expresses concern about the quality of
Fundservicebank's loan book: in 2011, for 12% of the bank's total
loans interest payments that had been accrued were not received
in cash (2010: 9%). In Moody's opinion, this raises concerns
about the potential deterioration of Fundservicebank's loan book.
Moody's considers the level of loan loss reserves of 7.5% of
gross loans -- as reported at year-end 2011 -- to be
insufficient, and the rating agency does not rule out the
possibility that further credit losses may crystallize. Taking
into account the significant credit risk concentrations on
Fundservicebank's loan book (the top 20 loan exposures together
accounted for 3.9x total capital at year-end 2011), the rating
agency cautions that the bank's already thin capital cushion may
come under further pressure from either a general deterioration
of asset quality metrics and/or a default of any major borrower.

The rating agency also cautions about the high level of
concentration in Fundservicebank's customer deposit base which
renders the bank vulnerable to potential sizeable outflows of
funds: as of 1 May 2012, the largest depositor accounted for one
third of total customer funding. Moody's Interfax notes that
Fundservicebank's sizeable liquidity cushion enabled the bank to
withstand a 9% decline in customer deposits in the period from
March 1, 2012 to June 1, 2012, which, in Moody's view, was
partially driven by the negative publicity associated with the
police allegations. Although the bank appears to have weathered
the unfavourable conditions, credit challenges stemming from
potential reputational risks in the future cannot be ruled out.

According to the documentation provided by the bank to Moody's,
the regulatory authorities have not found any evidence of
involvement of Fundservicebank's employees into the illegal
banking activities.

What Could Change The Rating Up / Down

Fundservicebank's NSR has limited upside potential at present. In
the longer term, upward pressure could be exerted on the bank's
NSR as a result of a material enhancement of the bank's
capitalisation level coupled with (i) improved diversification of
the loan book and customer deposit base, and (ii) material
reduction in the level of related-party exposures.

Fundservicebank's NSR could face downward pressure in case of a
significant decrease in the liquidity buffer (for instance, if
deposit outflow recurs following another negative publicity
event) or a substantial and ongoing deterioration of the bank's
asset quality and/or profitability metrics. Negative pressure
would also be exerted on the bank's NSR following any evidence of
further substantial increase in related-party lending and/or
credit risk concentrations.

Principal Methodologies

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

Headquartered in the Moscow, Russia, Fundservicebank reported
(under audited IFRS) total assets of RUB66.5 billion (US$2.1
billion) and total equity of RUB6 billion (US$187 million) as at
year-end 2011; over the same period, the bank posted net IFRS
income of RUB 1.7 billion (US$52 million). As at June 1, 2012,
Fundservicebank's total assets amounted to RUB58 billion (US$1.8
billion) under unaudited Russian Accounting Standards (RAS).

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

About Moody's and Moody's Interfax

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


FUNDSERVICEBANK: Moody's Lowers BFSR to 'E'; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has downgraded the standalone bank
financial strength rating (BFSR) of Fundservicebank to E, mapping
to a standalone credit assessment of caa1, from E+ (formerly
mapping to b3). Concurrently, Fundservicebank's long-term global
local and foreign currency deposit ratings were downgraded to
Caa1 from B3. The bank's Not Prime short-term rating was
affirmed. The outlook on all long-term ratings is stable.

The rating action on Fundservicebank concludes the review
initiated by Moody's on March 20, 2012, when the bank's BFSR and
long-term global local and foreign currency deposit ratings were
placed on review for downgrade, following public comments made by
officers of the Russian Interior Ministry's Main Economic
Security Department alleging that the bank's employees were
involved in illegal banking activities.

Moody's rating action on Fundservicebank is based on the bank's
audited financial statements for 2011 prepared under IFRS, and
its unaudited results for the first five months of 2012 prepared
under Russian Accounting Standards (RAS).

Ratings Rationale

Moody's rating action on Fundservicebank is driven by the bank's
fundamental weaknesses as reflected in its financial metrics,
particularly a very low capital buffer against substantial
related-party loans (3x the bank's Tier 1 capital at year-end
2011), its pressured asset quality and a highly concentrated
funding base. As at June 1, 2012, the bank reported a low
statutory capital adequacy (N1) ratio of 11.1%, which represented
a decrease from 12.2% at year-end 2011.

Moody's expresses concern about the quality of Fundservicebank's
loan book: in 2011, for 12% of the bank's total loans interest
payments that had been accrued were not received in cash (2010:
9%). In Moody's opinion, this raises concerns about the potential
deterioration of Fundservicebank's loan book. Moody's considers
the level of loan loss reserves of 7.5% of gross loans -- as
reported at year-end 2011 -- to be insufficient, and the rating
agency does not rule out the possibility that further credit
losses may crystallise. Taking into account the significant
credit risk concentrations on Fundservicebank's loan book (the
top 20 loan exposures together accounted for 3.9x total capital
at year-end 2011), the rating agency cautions that the bank's
already thin capital cushion may come under further pressure from
either a general deterioration of asset quality metrics and/or a
default of any major borrower.

