TCREUR_Public/120822.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, August 22, 2012, Vol. 13, No. 167



ISS A/S: Moody's Upgrades CFR/PDR to 'B1'; Outlook Stable


FCC PROUDREED: Fitch Affirms 'BB' Rating on EUR28.4-Mil. Notes


DEUTSCHE PFANDBRIEFBANK: Fitch Cuts Hybrid Instrument Rating to C


* GREECE: Schaeuble Rules Out Another Aid Program


AURELIUS EURO 2008-1: S&P Cuts Rating on Class D Notes to 'CCC+'
BRINKHALL LTD: High Court Approves Survival Plan; 71 Jobs Secured
CAPPOQUIN POULTRY: In Administration, Owes EUR6 Million
FRANS 2003: Fitch Affirms 'BB+' Rating on Class B Notes
MCCABE BUILDERS: In Talks with NAMA Over Sale of Prime Assets

NANTUCKET CLO: Moody's Raises Rating on Class E Notes to 'Ba3'
QUINN GROUP: Former Owner's Daughters Shocked at Liquidation
TAURUS CMBS 2007-1: Fitch Cuts Rating on Class B Notes to 'Bsf'
VALLERIITE CDO I: S&P Affirms 'CCC-' Rating on Class A-1 Notes


COPERNICUS EURO: Fitch Lowers Rating on Class D Notes to 'Csf'


LOCKO-BANK: Fitch Assigns 'B+' Rating to RUB3-Bil. Bond Issue
SIBUR HOLDING: Fitch Raises Issuer Default Rating to 'BB+'
* VOLGOGARD REGION: Fitch Assigns 'BB-' Local Currency Ratings

S E R B I A   &   M O N T E N E G R O

PROCREDIT BANK: Fitch Affirms 'B' Currency Issuer Default Ratings


BBVA-5 FTPYME: Fitch Raies Rating on Class B Notes From 'BBsf'

U N I T E D   K I N G D O M

HEALTHCARE LOCUMS: Won't File Defense Against Fraud Allegations
HIGHLAND HEATHERS: In Receivership, Cut 43 Jobs
RIVIERA HOTEL: Denies Rumors of Administration
WH BROWN: In Receivership on "Difficult Economic Conditions"


* EUROPE: Resolution of External Imbalances May Take Years



ISS A/S: Moody's Upgrades CFR/PDR to 'B1'; Outlook Stable
Moody's Investors Service has upgraded the corporate family
rating (CFR) and probability of default rating (PDR) of ISS A/S
to B1 from B2. Concurrently, Moody's has also upgraded the rating
on the company's senior subordinated notes, due 2016, to B3 from
Caa1. The outlook on the ratings is stable.

Ratings Rationale

"The rating action follows ISS's announcement on August 16 that
the Ontario Teachers' Pension Plan and KIRKBI Invest A/S are to
invest approximately EUR500 million of equity into the company,"
says Knut Slatten, Moody's lead analyst for ISS. "Specifically,
the upgrade reflects our understanding that the funds received
from the new investors, who will hold approximately 26% of the
ultimate holding company of ISS, is expected to be applied to
repayment of the 11% senior notes, due 2014, after the notes call
date in December 2012."

Moody's expects the capital injection to enhance the credit
profile of ISS given that it will (1) reduce the company's
leverage, with pro-forma June 2012 net debt leverage decreasing
by approximately 0.7x; (2) strengthen its free cash flows in 2013
and 2014 as a result of saved interest costs on the 11% notes;
(3) improve its liquidity profile overall, with, in particular,
increased room under financial covenants; and (4) reduce
refinancing risk for the company's 2014 maturities. Moody's
considers the capital injection to be the first step of a
deleveraging process which may end with a targeted IPO by 2015.

Moody's notes that the operating environment in parts of ISS's
core markets is challenging, with the company reporting organic
growth for the six months to June 2012 of 2.2% and profit margins
that are slightly down compared with the similar period last
year. However, the rating agency believes that ISS's recent
signing of two important Integrated Facilities Services (IFS)
contracts will provide a boost to its organic growth in the
second half of 2012 and 2013.

ISS's B1 rating primarily reflects the company's high leverage,
measured by a net debt/EBITDA, of 5.15x as of June 2012 pro-forma
the EUR500 million equity injection. However, more positively,
the rating is supported by the company's (1) large scale and
diversification; (2) wide geographic footprint, with an increased
presence in emerging growth markets; and (3) high cash
generation, exemplified by its 99% cash conversion ratio for the
last 12 months ended June 2012.

ISS's liquidity remains adequate, with no significant amounts
falling due until 2014 assuming the company's securitization
program will continue to be rolled over.

The stable outlook reflects Moody's expectation that ISS will
continue focusing on organic growth and deleveraging in line with
its strategy. The outlook also factors in the rating agency's
assumption that the company's profit margins will not materially
decline. Moreover, the stable outlook reflects Moody's
expectation that ISS will not make any large debt-funded

What Could Change the Rating Up/Down

The rating could be positively affected if ISS's adjusted
leverage were to fall below 5.5x.

Negative rating pressure could arise if ISS's operating
profitability were to decline, with adjusted debt/EBITDA moving
towards 6.5x. Negative rating pressure could also arise in case
of debt-funded acquisitions or problems in terms of execution of
large-scale IFS-contracts.

Principal Methodology

The principal methodology used in rating ISS 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.

Based in Copenhagen, Denmark, ISS is one of the leading facility
services providers in the world. The company recorded revenues of
DKK78 billion in financial year 2011.


FCC PROUDREED: Fitch Affirms 'BB' Rating on EUR28.4-Mil. Notes
Fitch Ratings has affirmed FCC Proudreed Properties 2005's
ratings, as follows:

  -- EUR189.0m Class A (FR0010247577): affirmed at 'AAAsf';
     Outlook Stable

  -- EUR56.8m Class B (FR0010247585): affirmed at 'AAsf'; Outlook

  -- EUR28.4m Class C (FR0010247593): affirmed at 'Asf'; Outlook

  -- EUR28.4m Class D (FR0010247601): affirmed at 'BBBsf';

  -- EUR28.4m Class E (FR0010247619): affirmed at 'BBsf'; Outlook

Outlook is Stable.

The affirmation reflects the stable performance of the two loans
backing the notes since Fitch's last rating action in August

The properties securing both loans comprise good secondary
quality French logistics and office space with a concentration in
and around Paris and the Provence-Alpes-Cote d'Azur region of

The assets were revalued in December 2011, reporting almost no
change in value on a like-for-like basis compared to the previous
valuation 12 months earlier.  Interest coverage has risen
significantly (at or above 5x for both loans) on account of
falling interest rates (70% of hedging is in the form of interest
rate caps).  It would take a sharp increase in interest rates to
breach the loans' cash trap covenants (2x from November), let
alone trip a term payment default.

However refinancing risk remains a concern.  In spite of
increasing coverage, gross debt yields have been on a downwards
trajectory over the past two years, in keeping with weakness in
occupational markets. Nevertheless, at 11.9% and 12.5% for the
France Paris loan and Proudreed France loan respectively, these
debt yields indicate to Fitch that the sponsor retains sufficient
equity to remain committed to the loans.  Further deterioration
in debt yields will erode this commitment, and therefore apply
downward pressure to the ratings.  Fitch will monitor operating
conditions closely.