The rating agency also cautions about the high level of
concentration in Fundservicebank's customer deposit base which
renders the bank vulnerable to potential sizeable outflows of
funds: as of May 1, 2012, the largest depositor accounted for one
third of total customer funding. Moody's notes that
Fundservicebank's sizeable liquidity cushion enabled the bank to
withstand a 9% decline in customer deposits in the period from
March 1, 2012 to June 1, 2012, which, in Moody's view, was
partially driven by the negative publicity associated with the
police allegations. Although the bank appears to have weathered
the unfavourable conditions, credit challenges stemming from
potential reputational risks in the future cannot be ruled out.

According to the documentation provided by the bank to Moody's,
the regulatory authorities have not found any evidence of
involvement of Fundservicebank's employees into the illegal
banking activities.

What Could Change The Ratings Up / Down

Fundservicebank's ratings have limited upside potential at
present. In the longer term, upward pressure could be exerted on
the bank's BFSR and long-term global scale deposit ratings as a
result of a material enhancement of the bank's capitalisation
level coupled with (i) improved diversification of the loan book
and customer deposit base, and (ii) material reduction in the
level of related-party exposures.

Fundservicebank's deposit ratings could face downward pressure in
case of a significant decrease in the liquidity buffer (for
instance, if deposit outflow recurs following another negative
publicity event) or a substantial and ongoing deterioration of
the bank's asset quality and/or profitability metrics. Negative
pressure would also be exerted on the bank's ratings following
any evidence of further substantial increase in related-party
lending and/or credit risk concentrations.

Principal Methodologies

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

Headquartered in the Moscow, Russia, Fundservicebank reported
(under audited IFRS) total assets of RUB66.5 billion (US$2.1
billion) and total equity of RUB6 billion (US$187 million) as at
year-end 2011; over the same period, the bank posted net IFRS
income of RUB 1.7billion (US$52 million). As at June 1, 2012,
Fundservicebank's total assets amounted to RUB58 billion (US$1.8
billion) under unaudited Russian Accounting Standards (RAS).



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


AYT FONDO EOLICO: Moody's Cuts Ratings on Two Note Classes to Ba3
-----------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Baa3 the
ratings of the Series E1 and E2 notes issued under the AyT Fondo
Eolico, FTA program (AyT Fondo Eolico) and maintained them on
review for downgrade. This action follows the downgrade of the
notes' guarantor, NCG Banco S.A..

The affected ratings are:

    EUR7.7M E1 Notes, Downgraded to Ba3 and Remains On Review for
Possible Downgrade; previously on Feb 13, 2012 Downgraded to Baa3
and Remained On Review for Possible Downgrade

    EUR7.6M E2 Notes, Downgraded to Ba3 and Remains On Review for
Possible Downgrade; previously on Feb 13, 2012 Downgraded to Baa3
and Remained On Review for Possible Downgrade

Ratings Rationale

The rating action follows Moody's downgrade to B1 from Ba1 of the
senior unsecured debt rating of NCG Banco on June 25, 2012. The
rating of NCG Banco remains on review for downgrade.

As Moody's analysis of the likelihood of payments under the notes
primarily relies on a guarantee from NCG Banco, the ratings of
the notes have been fully linked to those of the bank itself. In
2008, however, the guarantor strengthened its collateral
guarantee in making cash deposits (for about a third of the
outstanding balance of each class of notes). The cash deposits
are currently held at the paying agent Confederacion Espanola de
Cajas de Ahorro (CECA; Ba1/NP, on review for downgrade).

Moody's rating methodology takes into account the joint benefit
of the guarantee and of the cash deposits. The rating agency
assumes a default probability for the notes that is consistent
with the rating of the guarantor but currently includes in its
recovery assumption the benefit of the cash deposit, in addition
to a claim on the guaranteeing bank for the residual amount of
the principal. As a result, Moody's currently rates the notes one
notch above the rating of the guaranteeing bank. Moody's notes
that the benefit coming from the cash deposit may reduce, as the
rating of CECA, which holds this deposit, is being lowered.
According to the documentation, remedial action should take place
following the downgrade of CECA below P-1. Moody's will monitor
the implementation of any remedial action as part of the rating
review.

Moody's further review for downgrade will consider the conclusion
on the bank's rating review as well as the benefit given to the
cash deposit depending on the remedial action on the deposit
account.

THE TRANSACTION

AyT Fondo Eolico represents the securitization of loans granted
for the purpose of developing different Eolic projects in the
region of Galicia. These projects are established under the
Galician Eolic Plan, "Plan Eolico Estrategico", which has been
approved by the Galician government to promote the development of
Eolic parks within the region of Galicia.

The transaction features a guarantee from NCG Banco on any
principal payments due on the loans. NCG Banco also guarantees
the portion of interest that does not depend on the turnover of
the debtor. However, there is no guarantee that bondholders will
receive the variable amount (2.75% of turnover) of interest they
are entitled to.

Moody's ratings do not address the timely payment of this portion
of interest, but only the: (i) timely payment of interest accrued
at the reference index plus 25 basis points (bps); and (ii)
payment of principal at final legal maturity of the notes (in
November 2014 and December 2016, respectively). Moody's ratings
address only the credit risks associated with the transaction.

No cash flow analysis or stress scenarios have been conducted as
the rating was directly derived taking into account the joint
benefit of the guarantee and of the cash deposits.

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


CIRSA GAMING: S&P Alters Outlook on 'B+' CCR to Negative
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Spanish
gaming company Cirsa Gaming Corp. S.A. to negative from stable.

At the same time, we affirmed our 'B+' long-term corporate credit
rating on Cirsa.

"We are also affirming our 'B+' issue rating on the senior
unsecured notes issued by subsidiary Cirsa Funding Luxembourg
S.A. The recovery rating on these notes remains unchanged at '4',
indicating our expectation of average (30%-50%) recovery for
noteholders in the event of payment default, ," S&P said.

The rating action reflects our view that Argentina's
deteriorating economy and the government policies enacted since
October 2011 could adversely affect Cirsa's Argentine operations.

The conditions could also affect the group's ability to
repatriate cash from these, which would in turn weaken liquidity.

"In particular, we observe tightening control and limitations on
cash flow  repatriation for foreign companies, rising
restrictions to international trade, and a possible trend toward
nationalization of privatized industries, as seen during the
recent nationalization of YPF S.A., the Argentine unit of  Spain-
based integrated oil and gas company Repsol S.A," S&P said.

Consequently, we think that the increasing risks to Argentina's
economy, including high inflation, import restrictions, and other
actions that have also contributed to the emergence of a parallel
foreign exchange market, could be a mild constraint on Cirsa's
earnings in Argentina.

The group generates about 25% of its consolidated EBITDA in
Argentina.

"In our base-case scenario, we don't factor in the risk of
expropriation of foreign owned gaming operations in Argentina,"
S&P said.

"The negative outlook reflects our view that any significant
macroeconomic and political deterioration in Argentina is likely
to weigh on Cirsa's earnings and liquidity in the next 12 to 24
months.  We could lower the ratings on Cirsa if liquidity
significantly weakened from current levels, either because of
further restrictions on repatriating cash flows from Argentina,
if the group fails to maintain capex discipline, or if trading
conditions weakened more than we currently anticipate.  We could
also lower the ratings if adjusted debt to EBITDA exceeded 4.5x
or if adjusted EBITDA interest cover went below 2.5x," S&P said.

"In addition, we could consider a downgrade if we were to
anticipate a material risk of nationalization of gaming
businesses in Argentina.  At this stage, a revision of the
outlook to stable would hinge on our reassessment of Cirsa's
liquidity to adequate and on stabilization of the Argentine
political and economic environment," S&P said.


CODERE SA: S&P Cuts Long-Term Corporate Credit Rating to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Spain-based gaming company Codere S.A.
to 'B-' from 'B'. The outlook is negative.

"At the same time, we revised the recovery rating on the senior
unsecured notes  issued by subsidiary Codere Finance (Luxembourg)
S.A. to '4' from '3', indicating our expectations of average
(30%-50%) recovery for noteholders in  the event of payment
default," S&P said.

"We also lowered our issue rating on these notes to 'B-' from
'B', in line with the corporate credit rating on Codere," S&P
said.

"The downgrade reflects our view that Argentina's deteriorating
economy and government policies enacted since October 2011,
including tightening control and limitations on cash flow
repatriation for foreign companies, as well as rising
restrictions to international trade, could affect Codere's
liquidity and, ultimately, its credit quality," S&P said.

"We believe that the increasing risks to  Argentina's economy,
including high inflation (which has appreciated the real
exchange rate), import restrictions, and other actions that have
also contributed to the emergence of a parallel foreign exchange
market, could cause a decrease in Codere's earnings," S&P said.

"The group relies heavily on its earnings from Argentina, which
totaled about 55% of group consolidated EBITDA in 2011.  The
downgrade also takes into account our concerns about Codere's
ability to refinance its EUR120 million senior credit facility
maturing in June 2013, if the group faced a pronounced worsening
in the economic and political conditions in Argentina over the
next 12 months. We would view Codere's continuous access to its
facility, which is subject to financial covenants, as critical
under such a scenario," S&P said.