Refinancing the loans, in particular the large France Paris loan
(EUR248.9 million), by August 2014 will be predicated on the
sponsor preserving equity and adopting a proactive strategy with
potential lenders.  In spite of this market risk, Fitch expects
both loans to repay in full, as reflected in the ratings.


DEUTSCHE PFANDBRIEFBANK: Fitch Cuts Hybrid Instrument Rating to C
Fitch Ratings has affirmed Hypo Real Estate Holding AG's (HRE
Holding) and Deutsche Pfandbriefbank AG's (PBB) Long-term Issuer
Default Ratings (IDRs) at 'A-', Support Ratings at '1' and
Support Rating Floors at 'A-'.  The Outlooks for the Long-term
IDRs are Stable.  Fitch has also affirmed PBB's Viability Rating
(VR) at 'bb'.  Simultaneously, the agency has affirmed Depfa Bank
plc's (Depfa) Long-term IDR at 'BBB+' with a Negative Outlook.

Rating Drivers and Sensitivities - IDRs, Support Ratings and
Support Rating Floors

The affirmation of HRE Holding's and PBB's ratings is based on
Fitch's view that there continues to be an extremely high
probability of support for the group from HRE Holding's 100%
owner, the SoFFin (German Financial Market Stabilisation Fund),
which acts on behalf of Germany ('AAA'/Stable).  PBB is one of
the largest issuers of Pfandbriefe in Germany and public
authorities have demonstrated their willingness to support
Pfandbrief issuers to safeguard the standing of Pfandbriefe.  The
'A-' Support Rating Floor is in line with other major German
Pfandbrief issuers rated by Fitch.

The affirmation of Depfa's IDRs, Support Rating and Support
Rating Floor reflects Fitch's view that the operational and
economic links between Depfa and its sister bank PBB, as well as
Depfa and FMS Wertmanagement (FMS WM; 'AAA'/Stable), are still
significant.  FMS WM is a state-sponsored run-off institution
that acquired a nominal EUR173bn of non-performing and non-
strategic assets and all SoFFin-guaranteed bonds from HRE Group
in October 2010.  The ties between Depfa and the other
institutions result in a high likelihood of indirect support from
Germany through SoFFin for the Irish bank.  Depfa receives IT
services from PBB and services FMS WM assets, stipulated by a
service level agreement which matures in September 2013.  Sub-
participations and back-to-back derivatives between Depfa and FMS
WM accounted for a still significant EUR29 billion at end-June

Depfa's Negative Outlook reflects the agency's view that Depfa
will eventually become disentangled from PBB and FMS WM. This
could trigger a multi-notch downgrade of Depfa's IDRs.

The IDRs of all three entities are sensitive to any change in
Fitch's view of Germany's propensity to support banks and
Pfandbrief issuers in particular or to its view of Germany's
ability to support its banks, as signaled by its sovereign
rating.  The state aid agreement with the European Commission
requires the re-privatization of PBB and Depfa by end-2015 and
end-2014, respectively.  Downward rating pressure would likely
arise from selling the banks to a lower rated bank or a financial
investor.  The sovereign debt crisis reaching a more critical
stage could also result in a rating action.

Rating Drivers and Sensitivities - VR

The affirmation of PBB's VR at 'bb' reflects the bank's sector
and single asset concentration as well as wholesale funding
reliance, which are typical of its commercial real estate (CRE)
and public sector lending business model.  The VR also takes into
account challenges in re-establishing a viable business given
uncertainties facing the European economy and bank wholesale
funding.  These outweigh PBB's currently strong financial

Asset quality metrics are strong following the transfer of non-
performing and non-strategic assets to FMS WM. In Fitch's view,
the still low non-performing loans and loan impairment charges
(LICs) are unsustainable considering PBB's substantial exposure
to cyclical European property markets. Fitch expects normalized
LICs to dent PBB's earnings.  The bank's solid liquidity overhang
has allowed it to re-enter the CRE lending market in 2011.  PBB's
pro-forma liquidity coverage ratio is Basel III compliant.

PBB's capitalization, measured by a Fitch Core Capital ratio of
11.3% at end-2011, is stronger than the capital levels of its
main German peers but needs to be considering concentration
risks, which have the potential to erode its capital in a severe
scenario.  PBB is particularly sensitive to contingency risks in
connection with its exposure to Southern peripheral countries.  A
more moderate economic outlook in PBB's key markets makes it
vulnerable to negative rating migration and hence decreasing
capital ratios.  With CRE loans accounting for an increasing
share of total assets, Fitch expects risk-weighted assets will
increase and result in lower capital ratios.  Fitch notes that
PBB's leverage ratio will need improvement, as tangible common
equity/tangible assets was low at 1.8% at end-2011.

PBB's business plan foresees strong new business growth until
end-2015, predominantly in its Real Estate Finance (REF) segment
and partly in its Public Investment Finance (PIF).  This will
trigger an increasing annual senior unsecured funding need.
Fitch believes that PBB's access to the senior unsecured funding
market is a key challenge.  Constrained funding access or
increasing funding costs (as a result of debt investors
anticipating the sale of PBB) would constrain business growth.
This would prevent PBB from improving its currently low recurring
profitability. Profitability currently suffers from its still
large volume of low-yielding legacy public sector assets and cost
inefficiency in connection with the servicing of FMS WM assets.

Fitch has questions around PBB's intention to provide further
substantial lending to the public sector through its PIF segment.
It will struggle to refinance the over-collateralization of PIF
cover pool assets with loan maturities of up to 10 years by
senior unsecured resources with the same tenors.  While net
margins in PIF are significantly lower than those achievable in
CRE. The asset-liability mismatches inherent in the public sector
lending model will face a notable obstacle when Basel III's net
stable funding ratio is introduced.

Upside potential for PBB's VR would depend on further developing
its senior unsecured refinancing ability, evidence of a
successful business model transformation as projected by PBB, and
the achievement of solid recurring operating profitability.
Fitch believes it will be a lengthy process for the bank to
overcome its challenges.  Downward pressure could result from a
slump in asset quality, driven by large single credit events,
significant stress in property markets affecting PBB's asset
quality or renewed deterioration in the sovereign debt crisis.

Depfa's VR was withdrawn on 26 August 2011 as it is in run-off
mode and on-going viability is dependent on continued external
support.  The agreement with the European Commission prohibits
Depfa from originating any new banking business until re-

Subordinated Debt and other Hybrid Securities

PBB's and Defpa's lower Tier 2 subordinated debt ratings have
been affirmed at 'BB-' and 'B+', respectively.  Depfa's
subordinated debt rating is based on expected support from the
group if ever needed and reflects Fitch's view on the combined
strength of the group's financial fundamentals.

The agency downgraded PBB's and Depfa's hybrid Tier 1 securities
to 'C' from 'CC'.  The Recovery Rating of these notes have been
affirmed at 'RR5' and simultaneously withdrawn in line with
Fitch's corresponding criteria.  The 'C' ratings reflect the
uncertain timing of these issues being serviced again.  The
European Commission agreement does not permit distribution on
profit-related capital instruments (excluding SoFFin-related
ones) prior to re-privatization and in the case of PBB the
redemption of its outstanding EUR999 million SoFFin silent

Subsidiary and Affiliated Company Rating Drivers and

DEPFA ACS Bank (DEPFA ACS) and Hypo Public Finance Bank puc
(HPFB) are 100% core subsidiaries of Depfa (collectively Depfa
sub-group) in Ireland.  Fitch has aligned the ratings of the
subsidiaries with its parent due to their integration into Depfa.
DEPFA ACS benefits from a declaration of backing from its parent,
expressing Depfa's commitment to fulfil DEPFA ACS' contractual
obligations in case of need.  HPFB is a public unlimited
liability company wholly owned by Depfa.  It has not conducted
any new business since its merger with Depfa in 2008 and most of
its remaining assets haven been transferred to FMS WM.  Fitch
understands that Depfa intends to voluntarily liquidate HPFB at
some point.