"In our base-case scenario, we don't factor in the risk of
expropriation of foreign owned gaming operations in Argentina,"
S&P said.

"The negative outlook mainly reflects our view that any further
significant macroeconomic and political deterioration in
Argentina over the next 12 to 24 months could adversely affect
Codere's earnings and liquidity during the period. Given the
current conditions in Argentina, we think it's particularly
critical that Codere keeps a tight rein on investment spending,"
S&P said.

"We could lower the ratings on Codere if we perceived marked
weakening in its liquidity from current levels, either owing to
the inability to satisfactorily refinance its upcoming senior
credit facility maturity, further restrictions on cash flow
repatriation from Argentina, increased foreign exchange controls,
or if covenant headroom were to materially tighten. We could
further lower the ratings if our adjusted ratio of Codere's
EBITDA interest cover were to go below 2.0x. We could also
consider a downgrade if we were to anticipate a material risk of
nationalization of gaming businesses in Argentina," S&P said.

A revision of the outlook to stable depends largely on Codere's
successful refinancing of its senior credit facility and the
maintenance of adequate covenant headroom over the next 12 to 24
months.


GRIFOLS: Moody's Raises CFR to 'Ba3'; Outlook Positive
------------------------------------------------------
Moody's Investors Service has upgraded to Ba3 Grifols' Corporate
Family Rating and to Ba2 its senior secured and to B2 the senior
unsecured ratings to bank and bond instruments respectively. The
outlook on the ratings is positive.

Ratings Rationale

The rating action reflects the significant progress made by the
Company in achieving planned synergies from the acquisition of
Talecris Biotherapeutics Holding Corp., which was announced in
June 2010 and completed in June 2011. Prepayments of around USD
240 million in February 2012 as part of the refinancing of its
senior debt, which further reduced financing costs and strong
double digit organic growth in both sales and EBITDA as reported
in first quarter 2012 have allowed to reduce gross leverage
(measured as Debt/EBITDA) towards 4.0x and improved cash interest
cover to 3.3x (EBIT/Interest, both figures based on Moody's
adjusted pro-forma figures). The conservative financial policy of
the company, as evidenced by the decision not to payout a
dividend in 2012 is also supporting the upgrade.

The Ba3 CFR of Grifols incorporates: (i) the company's increased
scale, with a high degree of vertical integration and the solid
market position of the combined group; (ii) the numerous barriers
to entry to the plasma derivatives market including, but not
limited to, a high degree of capital-intensiveness and regulatory
constraints; (iii) favorable market dynamics, with growth to come
from emerging markets, earlier and enhanced diagnosis of
patients, and line extensions of existing products; and (iv) a
significant potential for synergies to be generated and progress
achieved thus far as well as commitment to further debt reduction
as a primary use for free cash flow generated.

These positive rating drivers are balanced by: (i) Grifols'
reduced but still elevated levels of leverage; (ii) the company's
narrow diversification, with plasma-derived products being its
main activity, and its corresponding vulnerability with regard to
market imbalances and negative pricing movements; and (iii)
Moody's view of potential high impact of safety risks relating to
product contamination, with, however, relatively low probability.

The positive outlook incorporates Moody's assumption that Grifols
will continue to improve its leverage, driven by both further
improving EBITDA and continued reduction in gross indebtedness.
Although Moody's expects the pace of deleveraging from increasing
EBITDA to slow down going forward, there still remains a
considerable synergies potential to be realized with Grifols
recently increasing its guidance for total synergies from US$230
million to US$300 million by 2015/16. Furthermore, Moody's
expects that significant free cash flow generated would be used
to reduce gross debt via prepayment in line with company's
guidance to target leverage levels of 2-2.5x (reported net
Debt/adjusted EBITDA). Cash generation benefits not only from
lower financing costs, but also from declining levels of capital
expenditures which are supported by large investments already
made in previous years. Moody's would expect that a possible
resumption of dividend payments in 2013 would not preclude a
material reduction of debt ahead of scheduled amortization going
forward.

Following the 2012 refinancing, Grifols' financing package now
consists of around US$3.0 billion of senior secured facilities
(including an undrawn revolver of around US$200 million) and
US$1.1 billion senior unsecured notes due 2018. The notes benefit
from the same pari-passu ranking guarantees but are subordinated
to the secured debt which additionally benefits from first
priority pledges over the majority of tangible and intangible
assets of the combined group.

An upgrade of the corporate family rating to Ba2 could be
considered if Grifols' leverage trends toward a Debt/EBITDA of
3.25x, also assuming a continued conservative financial policy
and the ability of Grifols to generate positive free cash flows
on a sustainable basis. The positive outlook assumes that Grifols
will achieve these levels within the next 15-18 months. Downward
pressure could arise if the company's leverage increases over
4.0x and/or CFO/Debt falls significantly below 15% on a sustained
basis. Likewise, a weakening liquidity position, including
tighter headroom under the company's financial covenants could
lead to downward pressure.

The methodologies used in these ratings were Global Medical
Products & Device Industry published in October 2009, and Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Based in Barcelona, Spain, Grifols is a global healthcare company
with 2011 reported revenues of EUR1.8 billion (pro-forma over
EUR2.6 billion based on current trading). The company operates
through three main divisions: Bioscience, Diagnostics and
Hospital. Bioscience, which accounted for approximately 85% of
Grifols' 2011 revenues, focuses on the development,
manufacturing, marketing and distribution of a broad range of
blood plasma-derived products. These products are used for the
treatment of chronic and acute conditions, such as immune system
deficiencies, neurological diseases, bleeding diseases, burns and
major surgery. Grifols is the no. 3 player in the global plasma
derivatives market, which is worth approximately US$12 billion.
The company is listed on the Madrid Stock Exchange and is in the
IBEX 35 Index and in NASDAQ via ADR's.


LN PLUS: Files for Bankruptcy in Spain
--------------------------------------
Mark Lee at Bloomberg news reports that LN PLUS IBEROAMERICA
S.L., Li Ning's licensee, filed for bankruptcy in Spain.

According to Bloomberg, Li Ning will focus on China, while
contribution from Spain is "minute".

Li Ning, Bloomberg says, is "actively assisting" LN PLUS to
resolve issues.


* SPAIN: EU Finance Ministers Agree on EUR30-Bil. Bank Bailout
--------------------------------------------------------------
BBC News reports that eurozone finance ministers have agreed to
lend Spain EUR30 billion (GBP24 billion; US$37 billion) this
month to help its troubled banks.

It will be the first installment of a bailout of up to EUR100
billion, which was agreed in June, BBC notes.

The ministers will need to get approval from their own
parliaments and hope to make the payment by the end of July, BBC
says.

According to BBC, the eurozone finance ministers also agreed to
extend the 2013 deadline for Spain to cut its budget deficit to
the EU limit of 3% by one year.

The exact amount that Spain needs for the bailout of its banks
may not be known until September, BBC discloses.



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


SUNRISE COMMS: Fitch Affirms 'BB-' LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has affirmed Sunrise Communications Holdings S.A.'s
(Sunrise) Long-term Issuer Default Rating (IDR) at 'BB-' with a
Stable Outlook.  Fitch has also assigned an expected instrument
rating of 'BB(EXP)' to the senior secured fixed and floating rate
notes to be issued by Sunrise Communications International S.A
and to the senior secured RCF borrowed by Sunrise Communications
AG, and affirmed the existing senior secured notes and senior
notes at 'BB' and 'B', respectively.

The affirmation reflects Sunrise's recently announced refinancing
of the existing senior secured credit facilities through the
issuance of new senior secured fixed and floating rate notes due
in 2017.  Fitch believes the transaction will have a neutral
impact on the company's credit profile, with both free cash flow
(FCF) and de-leveraging expected to remain in line with the
agency's previous expectations.  The refinancing is also likely
to improve Sunrise's financial flexibility by extending the debt
maturity profile as well as increasing the amounts available
under the senior secured RCF.  Fitch has not considered any
shareholder-related distribution or acquisitions in its analysis,
although the agency notes that the less restrictive covenant
structure arising from the repayment of bank debt could lead to a
more aggressive financial strategy over the medium term.

The agency remains concerned about the increased competition
within the Swiss telecoms industry following Swisscom's more
aggressive mobile tariff strategy, which could put pressure on
Sunrise's revenues and EBITDA margins.  Fitch also believes
competitive pressures in the mobile segment could be further
exacerbated by a reaction from number-three player Orange,
despite its different market positioning towards the high value
segment of the mobile market.

Downside pressure on the ratings could be exerted if the company
underperformed Fitch's expectations, with failure to reduce
leverage below 4.5x on FFO adjusted net basis over the next one
to two years as well as FFO interest cover falling below 2.75x.
In view of the company's projected leverage profile, an upgrade
is unlikely in the near term.  However, a decrease in FFO
adjusted net leverage at a sustained level well below 4.0x could
place upward pressure on the ratings, as well as an increase in
FFO interest cover above 4.0x.

The notching differential between the IDR and the senior secured
instrument ratings reflects the large amount of outstanding
senior secured debt, with gross senior leverage above 3.0x at
December 2011.  Any upside in the notching of the instrument
ratings will be conditional upon Sunrise repaying a material
amount of senior debt.  Although the refinancing transaction
envisages the application of some of the company's available cash
in the prepayment of senior secured debt, Fitch considers this
not material enough to warrant an increase in the notching
differential.