The rating actions are as follows:

Hypo Real Estate Holding AG:

  -- Long-term IDR: affirmed at 'A-'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1'
  -- Support Rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'A-'

Deutsche Pfandbriefbank AG:

  -- Long-term IDR: affirmed at 'A-'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1'
  -- Viability Rating: affirmed at 'bb'
  -- Support Rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'A-'
  -- Commercial paper: affirmed at 'F1'
  -- Senior Unsecured: affirmed at 'A-' / 'F1'
  -- Market Linked Securities: affirmed at 'A-emr'
  -- Subordinated notes (lower tier 2): affirmed at 'BB-'
  -- Hybrid capital instruments: downgraded to 'C' from 'CC';
  -- Recovery Rating affirmed at 'RR5' and Recovery Rating

Depfa Bank plc:

  -- Long-term IDR: affirmed at 'BBB+'; Outlook Negative
  -- Short-term IDR: affirmed at 'F2'
  -- Support Rating: affirmed at '2'
  -- Support Rating Floor: affirmed at 'BBB+'
  -- Commercial paper: affirmed at 'F2'
  -- Senior Unsecured: affirmed at 'BBB+' / 'F2'
  -- Market Linked Securities: affirmed at 'BBB+emr'
  -- Subordinated notes (lower tier 2): affirmed at 'B+'
  -- Hybrid capital instruments: downgraded to 'C' from 'CC';
  -- Recovery Rating affirmed at 'RR5' and Recovery Rating


  -- Long-term IDR: affirmed at 'BBB+'; Outlook Negative
  -- Short-term IDR: affirmed at 'F2'
  -- Support Rating: affirmed at '2'
  -- Senior Unsecured: affirmed at 'BBB+' / 'F2'

Hypo Public Finance Bank puc:

  -- Long-term IDR: affirmed at 'BBB+'; Outlook Negative
  -- Short-term IDR: affirmed at 'F2'
  -- Support Rating: affirmed at '2'


* GREECE: Schaeuble Rules Out Another Aid Program
Rainer Buergin and Brian Parkin at Bloomberg News report that
German Finance Minister Wolfgang Schaeuble ruled out another aid
program for Greece even though the country is in a "very
difficult situation" with a shrinking economy.

"It can't be helped -- we can't make yet another new program,"
Bloomberg quotes Mr. Schaeuble as saying.  "There are limits."

Two bailouts totaling EUR240 billion (US$296 billion) have been
implemented for the nation since the European debt crisis began,
and the country is now contending with austerity measures needed
to qualify for more aid, Bloomberg discloses.

According to Bloomberg, Spiegel magazine said on Saturday that a
delegation from the so-called troika of the European Commission,
European Central Bank and International Monetary Fund has found
Greece faces a financing gap of EUR14 billion in each of the next
two years.


AURELIUS EURO 2008-1: S&P Cuts Rating on Class D Notes to 'CCC+'
Standard & Poor's Ratings Services has lowered and removed from
CreditWatch negative its credit ratings on Aurelius Euro CDO
2008-1 Ltd.'s Senior Loan A and B, and class C and D notes.

"On March 19, 2012, we placed on CreditWatch negative all of our
ratings in this transaction, following the application of our
2012 CDO of structured finance (SF) securities criteria," S&P

"The rating actions resolve these CreditWatch negative
placements, and follow our credit and cash flow analysis of the
transaction's performance since our previous review on Dec. 29,
2010. In our analysis, we used data from the most recent trustee
report (dated July 5, 2012) and considered recent transaction
developments. We applied our 2012 CDO of SF criteria and our 2012
counterparty criteria," S&P said.

"Our analysis shows that the portfolio credit quality has
deteriorated, and the proportion of assets that we consider to be
defaulted (rated 'CC', 'C', 'SD' [selective default], or 'D') has
increased to 1.58% from 0.00% of the portfolio balance," S&P

"Based on our updated methodology and assumptions, we determined
the break-even default rates (BDR) at each rating level. We used
the reported portfolio balance that we considered to be
performing (EUR97.3 million), the current weighted-average spread
(1.21%), and the weighted-average recovery rates that we
considered to be appropriate. We incorporated various cash flow
stress scenarios using various default patterns for each
liability rating category, in conjunction with different interest
rate stress scenarios. We also determined the scenario default
rate (SDR) at each rating level, which we then compared with its
respective BDR. Following the application of our 2012 CDO of SF
criteria, the SDRs at each rating level have significantly
increased. At the same time, the assumed weighted-average
recoveries at each rating category have significantly dropped,"
S&P said.

"Taking into account our credit and cash flow analysis, we
consider that the credit enhancement levels available to the
Senior Loan A and B, and class C and D notes in this transaction
are commensurate with lower ratings than we previously assigned.
As a result, we have lowered and removed from CreditWatch
negative our ratings on these classes of notes," S&P said.

"We have analyzed the transaction counterparties under our 2012
counterparty criteria, and concluded that our ratings on the
counterparties in this transaction are currently able to support
our ratings on all classes of notes," S&P said.

Aurelius Euro CDO 2008-1 is a cash flow mezzanine structured
finance collateralized debt obligation (CDO) of a portfolio
comprising predominantly mortgage-backed securities.


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

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


Class                         Rating
                      To                  From

Aurelius Euro CDO 2008-1 Ltd.
EUR120. 1 Million Senior Floating-Rate Loan A, Senior Deferrable
Floating-Rate Loan B, and Deferrable Floating-Rate And
Subordinated Notes

Snr Loan A            BB- (sf)            A (sf)/Watch Neg
Snr Loan B            B+ (sf)             BBB (sf)/Watch Neg
C                     B- (sf)             BB+ (sf)/Watch Neg
D                     CCC+ (sf)           BB (sf)/Watch Neg

BRINKHALL LTD: High Court Approves Survival Plan; 71 Jobs Secured
Aodhan O'Faolain and Ray Managh at Irish Examiner report that the
livelihoods of 71 workers have been secured after the High Court
approved a survival plan for a group of service stations and
convenience stores in Kildare and Meath.

Brinkhall (Athy) Limited and two related firms, Brinkhall
(Newbridge) Ltd. and Brinkhall (Ashford) Ltd., were placed into
examinership last May after the High Court was informed the firms
had become insolvent and were unable to pay their debts as they
fell due, Irish Examiner recounts.

Chartered accountant Neil Hughes was appointed examiner to the
firms after an independent accountant said the companies had a
reasonable prospect of survival if certain steps were taken,
Irish Examiner relates.

These steps included the putting together of an agreed survival
plan with the firms' creditors, Irish Examiner notes.

On Monday, Mr. Justice John Cooke heard that Mr. Hughes had put
together a scheme of arrangement that had been accepted by all of
the companies' different classes of creditors, Irish Examiner

The Revenue Commissioners, who was also a creditor, did not
oppose the examiner's scheme, Irish Examiner states.

The scheme was approved on Monday by Mr. Justice Cooke, who made
orders allowing the firms to exit examinership and continue to
trade as going concerns, according to Irish Examiner.