SUNRISE COMMUNICATIONS: S&P Rates CHF400MM Sr. Sec. Notes 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services it assigned its 'BB-' issue
rating to the proposed Swiss franc (CHF) 400 million-equivalent
senior secured floating-rate notes and proposed CHF465 million
senior secured fixed-rate notes (including a tap issue), both
maturing 2017, to be issued by Sunrise Communications
International S.A.

Sunrise Communications International is the financing entity of
Sunrise Communications Holdings S.A., the second-largest
telecommunications services provider in Switzerland.

"The recovery rating on the proposed notes is '2', indicating our
expectation of substantial (70%-90%) recovery in the event of a
payment default. At the same time, we affirmed our 'BB-' issue
rating on Sunrise Communications International's existing senior
secured notes. The recovery rating on these notes is unchanged at
'2'," S&P said.

The rating actions follow the announcement by Sunrise
Communications Holdings of its proposed senior secured floating-
rate and fixed-rate note issues, including a tap issue.

"It is our understanding that the proceeds of the notes, along
with cash, will be used to repay Sunrise Communications'
outstanding senior secured term loans.  The senior secured notes
benefit from a security package that includes pledges over the
shares in Sunrise Communications, TelCommunications Services AG,
and Business Sunrise Enterprise Solutions GmbH, as well as
pledges over receivables and bank accounts," S&P said.

"We understand that network assets are not pledged. In addition,
we understand that the group's CHF250 million revolving credit
facility (RCF) ranks pari passu with the senior secured notes,"
S&P said.

Recovery Analysis

"We value Sunrise on a going-concern basis, taking into account
the group's established brand and positions in the fixed-line
broadband and mobile telephony markets, valuable network, broad
customer base, and relatively high  barriers to entry into a
consolidated industry. To calculate recovery prospects, we
simulate a default scenario. We project a hypothetical default in
2016, at which point we estimate that EBITDA will have declined
to about CHF340 million. We value Sunrise at about CHF1.67
billion, from which we deduct priority liabilities of about
CHF170 million, primarily comprising administrative costs,
finance leases, and pension liabilities," S&P said.

This leaves about CHF1.5 billion for the senior secured lenders.

"We envisage about CHF1.98 billion of senior secured debt
(including six months' worth of prepetition interest) outstanding
at the point of default. This includes a fully drawn CHF250
million RCF. We forecast substantial (70%-90%) recovery prospects
for the senior secured lenders, equating to a recovery rating of
'2'. However, we estimate negligible (0%-10%) value remaining for
the subordinated noteholders, resulting in a recovery rating of
'6'," S&P said.

Ratings List
New Rating

Sunrise Communications International S.A.
Senior Secured Debt(1)                 BB-
  Recovery Rating                       2

Ratings Affirmed

Sunrise Communications Holdings S.A.
Subordinated Debt(2)                   B-
  Recovery Rating                       6

Sunrise Communications International S.A.
Senior Secured Debt(1)                 BB-
  Recovery Rating                       2

Skylight S.a.r.l
Senior Secured Debt                    BB-
  Recovery Rating                       2



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


BADGERS: Planned Takeover Fails; Owner Optimistic on Future
-----------------------------------------------------------
Eastwood & Kimberley Advertiser reports that Eastwood Town owner
Steve Lynch says he believes the club still has a future despite
a planned takeover falling through this week.

According to Eastwood & Kimberley Advertiser, an unknown
consortium pulled out of a deal to buy the Badgers on Tuesday
with issues surrounding unpaid debts from previous regimes
believed to be the main reason.

Mr. Lynch posted a statement on the club's official website
explaining the situation, and speaking to the Advertiser he
reiterated the difficulties the club faces, Eastwood & Kimberley
Advertiser relates.

In terms of the club's immediate future, Lynch is optimistic it
will survive, Eastwood & Kimberley Advertiser notes.

"We've a budget in place that may vary depending on gate receipts
and cup runs etc, but I believe the club will remain in
business," Mr. Lynch quotes Eastwood & Kimberley Advertiser as
saying.

"In my view, the worst case scenario would be having to take a
CVA (Company Voluntary Arrangement) and a ten-point deduction in
order to sort these bills out, but I'm hopeful things can be
resolved before that.

"The club itself didn't 'spend' this money, but due to changes in
ownership and the signing over of various responsibilities, we're
now responsible for it.

"The affected businesses are rightly taking legal action to
recoup what they're owed.  If everything could just get paid as
was originally planned then the situation will be sorted and we
can all move on."


FAREPAK: Customers to Recover About of Half of Claims
-----------------------------------------------------
Vicky Shaw at Press Association reports that liquidators said on
Tuesday former Farepak customers will be paid back about half the
money they lost in the collapse of the Christmas hamper business.

According to Press Association, business services firm BDO said
they will make dividend payments to Farepak's creditors,
including customers and agents, at the end of next month.

They confirmed that a payment of about 32p in the GBP1 will be
made, including the GBP8 million which Lloyds Banking Group
announced it was making available to former Farepak customers
last week, Press Association relates.

BDO said that when added to the 17.5p in the pound given by the
Farepak Response Fund charity, set up by the Government in 2006,
customers will have received a total of approximately 50p in the
pound, Press Association notes.

The liquidators, as cited by Press Association, said they will
aim to make dividend payments to Farepak's 114,000 creditors at
the end of August, which will for them mark the end of the
liquidation of Farepak.


GKN HOLDINGS: S&P Affirms 'BB+' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on U.K.
engineering group GKN Holdings PLC (GKN) to stable from positive.

"At the same time, we affirmed our 'BB+' long-term corporate
credit rating on GKN," S&P said.

"In addition, we affirmed our 'BB+' issue rating on GKN's
unsecured notes," S&P said.

The recovery rating on these notes is unchanged at '4',
indicating our expectation of average (30%-50%) recovery
prospects in the event of a default.

"The outlook revision reflects our view that there is no longer a
30% or higher chance of an upgrade in the next 12 months
following GKN's agreement to acquire Volvo Aero, the aerospace
division of Sweden-based commercial vehicle group AB Volvo
(BBB/Stable/A-2) for Swedish krona (SEK) 6.9 billion (633
million)," S&P said.

This amount comprises SEK5.6 billion (GBP513 million) of equity,
a Volvo Aero pension settlement of about GBP50 million, and a
working capital refinancing of GBP70 million.

GKN intends to finance the acquisition with a GBP140 million
equity issue and new debt.

"We view the group's intention to fund the most of the cost with
additional debt as aggressive, albeit in line with our view of
GKN's financial policy as aggressive. The increase in debt will
put pressure on GKN's credit metrics in the next 12 months,
although we acknowledge that the equity issue of GBP140 million
will mitigate this pressure," S&P said.

"We currently assess GKN's business risk profile as
"satisfactory" under our criteria," S&P said.

This assessment remains unchanged taking the Volvo Aero
acquisition into account.

"Volvo Aero's operations, in our view, will increase GKN's
presence in the aerospace market, which we see as more stable and
profitable than the driveline market, where GKN generates the
majority of its earnings," S&P said.

"Consequently, we believe that the acquisition is beneficial for
the group's end-market diversification and the future stability
of its earnings.  In our view, GKN's key credit metrics will
remain comfortably within the range that we consider commensurate
with the 'BB+' rating in 2012 and beyond. In particular, we
anticipate that GKN will achieve funds from operations (FFO) to
debt of 20% or more in 2012 and at least 25% thereafter," S&P
said.

"At the same time, we anticipate that GKN's leverage will not
materially exceed debt to EBITDA of 4x in the next 12 months. We
note that the headroom we anticipate under GKN's credit metrics
is limited in 2012.  We could lower the rating should GKN fail to
sustain profitability at a high enough level to allow cash
generation to offset its higher debt burden as a result of recent
acquisitions. This could occur if the sales growth we anticipate
does not materialize, or if GKN is not able to control its cost
base at a sufficiently low level," S&P said.

"Rating upside is possible if, based on our forecasts, we deem
GKN able to maintain FFO to debt of at least 30% and debt to
EBITDA of no more than 3x on a sustainable basis. We consider
that an EBITDA margin of at least 11%-12% on a fully adjusted
basis is commensurate with a higher rating," S&P said.


THOMAS COOK: S&P Cuts Long-Term Corporate Credit Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'B-' from 'B' its
long-term corporate credit rating on U.K.-based tour operator
Thomas Cook Group PLC (Thomas Cook).  The outlook is negative.

"At the same time, we lowered our issue rating on Thomas Cook's
unsecured notes to 'B-' from 'B'. The recovery rating on this
debt remains unchanged at '4', indicating our expectation of
meaningful (30%-50%) recovery in the event of a payment default,"
S&P said.

"The rating action primarily reflects the deterioration in Thomas
Cook's business risk profile, which we now assess at the low end
of the "weak" category under our criteria. It also reflects our
expectation of continued weakening in the group's credit metrics
over the near to medium term; the group's financial risk profile
is now well within the "highly leveraged" category," S&P said.

"We view positively the recent extension of the group's short-
term maturities through to 2015 and its progress in asset
disposals, which have eased short-term liquidity concerns.
However, we believe that the lack of visibility on any inflection
point on earnings and cash flow generation represents a key
concern that could materially affect liquidity and, potentially,
make the current capital structure unsustainable over the long
term," S&P said.