CAPPOQUIN POULTRY: In Administration, Owes EUR6 Million
------------------------------------------------------- reports that Ireland's Cappoquin and its parent
company Cappoquin Poultry Holdings have gone into administration
with EUR6 million in debts after the largest creditor, feed
supplier Henry Good, petitioned the move.

Cappoquin was previously rescued from liquidation in 2008 by
Derby Poultry, according to

The report discloses that rising input costs and cheaper imports
are being put forward as reasons for the company's situation.

Cappoquin is one its largest poultry processors in the world.
Cappoquin employs 130 people in its factory in Waterford.

FRANS 2003: Fitch Affirms 'BB+' Rating on Class B Notes
Fitch Ratings has affirmed FRANs 2003 Plc's class A1 and class A2
notes at 'BBB-' with a Stable Outlook.  The agency has also
affirmed FRANs 2003 Plc's class B notes at 'BB+', with a Stable

The affirmation of the class A1 and class A2 notes continues to
reflect collateral and loan to value ratios (LTVs) commensurate
with the 'BBB' rating category.  LTVs of around 64% are able to
sustain stresses of 20% on its Tier 1 aircraft and a 35% stress
on its Tier 2 aircraft before the LTV for debt outstanding under
the Class A notes reaches 100%.  This demonstrates some
improvement compared with last year, where aircraft values could
only sustain a 15% stress scenario on its Tier 1 aircraft and a
35% stress on its Tier 2 aircraft, however, this is largely
related to the deterioration in the euro versus the USD.

Class A1 and class A2 notes are senior tranches, ranking pari
passu with each other and benefiting from a moderate level of
over-collateralization, due to a relatively liquid collateral

Repayments to the noteholders by the airline are a secondary
consideration for senior tranches.  However, the creditworthiness
of the airline indicates the airline's financial ability to repay
noteholders in the first instance.  Where Air France is not in a
position to repay noteholders, the facility is exposed to the
unpredictability of the repossession and remarketing process.

The rating for class B notes (subordinated tranche) has been
affirmed due to the probability that Air France will repay
noteholders in an event of default, near term maturity and to a
lesser extent, due to the improvement of its LTV.  However, the
rating of the class B notes is constrained by the
creditworthiness of the airline.  The 68.4% LTV of tranche B,
which represents an improvement on last year's figure, is deemed
to be relatively strong and indicative of a 'BB' rating category.

The ratings for both tranches are supported by the structure's
liquidity facilities.  These enable interest payments to be made
in the event Air France can no longer do so, even if Air France
becomes insolvent.  Essentially these act to defer an event of
default on the notes and provide the issuer, FRANs 2003, with
additional time to repossess and liquidate the asset.  These
liquidity facilities, which are sufficient to cover remaining
interest payments on the notes, mitigate to some extent the more
onerous French insolvency regime compared with that of the US.
Repayment of these facilities occurs prior to repayment on the
notes for both class A and class B.  Consequently, interest
remaining on the notes has been added to the loan outstanding for
the purpose of calculating LTVs.

Fitch's 'Aircraft Enhanced Equipment Trust Certificates'
criteria, (dated 15 September 2011 at
guided Fitch's analysis of the FRANs 2003 securities, but the
application has limitations relating to the criteria's assumed
legal framework, which reflects the US bankruptcy code and other
frameworks, such as the Cape Town Treaty.  The ratings
incorporate features specific to the FRANs 2003 securities
including the timing and process for the repossession of
aircraft, and therefore conclusions reached in Fitch's analysis
of the FRANs 2003 securities may not be applicable to other
Enhanced Equipment Trust Certificates.

The methodology provides for a distinction in the rating of
senior tranches, which follow a "top-down" approach, and
subordinated tranches, which follow a more "bottom-up" approach.

Positive: Future developments that may, individually or
collectively, lead to positive rating action include:

Class A1 and Class A2 - Senior Tranches

  -- Material improvement in the aircraft values such that LTVs
     remain below 100% when a 25% stress scenario is applied to
     Tier 1 collateral of the aircraft pool and a 40% stress to
     Tier 2 aircraft

Class B - Subordinated tranche:

  -- Improvement of Air France's creditworthiness

Negative: Future developments that may, individually or
collectively, lead to negative rating action include:

Class A1 and Class A2 - Senior Tranches

  -- Deterioration in the LTV to over 100% where a 15% stress
     scenario is applied to Tier 1 collateral of the aircraft
     and a 30% stress to Tier 2 aircraft

Class B - Subordinated tranche:

  -- Deterioration of Air France's creditworthiness
  -- The LTV (base value) approaching 100%

MCCABE BUILDERS: In Talks with NAMA Over Sale of Prime Assets
Tom Lyons at reports that McCabe Builders is
locked in talks with the National Asset Management Agency (NAMA)
after offloading one of its prime assets in London for GBP51.5
million to an American fund.

McCabe recently sold Eagle House in EC1 in London to Mount Anvil
-- a fund backed by Area Property Partners, a multibillion asset
management firm, discloses.

McCabe Builders is now in talks about how best to fulfill the
rest of its business with the State property agency, says.  The builder and its related companies are
understood to have entered NAMA two years ago with debts of
EUR200 million, notes.

In July 2011, McCabe said it had agreed a debt for equity swap
with Bahrain-based Western Gulf Advisory (WGA) that would see the
investment group pump GBP40 million into it to help it complete
projects, relates.  However, this deal appears to
have never materialized and McCabe incurred considerable expense
dealing with WGA, states.

McCabe Builders is construction firm led by Maple 10 developer
John McCabe.

NANTUCKET CLO: Moody's Raises Rating on Class E Notes to 'Ba3'
Moody's Investors Service has upgraded the ratings of the
following notes issued by Nantucket CLO I Ltd.:

U.S.$15,000,000 Class B Senior Secured Floating Rate Notes, Due
2020, Upgraded to Aa1 (sf); previously on June 30, 2011 Upgraded
to Aa2 (sf);

U.S.$18,000,000 Class C Senior Secured Deferrable Floating Rate
Notes, Due 2020, Upgraded to A1 (sf); previously on June 30, 2011
Upgraded to A3 (sf);

U.S.$15,600,000 Class D Secured Deferrable Floating Rate Notes,
Due 2020, Upgraded to Baa3 (sf); previously on June 30, 2011
Upgraded to Ba1 (sf);

U.S.$12,600,000 Class E Secured Deferrable Floating Rate Notes,
Due 2020, Upgraded to Ba3 (sf); previously on June 30, 2011
Upgraded to B1 (sf).

Ratings Rationale

According to Moody's, the rating actions taken on the notes
reflect the benefit of the short period of time remaining before
the end of the deal's reinvestment period in November 2012. In
consideration of the reinvestment restrictions applicable during
the amortization period, and therefore limited ability to effect
significant changes to the current collateral pool, Moody's
analyzed the deal assuming a higher likelihood that the
collateral pool characteristics will continue to maintain a
positive buffer relative to certain covenant requirements. In
particular, the deal is assumed to benefit from higher spread
levels compared to the levels assumed at the last rating action
in June 2011.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as par, weighted average rating
factor, diversity score, and weighted average recovery rate, may
be different from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of $287 million, no
defaulted par, a weighted average default probability of 19.78%
(implying a WARF of 2639), a weighted average recovery rate upon
default of 52.05%, and a diversity score of 51. Moody's generally
analyzes deals in their reinvestment period by assuming the worse
of reported and covenanted values for all collateral quality
tests. The default and recovery properties of the collateral pool
are incorporated in cash flow model analysis where they are
subject to stresses as a function of the target rating of each
CLO liability being reviewed. The default probability is derived
from the credit quality of the collateral pool and Moody's
expectation of the remaining life of the collateral pool. The
average recovery rate to be realized on future defaults is based
primarily on the seniority of the assets in the collateral pool.
In each case, historical and market performance trends and
collateral manager latitude for trading the collateral are also

Nantucket CLO I Ltd., issued in November 2006, is a
collateralized loan obligation backed primarily by a portfolio of
senior secured loans.

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

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

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

Moody's Adjusted WARF -- 20% (2111)

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

Moody's Adjusted WARF + 20% (3167)

Class A: 0
Class B: -2
Class C: -2
Class D: -1
Class E: -1

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

Sources of additional performance uncertainties are described

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

QUINN GROUP: Former Owner's Daughters Shocked at Liquidation
RTE News reports that the four daughters of Sean Quinn have said
they are "truly shocked and outraged" at move by IBRC to put
Quinn Group Limited into liquidation.

RTE relates that in a statement, the Quinn siblings said the
development meant they would not be in a position to regain
control of the business when the issue comes before the courts.

According to RTE, the four daughters, Colette, Ciara, Aoife and
Brenda claimed the move was a "new low."

RTE learned last Thursday that IBRC, formerly Anglo Irish Bank,
has moved to liquidate the Quinn Group Limited which was the
holding company for Quinn family's business empire.  The
development is a set back for the family which has taken legal
action on the issue, the report notes.

The Quinn siblings argued that a share receiver should never have
been appointed to the company in the first place by the bank, RTE

Documents have been filed in the Company Registration Office
showing the Quinn Group Limited has been wound up by receiver
Kieran Wallace of KPMG.  Mr. Wallace replaced Sean Quinn's wife
Patricia Quinn and his five adult children as shareholders in the
group, RTE discloses.

The development means the Quinn Group Limited will cease to
exist, RTE states.  It is currently a shell company and the
manufacturing companies are owned by IBRC and a consortium of
banks, according to RTE.

Quinn Group (ROI) Ltd. was the ultimate holding company of 95
firms which comprise the Quinn Group which was involved in a
diverse range of businesses, from the manufacture of cement and
concrete products, glass and radiators and plastics, to
insurance, hotels, property and financial services.

TAURUS CMBS 2007-1: Fitch Cuts Rating on Class B Notes to 'Bsf'
Fitch Ratings has downgraded Taurus CMBS (Pan-Europe) 2007-1
Limited as follows:

  -- EUR194.6m class A1 (XS0305732181): downgraded to 'BBB-sf'
     from 'AAsf'; Outlook Negative

  -- EUR11.9m class A2 (XS0309194248): downgraded to 'BBsf' from
     'Asf'; Outlook Negative

  -- EUR17.5m class B (XS0305744608): downgraded to 'Bsf' from
     'BBBsf'; Outlook Negative

  -- EUR25.5m class C (XS0305745597): downgraded to 'CCCsf' from
     'Bsf'; assigned Recovery Estimate (RE) 80%

  -- EUR20.2m class D (XS0305746215): downgraded to 'CCsf' from
     'CCCsf'; assigned Recovery Estimate (RE) 0%

  -- EUR2.8m class E (XS0309195567): affirmed at 'CCsf'; assigned

  -- EUR2.1m class F (XS0309195997): affirmed at 'CCsf'; assigned

The rating downgrades were triggered by the safeguard protection
granted to the Fishman IBC, which failed to repay its EUR23.5
million loan at its maturity in July 2012.  As a result of this
court decision, all cash flow stemming from the collateral is
being held in an escrow account, prompting drawdowns under the
liquidity facility to enable the issuer to meet its expenses in
full.  The loan has been transferred to special servicing, where
discussions continue surrounding possible restructuring options.
However, safeguard protection implies lower creditor flexibility
for a period of time.

The Fishman IBC loan is quite small at 6.9% of the pool balance.
However, the court decision has negative implications for the
largest loan, the EUR134 million Fishman JEC loan (almost 50% by
pool balance).  Besides also being backed by French collateral,
both borrowers are controlled by the same sponsor.  While the
larger loan does not mature until July 2014, the agency believes
it is more risky; the sponsor may well file for safeguard
protection as it has already done on the smaller loan.  This
prospect is reflected by the scale of the downgrades, as well as
in the assignment of Negative Outlooks.

The Hutley loan (14.7% by pool balance) was extended for two
years in 2011, ahead of its original maturity date of July 2012.
Barring extensions, failure of a borrower to repay at maturity
would ordinarily constitute a loan event of default, which is
picked up by note sequential pay triggers.  Should the servicer
continue to grant loan extensions, this may therefore prolong pro
rata note distributions of principal from the stronger loans, and
threaten to weaken credit enhancement for senior bonds.  The risk
of this is also accounted for in the rating action.

VALLERIITE CDO I: S&P Affirms 'CCC-' Rating on Class A-1 Notes
Standard & Poor's Ratings Services affirmed its credit ratings on
the class S and A-1 notes of Valleriite CDO I PLC's U.S. dollar

"The rating actions follow our assessment of the transaction's
portfolio performance and its cash flows. None of our ratings was
affected by either our largest obligor default test or largest
industry default test -- two supplemental stress tests in our
2009 corporate collateralized debt obligation (CDO) criteria,"
S&P said.

Valleriite CDO I is a hybrid cash/synthetic arbitrage CDO of
corporates. The asset structure combines elements of cash CDOs
(bonds and loans) and synthetic CDOs (protection sold through a
portfolio of credit default swaps and total return swaps).
BlackRock Financial Management Inc. manages the transaction,
which closed in June 2007.

"Table 1 shows that available credit enhancement has slightly
decreased for all of the classes of notes since our last review.
None of the classes of notes have amortized or deferred interest
payments since closing," S&P said.

Table 1
Class     Rtg   Rtg    Initial   Current PIK Initial Current
          to    from  notional  notional          CE      CE
          (sf)  (sf)  (mil. US$)  (mil. US$)      (%)     (%)
Unfunded  NR    NR     1,944.0  1,717.6    N     N/A     N/A
S         BBB-  BBB-      72.0     72.0    N   16.00   12.89
A-1       CCC-  CCC-     196.8    196.8    N    7.80    3.43
B-1       NR    NR         N/A      N/A    N     N/A     N/A
B-2       NR    NR         N/A      N/A    N     N/A     N/A
C-1       NR    NR         N/A      N/A    N     N/A     N/A
C-1       NR    NR         N/A      N/A    N     N/A     N/A
D-1       NR    NR         N/A      N/A    Y     N/A     N/A
D-2       NR    NR         N/A      N/A    Y     N/A     N/A

PIK -- Payment in kind.
CE -- Credit enhancement = (total collateral balance --
      tranche balance [including tranche balance of all senior
      tranches]) / total risky exposure.
NR -- Not rated.
N/A -- Not applicable.

"Under the transaction documents, any protection payments due by
the issuer to the synthetic counterparty following a credit event
are mainly made by using the available cash and/or drawing on a
liquidity facility. Repayment of the liquidity facility ranks
senior to payments to the rated classes of notes, thus reducing
the amount available for repayment those notes," S&P said.

"A credit event on a defaulted asset in the underlying portfolio,
Residential Capital LLC, was recently settled. We have assumed
that its settlement was achieved by fully using available cash
and liquidating cash obligations to purchase the defaulted
obligation at par (as opposed to relying on the drawing and
repayment of the liquidity facility, which is currently the case)
in order to stress the excess spread generated by the portfolio
and the potential market value decline of cash assets. This
conservative assumption is consistent with our analysis in
Valleriite CDO I's euro series and in other hybrid transactions,"
S&P said.

"If net losses exceed 11% of the initial transaction notional
amount, an event of default would occur, which could trigger an
acceleration of the notes and leave note holders exposed to
termination costs of the synthetic transactions and the market
value risk of liquidating cash assets," S&P said.

"To date, cumulative losses have totaled 6.7%. In our view, there
is still a reasonable gap between those losses and the trigger at
present, which we will closely monitor going forward," S&P said.

"Table 2 shows the evolution of the total risky exposure and the
collateral balance available, taking into account our
assumptions, to repay the notes in this transaction," S&P said.

Table 2
Feature                            Initial  Aug 2010  Jun 2012
Total collateral balance (mil. US$)[1] 456       357       340
Total risky exposure (mil. US$)[2]   2,400     2,151      2080

[1] Long cash obligations, funded basis obligations, and
    principal cash.
[2] Long cash obligations, long credit default swap exposure, and
    funded basis obligations.
WAR - Weighted-average rating.

Table 3 shows some of the key assumptions S&P has used to model
the transaction. The weighted-average life of the assets is
shorter, while the weighted-average spread has roughly remained
the same, and recoveries have increased slightly.

Table 3
                                Aug 2010            Aug 2012
WAM of assets (years)                6.6                 4.8
Cash obligations WAS (%)            0.64                0.61
Synthetic assets WA premium (%)     0.63                0.61
Funded basis obligations WAS (%)    0.08                0.08
AAA WARR (%)                          15                  16
AA WARR (%)                           17                  18
A WARR (%)                            19.5              20.7
BBB WARR (%)                          22                23.6
BB WARR (%)                           24.5              26.5
B/CCC WARR (%)                        26.2              28.4

WAM -- Weighted-average maturity.
WAS -- Weighted-average spread.
WARR -- Weighted-average recovery rate.

"Overall, we have observed a mixed performance, with a relatively
negative rating migration. A shorter time to maturity and better
recoveries have compensated for further losses," S&P said.

"We therefore view the level of credit enhancement available to
the class S and A-1 notes as being commensurate with our current
ratings. As a result, we have affirmed our ratings on these
classes of notes," S&P said.


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

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


Class                 Rating

Valleriite CDO I PLC
$2.4 Billion Fixed- And Floating-Rate And Subordinated Notes

Ratings Affirmed

S                     BBB- (sf)
A-1                   CCC- (sf)


COPERNICUS EURO: Fitch Lowers Rating on Class D Notes to 'Csf'
Fitch Ratings says that Copernicus Euro CDO I B.V.'s notes '
ratings will not be impacted as a result of the recent change of
manager from Highland Capital Management Europe to CELF Advisors
LLP.  The notes' ratings are as follows:

  -- EUR3.0m Class C1 (ISIN XS0131036310): 'CCCsf'; Recovery
     Estimate ("RE"), RE 85%
  -- EUR6.9m Class C2 (ISIN XS0131113838): 'CCCsf'; RE 85%
  -- EUR13.4m Class D (ISIN XS0131037045): 'Csf'; RE 0%

The low rating on the most senior outstanding notes indicates
that default appears a real possibility.  In addition, as the
reinvestment period is over, the role of the manager in the
transaction is limited.  Accordingly, Fitch has not evaluated the
replacement manager and the change in manager will not impact the
transaction's ratings.

The change in manager was subject to an accession deed dated 17
August 2012 between COPERNICUS EURO CDO-I, Highland Capital
Management Europe, CELF Advisors LLP, Deutsche Trustee Company
Limited and Deutsche Bank Luxembourg SA.

CELF Advisors LLP is a wholly owned indirect subsidiary of The
Carlyle Group L.P., a Delaware limited partnership.  Founded in
1987, the Carlyle Group is a global asset manager with more than
USD159bn assets under management (AUM).  This includes 37
structured credit funds within the Global Market Strategies, with
an aggregate AUM of USD16.4bn, invested primarily in senior
secured bank loans through structured vehicles and other
investment products.  CELF Advisors LLP, manages EUR5bn of AUM
across 11 funds.


LOCKO-BANK: Fitch Assigns 'B+' Rating to RUB3-Bil. Bond Issue
Fitch Ratings has assigned Locko-bank's (Locko; 'B+'/Stable) RUB3
billion bond issue BO-3, due August 11, 2015 a final Long-term
rating of 'B+' and National Long-term rating of 'A-(rus)' with a
Recovery Rating of 'RR4'.

First and second coupons were priced at 10.75%. The bonds have a
put option after one year.  Locko's obligations under the notes
will rank equally with the claims on existing senior unsecured
debt. The proceeds will be used to fund Locko's core business.

Locko is a mid-sized Moscow-based bank, ranked 77th by total
assets at end-H112.  The bank is owned by International Finance
Corporation (15%) and East Capital Fund AB (11%) and various
individuals (74%).

SIBUR HOLDING: Fitch Raises Issuer Default Rating to 'BB+'
Fitch Ratings has upgraded OJSC SIBUR Holding's (Sibur) Long-term
foreign currency Issuer Default Rating (IDR) to 'BB+' from 'BB'.
Fitch has also affirmed the Short-term foreign currency IDR at
'B'.  The Outlook on the Long-term IDR is Stable.

The rating action reflects the fundamental improvements in the
group's operational profile, profitability and cash flow
generation capacity following the investments realized over the
past few years.  The upgrade also reflects the group's strong
credit metrics and financial flexibility post takeover, and
Fitch's opinion that the new shareholders have endorsed and will
support Sibur's strategy and conservative financial policies.

Sibur's underlying credit profile over the rating horizon maps to
an IDR in the 'BBB' category but the ratings are constrained by
the higher-than-average systemic risks associated with the
Russian business and jurisdictional environment.

Sibur's operating margins are above peers' average and have
demonstrated resilience through the cycle. This is underpinned by
its competitive cost position.  The group is uniquely positioned
to access liquid hydrocarbon feedstock and low-cost associated
petroleum gas in Western Siberia.  Long-term supply contracts
with key suppliers and ongoing investments towards the pipeline
infrastructure are expected to further enhance these benefits.

With the launch of the 500ktpa polypropylene (PP) complex,
Tobolsk-Polymer, in Q113, Sibur will more than double its polymer
production and improve its vertical integration, underlying
profitability and cash flow generation.  The new production is
intended to partly substitute PP imports in the domestic market.
The project spanned over four years and will have had an
estimated cost of US$2 billion.  Once completed, it will
establish a positive track record for Sibur's future expansion

Fitch forecasts low double digit revenue growth in 2012
reflecting softening demand and lower chemical prices.  Sibur's
portfolio of energy products will continue to offer some
diversification away from the petrochemicals cycle and its
inherent volatility.  The disposal of the lower margin tyre and
fertilizer businesses in late 2011, coupled with the improving
vertical integration should help offset the rising cost inflation
in Russia and support EBITDA margins above 25% through the cycle.

Fitch's base rating case assumes peak capex spending in 2012 with
funds earmarked for the completion of the Tobolsk complex, the
transhipment facility at Ust-Luga, feedstock infrastructure
projects and the group's contribution towards various joint
ventures.  Other cash requirements in 2012 include dividend
distributions of RUR22 billion for FYE11 and RUR7 billion assumed
for H112, in line with the group's policy (25% of net income).
Free cash flow (FCF) is expected to be strongly negative in 2012
due to the high investment levels.  The ratings assume that Sibur
will continue to access long-term funding to refinance upcoming
maturity and finance its expansion plans.

Liquidity was robust at end-2011 with cash balances of RUB15
billion against maturing long-term debt of RUB7.7 billion.  The
group also counted on undrawn committed long-term facilities with
a total of RUB52.5 billion. Gross debt increased 41% to RUB82.9
billion at end-2011 as long-term borrowings were raised to
refinance transactions resulting from the change in the
shareholder structure.  Sibur's debt reduction capacity was
boosted by RUB56.5bn total cash proceeds from the disposal of the
non-core fertilizer and tyre business, including RUR7.6 billion
dividends.  Fitch forecasts peak funds from operations (FFO) net
leverage of around 1.5x in 2012 with a gradual deleveraging from
2013 onwards.

What Could Trigger a Rating Action?

Positive: Future developments that may, individually or
collectively, lead to positive rating action include:

  -- further operational improvements and capacity expansion
     resulting in enhanced scale and product diversification
     and/or portfolio mix
  -- FFO net adjusted leverage at, or below 1.5x through the
  -- sustained positive FCF generation
  -- established corporate governance track record from the new

Negative: Future developments that may, individually or
collectively, lead to negative rating action include:

  -- material deterioration in the company's cost position or
     access to low-cost associated petroleum gas
  -- sustained negative FCF generation
  -- aggressive financial strategy resulting in an increased
     financial burden and FFO adjusted net leverage sustained
     above 2.0x

* VOLGOGARD REGION: Fitch Assigns 'BB-' Local Currency Ratings
Fitch Ratings has assigned Russia's Volgograd Region Long-term
foreign and local currency ratings of 'BB-', a Short-term foreign
currency rating of 'B' and a National Long-term rating of
'A+(rus)'.  The Outlooks for the Long-term ratings are Stable.
The agency has also assigned the region's three outstanding
domestic bond issues totaling RUB9.4 billion a Long-term local
currency rating of 'BB-' and a National Long-term rating of

The ratings reflect the developed local economy, moderate debt
burden with low immediate refinancing risk and the likely
improvement in operating performance in 2012.  However, the
ratings also factor in the region's relatively weak and volatile
operating performance and continuous budget deficit recorded
during the past three years.

An improvement in the region's budgetary performance with an
operating margin of about 10% coupled with the stabilization of
direct risk below 50% of current revenue would lead to an
upgrade.  Conversely, increasing refinancing risk due to the
growth of short term borrowing coupled with weak, close to zero,
operating balance and growing direct risk would lead to a

Fitch expects an improvement in the region's operating
performance in 2012 due to a tax revenue rebound driven by
continuous economic growth and beneficiary changes in the
national tax regime.  However, the operating balance will remain
weak at about 3.5% of operating revenue and Fitch expects the
region's margins to gradually improve to about 5% during 2013-

The region has a strong, but volatile and highly concentrated tax
base as the 10 largest taxpayers contributed about 70% of total
tax revenue in 2011.  Volatility of income taxes negatively
affected the budget in 2011 when corporate income tax proceeds
fell by 6%.  A deterioration of tax proceeds coupled with a
growing operating expenditure in the pre-election cycle resulted
in the deterioration of the operating margin into negative
territory (-4.5%) in 2011 after a moderate positive result in

The region recorded a notable deficit before debt variation in
2009-2011, which peaked at 11.5% of total revenue in 2011.  Fitch
expects a minor narrowing of the deficit to 8.6% in 2012, however
the region's direct risk is expected to increase by about 40% yoy
to RUB20 billion in 2012 (2011: RUB14.5 billion).  Debt is likely
to moderately increase in 2013 and 2014 to RUB23 billion and
RUB24 billion respectively.  Nevertheless, it will stay moderate
in relative terms below 35% of current revenue.

Despite growing direct risk, the debt maturity profile remains
relatively long-term in the national context expanding until
2017.  The region is not exposed to immediate refinancing risk as
a significant proportion of the region's debt is long term
domestic bonds and bank loans due in 2013-2015.  However a weak
payback ratio (direct risk/current balance) makes the region
significantly dependent on access to the market for refinancing
of maturing debt and capex financing in the medium term.

The Volgograd region is a part of the South Federal District,
which lies in the south-eastern part of European Russia.  Its
economy rests on a strong industrial base which causes high tax
concentration. The region contributed 1.2% of the Russian
Federation's GDP in 2010 and accounted for 1.8% of the country's
population.  The local economy recovered relatively fast in 2010-
2011 after the economic downturn severely affected the region in
2009.  According to preliminary estimates, gross regional product
(GRP) increased by 5.1% in 2011, exceeding the growth of national
GDP.  The administration forecasts the continuation of economic
growth at that level in 2012.

S E R B I A   &   M O N T E N E G R O

PROCREDIT BANK: Fitch Affirms 'B' Currency Issuer Default Ratings
Fitch Ratings has revised the Outlook on ProCredit Bank Serbia's
(PCBS) Long-term foreign currency and local currency Issuer
Default Ratings (IDRs) to Negative from Stable.

Rating Action Rationale

The Outlook has been revised to Negative following similar action
taken on the Republic of Serbia's Long-term foreign and local
currency IDRs.

Rating Drivers and Sensitivities - IDRs and Support Rating

PCBS's IDRs and Support Rating reflect the likelihood of support
from its parent, ProCredit Holding AG & Co. KGaA (PCH; 'BBB-
'/Stable).  However, PCBS's ability to utilize this support may
be constrained by domestic country risks, hence PCBS's Long-term
foreign currency IDR is constrained by Serbia's Country Ceiling
of 'BB-'.

Movements in Serbia's sovereign rating, and hence Country
Ceiling, are likely to affect PCBS's IDRs.

The rating actions are as follows:


  -- Long-term foreign currency IDR: affirmed at 'BB-'; Outlook
     revised to Negative from Stable
  -- Short-term foreign currency IDR: affirmed at 'B'
  -- Long-term local currency IDR: affirmed at 'BB'; Outlook
     revised to Negative from Stable
  -- Short-term local currency IDR: affirmed at 'B'
  -- Viability Rating: unaffected at 'b'
  -- Support Rating: affirmed at '3'


BBVA-5 FTPYME: Fitch Raies Rating on Class B Notes From 'BBsf'
Fitch Ratings has taken various rating actions on BBVA-5 FTPYME
as follows:

  -- Class A1: affirmed at 'Asf', removed from Rating Watch
     Negative (RWN), assigned Stable Outlook
  -- Class A2: affirmed at 'Asf', removed from RWN, assigned
     Stable Outlook
  -- Class A3(G): affirmed 'Asf', removed from RWN, assigned
     Stable Outlook
  -- Class B: upgraded to 'BBBsf' from 'BBsf', assigned Stable
  -- Class C: affirmed at 'AAAsf'; removed from RWN, assigned
     Stable Outlook

The resolution of the RWN on class A1, A2 and A3(G) notes
reflects implementation of the remedial actions as the gestora,
Europea de Titulizacion, SGFT, SA (Edt), has introduced Societe
Generale ('A+'/'F1+'/Negative) as guarantor of Banco Bilbao
Vizcaya Argentaria (BBVA, 'BBB+'/'F2'/Negative) as account bank.
The guarantee has a limit of EUR9 million and is valid for one
year.  If the amount deposited in treasury account exceeds EUR9
million, the excess will be transferred to the additional
treasury account held in Societe Generale.  Although the
guarantor has only been contracted for one year, the gestora has
demonstrated a willingness to comply with transaction
documentation and to seek remedial action for the account bank.
Fitch expects to see further actions when the guarantee expires.

Fitch notes that no remedial actions have taken place so far with
regards to BBVA acting as a hedging agent; however, the agency
expects the implementation of the remedies in the near term.

The upgrade of the class B notes and affirmation of the class A1,
A2 and A3(G) notes is based on their ability to withstand Fitch's
stresses and increased level of the credit enhancement as a
result of the transaction's deleveraging.

The affirmation of class C notes reflects its link to the rating
of the guarantor, the European Investment Fund

The transaction has amortized down to 11% of its original balance
with the top one and top 10 obligors accounting for 2.4% and
11.6% of the outstanding pool respectively.  The pool exposure to
real estate and construction sectors has also increased to 35%
from 30% over the past year.

There has been some deterioration in the transaction performance
with the principal deficiency ledger increasing by EUR8.5 million
over the past year to EUR10.3 million.  However, arrears have
declined from last year's high but were volatile over the period;
delinquencies over 90 days declined to EUR3.7 million from
EUR13.5 million in May 2011.  In Fitch's view, the current levels
of the notes credit enhancement are sufficient to mitigate
increasing concentration at the obligor and industry levels as
well as the fully depleted reserve fund.

U N I T E D   K I N G D O M

HEALTHCARE LOCUMS: Won't File Defense Against Fraud Allegations
Jennifer Thompson at The Financial Times reports that Healthcare
Locums said it would not file a defense against allegations of
fraud leveled at the company and two of its former directors by
former investors.

Healthcare Locums is being sued by several US hedge funds, which
allege the company made misrepresentations about its
profitability and accounting practices, meaning they took
multimillion-pound losses on their shareholdings, the FT
discloses.  Shares in HL were suspended in January last year when
accounting errors were revealed, and have since lost about 98% of
their value, the FT relates.

HC explained its move by saying it does not operate in the US and
both the company and former executives are governed by English
law, the FT notes.  According to the FT, it added that its board
"consider[s] the underlying claim to be wholly without merit" and
that if proceedings begin in a "proper forum" -- which it
identifies as the English High Court -- they will be "strenuously

As reported by the Troubled Company Reporter-Europe on April 4,
2012, Healthcare Locums admitted that there was "material
uncertainty" over its ability to continue as a going concern, as
it faces litigation from shareholders and comes up against
banking covenants.

Healthcare Locums is a UK-based healthcare recruitment group.

HIGHLAND HEATHERS: In Receivership, Cut 43 Jobs
Scott McCulloch at reports that Highland Heathers
has gone into receivership cutting 43 jobs in the process.

The business struggled this year as a result of poor weather,
rising overhead costs, falling consumer demand and an increase in
foreign competition, according to

PKF's Anne Buchanan and Bryan Jackson have been appointed joint
receivers of the business, and have stated the business, which
will close "within the next few weeks" as a buyer can't be found.

"Although this is a long established company with a good
reputation they have had a poor season in a difficult trading
environment with increased competition from overseas. . . . The
company has been profitable to date but a poor sales season due
to the wet weather coupled with high overheads has resulted in
the business making a loss. . . . Unfortunately we do not believe
it can be sold on and we will complete some outstanding orders
before letting the staff go and closing the business in the next
few weeks. . . . Closure is always a last resort and it is
disappointing when a long standing business closes with the loss
of jobs," the report quoted Ms. Buchanan as saying.

The report discloses that Miss Buchanan added: "The lacklustre
economy and the recent dip back into recession has resulted in
reduced consumer confidence which affects the sale of non-
essential products such as plants. . . . Unfortunately Highland
Heathers is another victim of the continuing recession."

                      About Highland Heathers

Highland Heathers nursery is one of the very few working
specialist heather nurseries left in Scotland, it nestles deep in
rural Perthshire and only one mile from Comrie village.

RIVIERA HOTEL: Denies Rumors of Administration
Dorset Echo News reports that bosses at the Riviera Hotel in
Weymouth have hit out against rumors which claim the business is
going into administration.

Management at the art-deco hotel, situated in Bowleaze Cove, said
they were aware of the claims which they deemed "totally
unfounded," according to Dorset Echo News.

"This is totally unfounded, the Riviera continues to go from
strength to strength.  We have enjoyed a high occupancy of guests
throughout the early summer and have many bookings for the rest
of the summer and thereafter . . . .  Our Bowleaze Restaurant is
thriving with not only hotel guests but also with local people,"
the report quoted a spokesman for the hotel as saying.

Situated in Weymouth, Riviera Hotel employs more than 60 people
and re-opened earlier this year.

WH BROWN: In Receivership on "Difficult Economic Conditions"
BBC News reports that WH Brown Construction Limited has entered
receivership following "difficult economic conditions" cutting
130 jobs in the process.

WH Brown Construction was placed in receivership after struggling
to cope with "difficult economic conditions," according to BBC

Derek Hyslop and Colin Dempster of accountants Ernst & Young have
been appointed as joint receivers.  BBC News relates that the
firm said they were now focused on trying to establish the full
extent of the company's debts.

BBC News notes that WH Brown Construction and its subsidiary
Bronco Timber Products Limited entered receivership at the
request of the company's directors.

BBC News relates that receivers said staff would be given help
with the completion of redundancy and benefit claims forms and
offered one-to-one counselling and advice on retraining and
employment opportunities.

The report discloses that Construction union UCATT said it was
seeking urgent answers concerning the future of staff at Brown

                    About WH Brown Construction

WH Brown Construction located in Ainslie St Dundee, DD5 3RR,
United Kingdom.  The building firm has been trading for more than
40 years.


* EUROPE: Resolution of External Imbalances May Take Years
The implementation of a number of structural reforms by the euro
area's periphery countries -- Greece, Ireland, Portugal and Spain
-- have achieved improvements but have not yet fully resolved the
external imbalances that developed in these countries prior to
the crisis, says Moody's Investors Service in a new report
published on Aug. 20. Moody's new report says that the correction
is at best only half-way complete, depending on the country in
question, and could take several years.

The new report is entitled "Euro Area Periphery: Structural
Reforms Have Significantly Improved External Imbalances, But Full
Resolution May Still Take Years".

Moody's new report explains how the challenges facing these euro
area periphery countries originated during the seemingly benign
pre-crisis period, assesses the extent of the adjustment that has
already been achieved by the affected countries, and examines the
possible lessons that similar crises in other countries could
have for the situation of the periphery countries.

Specifically, the report offers a comparison with the crises
faced by Sweden and Finland in the 1990s. Moody's concludes that
the complete unwinding of the periphery countries' accumulated
imbalances -- which were due to the dis-saving behavior in their
respective domestic private sectors rather than their governments
-- may still take several years. The comparison also reinforces
the critical importance of structural reforms for the achievement
of sustainable gains.


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

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

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

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


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

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

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

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

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

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

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