"In our view, this could jeopardize any refinancing attempt as
the 2015 maturity wall approaches. In our opinion, structural
competitive changes in the industry--such as  shorter times from
booking to vacation and tightening competition following
increased penetration of online travel agencies, as well as more
people  booking holidays directly on the Internet--have generated
downward pressure on  Thomas Cook's pricing and margins," S&P
said.

In response to these structural changes and the difficult trading
environment, Thomas Cook has cut capacity and increased its focus
on online distribution and differentiated packages (that is,
specialized and exclusive holiday products).

Differentiated packages are difficult to replicate and therefore
generate better margins.

"Although we view such recent strategic developments favorably,
we believe that they present significant execution risks because
of the intense competitive environment and recent changes in
customer behavior," S&P said.

The issue rating on the GBP300 million and EUR400 million senior
unsecured note issues (together, the notes) issued by Thomas Cook
is 'B-', in line with the corporate credit rating.

"The recovery rating on the notes is '4', indicating our
expectation of average (30%-50%) recovery in the event of a
payment default.  The main factors influencing the recovery
rating are the unsecured nature of  the notes; Thomas Cook's
multijurisdictional exposure, which could delay or lower ultimate
recoveries; the potential for additional liabilities arising from
revenues received in advance; and various guarantees that Thomas
Cook  gives to travel regulators in the form of bonds," S&P
said.

In order to determine recoveries, we simulate a hypothetical
default scenario.

"In our hypothetical scenario, we assume pressures on Thomas
Cook's revenues, mainly fueled by the deterioration in the global
economy leading to a contraction in the average customer spend,"
S&P said.

"We also assume a drop in the group's profitability due to
increased price competition and more and more customers choosing
alternative ways of booking holidays, such as through online
travel agencies or elsewhere on the Internet," S&P said.

"Following the recent maturity extension, our simulated default
is triggered by a liquidity shortfall as a result of significant
working capital swings in 2014 (from 2013 under our previous
hypothetical default scenario, after the successful
refinancing)," S&P said.

"The negative outlook reflects our view of the ongoing pressure
on Thomas Cook's operating performance. In particular, we believe
that Thomas Cook's liquidity profile may deteriorate further due
to the difficult macroeconomic environment affecting consumers
and their discretionary spending," S&P said.

Furthermore, the group faces the challenge of successfully
addressing the structural changes affecting the industry

"We anticipate that this situation will continue throughout 2012
and possibly beyond.  We could lower the rating if it appears
likely that the declines in profits and cash flow are not
moderating and further hampering liquidity (particularly with
regard to the key fourth calendar quarter)," S&P said.

In addition, weakening operating performance could affect
covenant compliance as soon as mid-2013.

"In our view, in such a scenario, Thomas Cook's current capital
structure could become unsustainable over the medium to long
term.

"Therefore, our negative outlook also takes into account the
increasing risk that the group could possibly undertake credit-
dilutive debt restructuring measures," S&P said.

"We will monitor this risk closely because we would view such
debt restructuring as tantamount to a default under our criteria.
However, we are not currently aware that Thomas Cook is taking
any tangible steps in this direction. A material deterioration in
coverage metrics--such as adjusted EBITDA interest coverage
nearing 1.0x--could also put the rating under pressure," S&P
said.

"We deem a revision of the outlook to stable to be remote in the
short term. This is because such action would be dependent on us
being confident that Thomas Cook could maintain at least adequate
(15%) covenant headroom. It would also be dependent on Thomas
Cook stabilizing revenues, EBITDA, and free cash flow, and
addressing its short-term liquidity issues and financing needs,"
S&P said.


* UK: Company Failures Lower Than Forecast, Begbies Traynor Says
----------------------------------------------------------------
According to Bloomberg News' Chris Peterson, the Financial Times,
citing restructuring specialists Begbies Traynor Group, said that
the number of U.K. companies failing is lower than forecast.

Company insolvencies peaked at 26,000 in 2009, dropping to 21,000
in 2010, against forecasts of about 30,000, Bloomberg discloses.

Low interest rates helping businesses refinance and stave off
collapse, Bloomberg says.

Other contributory factors include reluctance of tax authorities
and banks to pull plug on struggling companies, Bloomberg notes.



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


* S&P Takes Rating Actions on 10 European CDO Tranches
------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on 10 European collateralized debt obligation (CDO)
tranches.

S&P lowered and kept on CreditWatch negative our ratings on nine
tranches; and removed from CreditWatch negative our rating on one
tranche.

For the full list of the rating actions, see http://is.gd/4puVYn

"The rating actions on these 10 tranches follow our recent rating
actions on the underlying collateral, swap counterparty, bank
account provider, or guarantor," S&P said.

"Under our criteria applicable to transactions such as these, we
would generally reflect changes to the rating on the collateral,
swap counterparty, bank account provider, or guarantor in our
rating on the tranche," S&P said.


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *