TCREUR_Public/121019.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Friday, October 19, 2012, Vol. 13, No. 209



WIENERBERGER AG: Moody's Corrects April 26 Rating Release


KREMIKOVTZI AD: Assets Put Up for Sale; Nov. 19 Bid Deadline Set


* CYPRUS: S&P Lowers Long-Term Sovereign Credit Rating to 'B'


S-CORE 2007-1: S&P Affirms 'D' Ratings on Two Note Classes
SOLARWATT AG: Dresden Court Repeals Insolvency Proceedings


HOUSING FINANCE: May Default on US$4.3-Bil. Bonds


HOUSE OF EUROPE IV: Moody's Confirms 'Ba2' Rating on Cl. A1 Notes
OLHAUSEN: In Receivership; 160 Jobs Affected


DEMATIC SA: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable


STORM 2012: Fitch Assigns 'BBsf' Rating to Class E Notes


HIDROELECTRICA SA: To Remain in Insolvency, Court Rules


ACRON JSC: Fitch Assigns 'B+' Rating to RUB5-Bil. Domestic Bond


VOLKSBANK SLOVENSKO: Fitch Affirms Viability Rating at 'bb-'


BANCAJA SERIES: Fitch Affirms Ratings on 23 RMBS Tranches
CAIXA ECONOMICA: Fitch Affirms Rating on Covered Bonds


DUFRY AG: Moody's Assigns First-Time Ba3 CFR/PDR; Outlook Stable


CALIK HOLDING: S&P Assigns 'B' Rating to US$300MM Unsecured Notes

U N I T E D   K I N G D O M

BEAMLIGHT AUTOMOTIVE: In Administration, 190 Staff on Leave
DAWSON INTERNATIONAL: Chanel Buys Barrie Knitwear; 176 Jobs Saved
* UK: Moody's Says Water Sector to Face Negative Credit Pressure


* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix



WIENERBERGER AG: Moody's Corrects April 26 Rating Release
Moody's Investors Services has issued a correction to the
April 26, 2012 rating release of Wienerberger AG.

Revised release follows:

Moody's Investors Services downgraded the Probability of Default
and Corporate Family ratings of Wienerberger AG by one-notch to
Ba2. Concurrently Moody's has downgraded the rating on
Wienerberger's EUR500 million subordinated notes to B1 (LGD6,
97%) and the rating on the group's senior unsecured Medium Term
Notes to Ba2 (LGD4, 61%). The outlook on all ratings is stable.
This concludes Moody's review for possible downgrade initiated on
February 17, 2012.

Ratings Rationale

The downgrade of Wienerberger's Corporate Family rating reflects
the group's weak credit metrics for the current Ba1 rating
category with RCF/Net debt of 17.6% at fiscal year-end 2011
versus expectations of close to 20% for the current rating
category, especially taking into account the fact that 2011 was
possibly a peak or close-to-peak year in the current economic
cycle. The downgrade to Ba2 also reflects Wienerberger's exposure
to the highly volatile markets of new residential construction ,
a low, albeit recently improved interest coverage as measured by
EBIT/Interest of 1.3x per end of 2011, and the group's weak
profitability as measured by EBIT / Average Assets and if
compared to most European peers in the building materials
industry. Moody's expects that trading conditions over the next
twelve to eighteen months will be challenging as a result of
continued sovereign tensions and declining consumer confidence.
Wienerberger will also face relatively strong comparatives going
into 2012 in certain markets such as Germany, France and Poland,
which could make it difficult to improve credit metrics further
in 2012.

At the same time Wienerberger will close the debt-financed
acquisition of a 50% stake in Pipelife (Wienerberger currently
owns 50% of Pipelife) for a cash consideration of EUR162 million
(plus EUR10 million of dividends to be paid to Solvay, the
seller). Wienerberger will consolidate EUR71 million of net
indebtedness at Pipelife (no change of control triggered by
acquisitions through core shareholder).

The acquisition of Pipelife makes strategic sense and will
support the group's efforts to diversify away from the cyclical
new residential construction markets. Despite being debt-financed
the acquisition of Pipelife will have only limited impact on the
credit metrics of the group given the low leverage of Pipelife on
a standalone basis and the fact that Wienerberger only has to
acquire 50% of Pipelife to be able to fully consolidate this
entity. The consolidation of Pipelife will be ROCE accretive and
will help Wienerberger restore a stronger ROCE.

Wienerberger has a solid liquidity profile. The group had EUR504
million of cash on balance sheet at 31st December 2011 and EUR250
million availability under the group's revolving credit
facilities. Wienerberger has issued EUR200 million of bonds in Q1
2012, the proceeds of which have been received beginning of
February. The group's internal and external liquidity sources
should be more than sufficient to fund the acquisition price of
EUR172 million (EUR70 million of net indebtedness will not have
to be refinanced), to cover EUR452 million of maturities over the
next twelve months and to cover other cash needs over the next
twelve months (mainly capex, working capital, dividends and
working cash). Moody's also notes that Wienerberger has ample
headroom under its financial covenants even pro-forma of the
acquisition of Pipelife.

Wienerberger will be comfortably positioned in the Ba2 rating
category pro-forma of the acquisition of Pipelife. A stronger
market recovery than currently anticipated coupled with a
conservative financial policy leading to sustained positive free
cash flow generation as well an improvement in RCF/Net debt
towards 20% and EBIT / Interest towards 2.0x could lead to a
rating upgrade over time.

A sharp deterioration in market conditions leading to materially
negative free cash flow generation and RCF/Net debt (pro-forma of
the acquisition of Pipelife) dropping sustainably below 15% would
exert negative pressure on Wienerberger's rating. EBIT / Interest
dropping below 1.0x would also exert negative pressure on the

The principal methodology used in rating Wienerberger AG was the
Global Building Materials Industry Methodology published in July
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Vienna, Austria, Wienerberger AG is the world's
largest brick manufacturer and Europe's largest producer of clay
roof tiles. The group produces bricks, clay roof tiles, pavers
and clay and plastic pipes in 230 plants and operates in 27
countries worldwide and five export markets. The company's main
markets are North America (7% of 2011sales), Central-West Europe
(22% of 2011 sales), North-West Europe (40% of 2011 sales) and
Central-East Europe (29% of 2011 sales). Wienerberger generated
revenues of EUR 2.0 billion in fiscal year 2011.


KREMIKOVTZI AD: Assets Put Up for Sale; Nov. 19 Bid Deadline Set
SeeNews reports that a private enforcement agent has put up for
sale assets of Sofia-based insolvent steel mill Kremikovtzi AD at
a starting price of BGN51.5 million (US$34.4 million/
EUR26.3 million).

Interested parties have until November 19 to submit their offers,
SeeNews discloses.  According to SeeNews, a notice published on
the Web site of the Bulgarian Chamber of Private Enforcement
Agents showed that the successful bidder will be announced on the
following day,

The assets put up for sale include administrative and commercial
premises that served the company's production of steel pipes,
SeeNews notes.

Kremikovtzi, once Bulgaria's largest steel mill, went bankrupt in
August 2008, SeeNews recounts.


* CYPRUS: S&P Lowers Long-Term Sovereign Credit Rating to 'B'
Standard & Poor's Ratings Services lowered its long-term
sovereign credit rating on the Republic of Cyprus to 'B' from
'BB'. "At the same time, we affirmed our short-term sovereign
credit rating on Cyprus at 'B'," S&P said.

The long-term rating remains on CreditWatch with negative
implications, where it was initially placed on Aug. 1, 2012.

"The downgrade reflects our view that Cyprus' creditworthiness
has deteriorated since the last downgrade on Aug. 2, 2012, as the
government has not yet negotiated a support package, while
external and fiscal risks have risen. We believe that electoral
considerations ahead of the presidential poll, scheduled for
February of 2013, have contributed to policy inertia. This is in
the face of a severe banking crisis, partly triggered by Cypriot
banks' involvement in Greek debt restructuring in early 2012
(private sector involvement) but made worse by the deterioration
in banks' domestic lending books, and the government's fiscal
inaction. We see only limited progress by the government in
agreeing to a critical loan program with the Troika," S&P said.

Other risks reflected in S&P's rating action include:

    "The average maturity of the government's commercial debt
    stock has shortened, which in our opinion has weakened its
    liquidity position beyond what is compatible with a 'BB'
    category rating. For financing, the government relies heavily
    on the same distressed domestic banks it is obligated to
    recapitalize, in the absence of direct European Stability
    Mechanism (ESM) support for Cypriot banks," S&P said.

    "The real economy is being increasingly strained by
    deteriorating domestic credit conditions and eroding consumer
    and investor confidence. We expect the second-round effects
    on fiscal performance of deleveraging and weak growth will
    continue to be negative," S&P said.

    "The banks' domestic loan books are deteriorating faster than
    we had originally anticipated, including those of Cyprus' 90
    co-operatives," S&P said.

'We still expect a support package to total amounts in line with
our earlier estimates over an extended period from 2012 to 2015,
but we note the considerable uncertainties surrounding the
estimates of the banking sector's potential capital needs.
However, we believe that the results of a deeper government
diagnostics exercise will likely reveal further capital needs in
the Cypriot banking system, especially if the definition of
nonperforming loans for the cooperative banking sector is aligned
with European norms. Extra capital needs related to credit losses
on the Greek loan books of Cyprus Popular Bank and Bank of Cyprus
are also likely to arise, depending on economic developments in
Greece," S&P said.

"In our view, it is highly likely that the burden of
recapitalizing the banks will fall on the government's balance
sheet, increasing the risk of a government debt rescheduling.
Given the significant constraints on Cyprus' fiscal flexibility,
we view the government's potential debt burden as difficult to
service. It could reach 130% of GDP by the end of 2013, the upper
end of our July 2012 estimate," S&P said.

"In our opinion, Cyprus' commercial banks -- or the government
itself -- could be forced to reschedule their debt in order to
meet the terms of an official lending program. Potential loans
from the ESM could be senior to holders of Cypriot debt, and we
understand it is somewhat uncertain whether this could trigger
the acceleration of debt repayment issued under the government's
medium term notes (EMTN) program according to the provisions of
the EMTN transaction documents," S&P said.

"This could significantly weaken confidence in Cyprus' financial
system; the banking system currently holds nonresident deposits
valued at around 140% of GDP," S&P said.

"It remains our base case that the government will reach
agreement with the Troika. This agreement could, in our view,
possibly involve a bilateral component from the Russian
Federation. We also understand that funds coming from the Troika
should be sufficient to meet Cyprus' external and fiscal needs,"
S&P said.

"Given Cyprus' increasing debt overhang and weak first-half 2012
financial indicators, we have lowered our annual GDP per capita
growth expectations to around minus 2% on average for 2012-2014.
Included in these expectations is our assumption of a
consolidation, mainly on the expenditure side, of about 2% of GDP
per year over the next three years, further depressing public
consumption growth. Moreover, we project that very depressed
credit growth will weigh on weak private consumption and
investment, which we expect will contract significantly," S&P

"The CreditWatch placement reflects our view of the potential for
another downgrade if Cyprus' external and fiscal financing
pressures escalate. We see at least a one-in-two chance that we
could lower the rating again if official assistance is not
forthcoming. We could also lower the ratings if we believe the
government is not able to fulfill the conditions of a Troika
program," S&P said.

"On the other hand, the ratings could stabilize at their current
levels if we see that a program is quickly concluded and if
growth prospects, government debt, and external funding needs
begin to stabilize," S&P said.


S-CORE 2007-1: S&P Affirms 'D' Ratings on Two Note Classes
Standard & Poor's Ratings Services lowered its credit ratings on
S-CORE 2007-1 GmbH's class A1, A2, B, C, and D notes. "At the
same time, we have affirmed our 'D (sf)' ratings on the class E
and F notes," S&P said.

"There have been further defaults in the underlying asset
portfolio, amounting to EUR15 million, since our last review of
the transaction in July 2012. This has resulted in an increase in
the principal deficiency ledger (PDL) balance by EUR14.6 million
to EUR42.25 million," S&P said.

"In our opinion, the amount of defaults in the portfolio,
together with the very low recoveries achieved to date,
increasingly expose the issuer to the risk of a cash shortfall
under its interest priority of payments. About 78% of the
interest income generated by the assets (or 71% including also
recovery proceeds) is currently used to pay senior items under
the interest waterfall before paying interest due to noteholders.
Much of these costs relate to a net cash outflow under the
issuer's fix-to-float interest rate swap. Persistently low
interest rates further aggravate this situation. Under the swap,
the issuer pays a fixed rate of interest and receives a three-
month EURIBOR rate. From the information provided to us by the
servicer we note that the current swap notional is about 10%
higher than the performing asset notional. This imbalance is to a
large extent attributable to the high level of asset defaults.
Since closing 11.5% of the initial asset balance has defaulted,"
S&P said.

"According to our understanding of the transaction documents, the
issuer uses interest income from the assets and interest earned
on the accounts, as well as recovery proceeds to pay all items it
owes under the interest priority of payments. Meanwhile,
principal repayments are used to repay principal on the notes in
order of seniority," S&P said.

These developments increasingly expose the class A1, A2, and B
notes to the risk of an interest shortfall resulting from
insufficient revenue funds.

"Furthermore, the class A2 notes' available credit enhancement of
4.7% is insufficient to cover for the default of the largest
obligor in the portfolio, which accounts for 5.62% of the
outstanding portfolio notional. According to our analysis, the
class B notes have no credit enhancement remaining," S&P said.

"As a result of the above factors, we have lowered our rating on
the class A1 notes to 'BB+ (sf)', that on the class A2 notes to
'CCC (sf)', and that on the class B notes to 'CCC- (sf)'," S&P

"As a result of the additional defaults, the class C, D, and E
principal deficiency subledgers are fully debited and the class B
principal deficiency subledger is debited with 6% of the total
principal balance of the class B notes. The transaction includes
a PDL mechanism whereby the issuer uses the funds remaining on
each quarterly payment date after payment of senior items and
note interest due -- to reduce the balance of the principal
deficiency subledgers in order of seniority before paying
interest on the lower-ranking class of notes. As a result, the
class C and D notes missed their interest payments on the July
2012 payment date. We have therefore lowered our ratings on these
notes to 'D (sf)' from 'CCC- (sf)'," S&P said.

"The class E and F notes had each already missed an interest
payment. We have therefore affirmed our 'D (sf)' ratings on these
classes," 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
          To             From

S-CORE 2007-1 GmbH
EUR509.65 Million Asset-Backed Floating-Rate Notes and Class F
Floating-Rate Notes

Ratings Lowered

A1        BB+ (sf)        A- (sf)
A2        CCC (sf)        B- (sf)
B         CCC- (sf)       CCC (sf)
C         D (sf)          CCC- (sf)
D         D (sf)          CCC- (sf)

Ratings Affirmed

E         D (sf)
F         D (sf)

SOLARWATT AG: Dresden Court Repeals Insolvency Proceedings
SolarServer reports that Dresden Municipal Court has repealed
insolvency proceedings for Solarwatt AG, following the court's
ratification of Solarwatt's restructuring plan.

"With the repeal of the insolvency proceedings, the company has
successfully overcome the biggest challenge in its almost 20-year
history and is now active again on the market as a completely
restructured company," SolarServer quotes Solarwatt AG CEO Detlef
Neuhaus as saying.  "Now we can get back to concentrating 100% on
our business."

Solarwatt's creditors approved the reorganization plan on
September 11, 2012, SolarServer recounts.

A component of the company's recovery was the participation of
businessman Stefan Quandt as an "anchor shareholder", who
invested and loaned almost EUR10 million (US$13 million) to save
the company, SolarServer notes.

Solarwatt AG is a German PV producer.  It is based in Dresden.


HOUSING FINANCE: May Default on US$4.3-Bil. Bonds
Omar R. Valdimarsson at Bloomberg News reports that Iceland's
Housing Finance Fund risks missing a payment on US$4.3 billion in
bonds as the government delays measures that could save the
state-backed mortgage lender.

"The risk is that there may potentially be a default at the HFF
level, which is not paid for in time by the government,"
Bloomberg quotes Oscar Heemskerk, a senior analyst at Moody's
Investors Service, as saying by phone on Oct. 12.  "At the same
time, the government has strong reasons to fulfil their implicit
guarantee.  So we expect that investors get their money back."

HFF is struggling to stay afloat as it loses market share to
commercial banks, Bloomberg notes.  The lender can only issue
mortgages indexed to inflation, even as price growth in excess of
4% makes such loans unattractive to borrowers, Bloomberg states.

That's put HFF at a disadvantage to rivals such as Arion Bank hf
and Islandsbanki hf, where home buyers can get regular mortgages.

HFF is a lender based in Reykjavik.


HOUSE OF EUROPE IV: Moody's Confirms 'Ba2' Rating on Cl. A1 Notes
Moody's Investors Service has confirmed the rating of the
following notes issued by House of Europe Funding IV PLC:

EUR740,000,000 Class A1 House of Europe Funding IV PLC Floating
Rate Notes due 2090 Notes (current outstanding balance of
EUR331,882,594.71), Confirmed at Ba2 (sf); previously on May 8,
2012 Ba2 (sf) Placed Under Review for Possible Downgrade.

Ratings Rationale

According to Moody's, the rating confirmation is the result of
Moody's updated analysis of the deal's performance, and concludes
a review initiated on May 8, 2012, when the Class A1 Notes were
placed on review for possible downgrade. The rating confirmation
reflects the offsetting impact of deleveraging of the Class A1
Notes and deterioration in the credit quality of the underlying
portfolio since the last rating action in April 2012. Moody's
notes that the Class A1 Notes have been paid down by
approximately 9.4% or EUR34.5 million since the last rating
action. However, based on Moody's calculation, the weighted
average rating factor (WARF) has increased to 759 compared to 697
in April 2012. Additionally, Moody's notes that approximately 10%
or EUR42.9 million of the underlying portfolio is currently on
review for possible downgrade.

Moody's analysis also reflects the use of recent Credit Estimates
(CEs) and other assumptions for collateral assets that have not
been rated by Moody's. As explained in its May 8, 2012 press
release announcing the review, where information is adequate,
Moody's has begun producing and using CEs in its rating analysis
in lieu of credit assessments previously inferred from ratings
assigned by other rating agencies for such collateral assets.
These CEs are produced and used as described in the Rating
Implementation Guidance, "Updated Approach to the Usage of Credit
Estimates in Rated Transactions." In updating its analysis of the
issuer's portfolio, Moody's produced CEs for all the unrated

House of Europe Funding IV PLC, issued in September 2005 is a
collateralized debt obligation backed primarily by a portfolio of
Euro-denominated RMBS, CMBS and corporate CDOs originated from
2005 to 2007.

The methodologies used in this rating were "Moody's Approach to
Rating SF CDOs" published in May 2012, and "Using the Structured
Note Methodology to Rate CDO Combo-Notes" published in February

Moody's applied the Monte Carlo simulation framework within
CDOROMv2.8 to model the loss distribution for SF CDOs. Within
this framework, defaults are generated so that they occur with
the frequency indicated by the adjusted default probability pool
(the default probability associated with the current rating
multiplied by the Resecuritization Stress) for each credit in the
reference. Specifically, correlated defaults are simulated using
a normal (or "Gaussian") copula model that applies the asset
correlation framework. Recovery rates for defaulted credits are
generated by applying within the simulation the distributional
assumptions, including correlation between recovery values.
Together, the simulated defaults and recoveries across each of
the Monte Carlo scenarios define the loss distribution for the
reference pool.

Once the loss distribution for the collateral has been
calculated, each collateral loss scenario derived through the
CDOROM loss distribution is associated with the interest and
principal received by the rated liability classes via the CDOEdge
cash-flow model . The cash flow model takes into account the
following: collateral cash flows, the transaction covenants, the
priority of payments (waterfall) for interest and principal
proceeds received from portfolio assets, reinvestment
assumptions, the timing of defaults, interest-rate scenarios and
foreign exchange risk (if present). The Expected Loss (EL) for
each tranche is the weighted average of losses to each tranche
across all the scenarios, where the weight is the likelihood of
the scenario occurring. Moody's defines the loss as the shortfall
in the present value of cash flows to the tranche relative to the
present value of the promised cash flows. The present values are
calculated using the promised tranche coupon rate as the discount
rate. For floating rate tranches, the discount rate is based on
the promised spread over Libor and the assumed Libor scenario.

Moody's notes that in arriving at its ratings of SF CDOs, there
exist a number of sources of uncertainty, operating both on a
macro level and on a transaction-specific level. Primary sources
of assumption uncertainty are the extent of the slowdown in
growth in the current macroeconomic environment and the
commercial and residential real estate property markets. While
commercial real estate property markets are gaining momentum, a
consistent upward trend will not be evident until the volume of
transactions increases, distressed properties are cleared from
the pipeline and job creation rebounds. Among the uncertainties
in the residential real estate property market are those
surrounding future housing prices, pace of residential mortgage
foreclosures, loan modification and refinancing, unemployment
rate and interest rates.

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

Moody's rating action factors in a number of sensitivity analyses
and stress scenarios, discussed below. Results are 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 non-investment grade rated assets notched up by 2 rating

Class A1: +2
Class A2: 0
Class B: 0
Class C: 0
Class D: 0
Class E: 0

Moody's non-investment grade rated assets notched down by 2
rating notches:

Class A1: -2
Class A2: 0
Class B: 0
Class C: 0
Class D: 0
Class E: 0

OLHAUSEN: In Receivership; 160 Jobs Affected
Irish Examiner reports that 160 jobs have been lost after
Olhausen was put into receivership.

Receivers were appointed to Olhausen on Wednesday, Irish Examiner

In a statement, BDO confirmed that Jim Hamilton and David
O'Connor have been appointed joint receivers and managers at the
company, Irish Examiner relates.

Olhausen is a meat product company.  It has three branches in
Dublin and Monaghan.


DEMATIC SA: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit rating on Luxembourg-based materials-handling
provider Dematic S.A. The outlook is stable.

"At the same time, we assigned our 'CCC+' issue rating to
Dematic's US$275 million payment-in-kind (PIK) notes. The notes
were assigned a recovery rating of '6', indicating our
expectation of negligible (0%-10%) recovery in the event of a
payment default," S&P said.

"The issue rating on the company's existing US$300 million senior
secured notes issued in April 2011 was affirmed at 'B'. The
recovery rating on these notes remains unchanged at '4',
indicating our expectation of average (30%-50%) recovery in the
event of a payment default," S&P said.

"The ratings on Dematic primarily reflect the company's 'highly
leveraged' financial risk profile and 'weak' business risk
profile, as our criteria define these terms," S&P said.

"Dematic recently issued US$275 million of PIK notes as part of a
dividend recapitalization. Its issuance in April 2011 of US$300
million in senior secured notes for a similar dividend
recapitalization led to a debt-to-EBITDA leverage ratio of about
4.5x for the fiscal year ended Sept. 30, 2011. In the fiscal year
ended Sept. 30, 2012, we expect Dematic to have deleveraged from
the levels of initial dividend recapitalization. We expect the
PIK notes will lead to fully adjusted debt-to-EBITDA leverage of
about 4.5x in the fiscal year ending Sept. 30, 2013. In
anticipation of further leveraging by Dematic's major
shareholder, we are maintaining our assessment of Dematic's
financial risk profile as 'highly leveraged', and the issuance of
PIK notes for a further dividend recapitalization is therefore
already reflected in our ratings on Dematic," S&P said.

"In the nine months to June 30, 2012, the continuing world
economic recovery helped improve Dematic's operating performance
slightly above our expectations. In the third quarter of its
fiscal year 2012, Dematic reported sales growth of 20%, primarily
supported by positive developments in North America. The
operating profitability (EBITDA) margin reached 9.8% versus 9.0%
year on year. On June 30, 2012, the order book stood at EUR485
million and
provided visibility for about two quarters. We have increased the
assumptions in our base-case scenario for fiscal 2012 and now
include sales growth of about 20% in fiscal 2012 (versus 15%
before). We have also increased our base-case assumption for
Dematic's operating profitability in its fiscal 2012. For fiscal
2013, we expect operating profitability to remain at about 9%-
thanks to moderate revenue growth. We also expect Dematic to
report positive free operating cash flow (FOCF) of EUR30 million-
EUR40 million in fiscal 2013," S&P said.

"Using our base-case operating assumptions and including the
issuance of US$275 million of PIK notes that Dematic plans to use
for a dividend payment, we expect Dematic's leverage to decline
only mildly to about 4.5x in fiscal 2013, while funds from
operations (FFO) to debt should be about 15%. We understand that
the PIK notes include covenants pertaining to dividend payments
by Dematic, except for the dividend permissible under the
documentation of the US$300 million notes issued in 2011. As we
understand, the documentation of the US$300 million notes from
2011 permits a dividend payout ratio of up to 50%," S&P said.

"Dematic's major risks continue to stem from the economic
slowdown and rising raw materials prices, notably for steel.
Dematic has a track record of passing on raw material prices to
its customers. However, we still see this as a potential risk.
The major constraint on the business risk profile is Dematic's
historically weak profitability and considerable volatility,
which has improved over the past two years. In our view, the
business is supported by Dematic's solid market shares in the
fragmented market for logistics products; a high share of stable
and recurring service revenues; fairly stable, prime end-markets
such as food, beverages, and supermarkets; low capital intensity
in terms of capital expenditures and working capital; and
moderate operating leverage," S&P said.

Dematic's majority shareholder is private equity firm Triton (not
rated), since Triton acquired Dematic from Siemens AG
(A+/Positive/A-1+) in 2006.

"The stable outlook reflects our expectation that Dematic will
operate within credit measures commensurate for the 'B' long-term
rating over the business cycle. The rating incorporates our
anticipation of modest organic revenue growth, coupled with
operating profitability margins (EBITDA) of 9%-10% over the
medium term," S&P said.

"We could lower the rating if Dematic reported lower operating
results than we expect, if we saw headroom under financial
covenants as limited, if higher-than-expected cash outflows led
to negative FOCF, or additional debt-financed activities hampered
liquidity or significantly weakened Dematic's credit measures. We
would view a fully adjusted debt-to-EBITDA ratio of 4.0x-5.0x and
FFO to debt exceeding 12% as consistent with the long-term
rating," S&P said.

"An upgrade appears unlikely at this stage, given the ownership
structure, which we believe indicates a heightened risk of a very
aggressive financial policy. This is particularly true in view of
the fact that Dematic's owner has carried out two dividend
recapitalizations within the past two years," S&P said.


STORM 2012: Fitch Assigns 'BBsf' Rating to Class E Notes
Fitch Ratings has assigned STORM 2012-V B.V.'s notes final
ratings, as follows:

  -- EUR1,500,000,000 floating-rate senior class A mortgage-
     backed notes: 'AAAsf'; Outlook Stable

  -- EUR29,100,000 floating-rate mezzanine class B mortgage-
     backed notes: 'AA-sf'; Outlook Stable

  -- EUR23,800,000 floating-rate mezzanine class C mortgage-
     backed notes: 'BBB+sf'; Outlook Stable

  -- EUR26,800,000 floating-rate junior class D mortgage-backed
     notes: 'BB+sf'; Outlook Stable

  -- EUR15,800,000 floating-rate non-collateralized class E
     notes: 'BBsf'; Outlook Stable

The transaction closed on October 17, 2012 and the final
documents conformed to information already received.  The final
ratings are based on Fitch's assessment of the underlying
collateral, available credit enhancement, the origination and
underwriting procedures used by the seller and the servicer and
the transaction's sound legal structure.

The transaction is a true sale securitization of Dutch
residential mortgage loans, originated and sold by Obvion N.V.
(not rated).  Since 10 May 2012, Obvion has been 100% owned by
Rabobank Group ('AA'/Stable/'F1+') and has an established track
record as a mortgage lender and issuer of securitizations in the
Netherlands.  This is the 22nd transaction issued under the STORM
series since 2003.

Credit enhancement for the class A notes is 6.0%, which is
provided by subordination and a non-amortizing reserve fund equal
to 1.0% at closing.  The transaction benefits from an amortizing
liquidity facility of 2.0% at closing, a build-up of the reserve
fund to 1.3% and an interest rate swap providing an excess margin
of 50 basis points.

The transaction is backed by a 3.6 year seasoned non-revolving
portfolio consisting of prime residential mortgage loans with a
weighted-average (WA) original loan-to-market-value of 86.0% and
a WA debt-to-income ratio of 30.5%, both of which are typical for
Fitch-rated Dutch RMBS transactions.  The provisional pool
composition is similar to the previous STORM transactions.  The
purchase of further advances into the pool is allowed after
closing subject to stringent conditions.

Both the STORM series and Obvion's loan book have shown stable
performance in terms of arrears and losses.  The 90+ days arrears
of the previous Fitch-rated transactions have been mostly lower
than the Dutch Index throughout the life of the deals.

Rabobank fulfils a number of roles, including collection account
provider, guaranteed investment contract provider, liquidity
facility provider and commingling guarantor and therefore this
transaction relies strongly on the creditworthiness of Rabobank.
In addition, Rabobank acts as back-up swap counterparty through
its London branch.  Fitch considers that the swap provides a
certain degree of liquidity and credit support in this
transaction and the replacement of the swap would likely be at a
high cost, due to the nature of the swap structure, which in turn
may affect the interest waterfall.

Although the notification trigger is set below the 'A' level, the
agency did not consider the risk of a loss of funds due to
commingling or disruption of payments in the cash flow analysis,
as Fitch considers that this risk is mitigated by means of a
commingling guarantee provided by Rabobank.  In addition, the
transaction is not exposed to the risk of deposit set-off or
other claims.

Fitch considers further set-off risks in this transaction are
minimal due to the structural mitigants in place in relation to
construction deposit, savings and investment set-off as well as
the limited proportion of insurance loans included in the
provisional portfolio.  For the 6.4% insurance loans included in
the provisional pool, Fitch incorporated in its analysis the risk
that borrowers might exercise set-off following the failure of
insurance providers.

Obvion provided Fitch with loan-by-loan information on the
provisional portfolio as of 30 September 2012.  All of the data
fields included in the pool cut were of good quality and Obvion
provided additional information for mortgage loans based on the
income of two borrowers.  Fitch reviewed an Agreed Upon
Procedures report regarding the data provided by the arranger.
The agency believes the sample size, the relevance of the tested
fields, and the limited number of material error findings
suggests the originator provided an acceptable quality of data.
In addition, Fitch relied on its own file review undertaken for a
prior transaction (STORM 2012-IV) on 25 July 2012, which
consisted of 15 loans selected from the provisional transaction
portfolio.  This was considered a very good proxy for STORM 2012-
V, given the similar asset characteristics and recent timing.
The agency discovered no errors or unexpected results.

Fitch relied on repossession data that represented loans
foreclosed between 2004 and 2010.  Further foreclosure data was
also provided up to 2012, although the omission of original
valuation information reduced the usefulness of this data set.
Based on the repossession data analysis, the performance was in
line with Fitch's assumptions; therefore, Fitch did not adjust
its QSA, market value decline or foreclosure timing assumptions.

To analyze the CE levels, Fitch evaluated the collateral using
its default model, details of which can be found in the reports
entitled "EMEA Residential Mortgage Loss Criteria", dated June 7,
2012, "EMEA RMBS Criteria Addendum - Netherlands", dated June 14,
2012, available at  The agency assessed the
transaction cash flows using default and loss severity
assumptions under various structural stresses including
prepayment speeds and interest rate scenarios.  The cash flow
tests showed that each class of notes could withstand loan losses
at a level corresponding to the related stress scenario without
incurring any principal loss or interest shortfall and can retire
principal by the legal final maturity.


HIDROELECTRICA SA: To Remain in Insolvency, Court Rules
Liam Lever at Romania-Insider reports that Romania's Court of
Appeal has ruled that Hidroelectrica will remain in insolvency
after contract holders challenged the decision.

According to Romania-Insider, this means that the damaging
contracts that were crippling Hidroelectrica can be canceled.

The appeal was brought by Alpiq RomEnergie, Alpiq RomIndustries
and Hidrosind, Romania-Insider discloses.  Thursday's ruling is
irrevocable and upholds the decisions already made during
insolvency proceedings to cancel contracts, Romania-Insider

In September, the judicial administrator of Hidroelectrica
admitted request claims of EUR78 million and rejected claims of
EUR261 million, Romania-Insider recounts.  Remus Borza, Euro
Insol representative of the judicial administrator of the
company, said banks represent 69% of the creditors, Romania-
Insider relates.

As reported by the Troubled Company Reporter-Europe on June 22,
2012, Bloomberg News related that a Romanian court approved the
insolvency of Hidroelectica as the company looks to reorganize

Hidroelectrica SA is a Romanian state-owned hydropower producer.


ACRON JSC: Fitch Assigns 'B+' Rating to RUB5-Bil. Domestic Bond
Fitch Ratings has assigned Russia-based fertilizer producer JSC
Acron's (Acron) three-year RUB5 billion domestic bond a local
currency senior unsecured rating of 'B+' with a Recovery Rating
of 'RR4'.

The bond (BO-01 series) is the first tranche issued under the
RUB15bn exchange-traded ruble bond issue program registered in
June 2012 and the rating is in line with the 'B+(EXP)' rating
assigned to the program.

The notes are structured as unsecured and unsubordinated
obligations of Acron and do not contain any financial covenants.
They carry a coupon rate of 9.75% per annum payable on a semi-
annual basis and will mature on October 13, 2015.

Fitch understands that Acron will use the bond proceeds to
refinance near-term maturities.  This should enhance its debt
maturity profile and support its liquidity position.  At end-
Q212, cash balances amounted to RUB37.3 billion against short-
term debt of RUB36.8 billion.  Acron's 2.9% stake in Uralkali
('BBB-'/Stable) was worth RUB20.9 billion at end-Q212 and could
also offer additional flexibility.

Fitch's forecasts mildly negative free cash flow (excluding its
potash project) in 2012.  The base case assumes that Acron will
be successful in raising new debt to refinance upcoming
maturities and capex.  The group has issued RUB19.5bn in
aggregate on the ruble bond market since 2009.


VOLKSBANK SLOVENSKO: Fitch Affirms Viability Rating at 'bb-'
Fitch Ratings has affirmed Volksbank Slovensko a.s.'s (VS) Long-
term IDR at 'BBB-' with a Stable Outlook.  The agency has also
affirmed VS's Viability Rating (VR) at 'bb-'.

VS's Long-term IDR is driven by potential support from its
ultimate owner Sberbank of Russia ('BBB'/Stable).  Fitch
classifies VS as a strategically important subsidiary for
Sberbank, given the latter's focus on expansion in eastern
Europe, and believes Sberbank would have a high propensity to
provide support in case of need.  This view also takes into
account the small size of the subsidiary relative to the parent's
assets and capital base and, hence, the cost of potential
support.  At end-H112, Sberbank of Russia controlled around 99%
of VS's shares.

VS's Long-term IDR would probably be downgraded or upgraded if
there was a change in the parent bank's IDR.

VS's VR takes into account its small size; modest profitability,
affected by large one-off effects in H112 and also some pressure
on margins due to the slowdown in loan growth and the low
interest rate environment; concentration risks in its loan book,
also as the result of a large exposure to real estate project
finance (at 2.5x Fitch core capital at end-H112).  At the same
time, the rating takes into account the bank's expected
recapitalization, the limited use of non-deposit funding and the
stabilization of reported asset quality ratios.

NPLs (loans past due for more than 90 days) stood at 4.6% at end-
H112, down from 5.2% at end-2011, reflecting loan write-offs and
repayments from collateral realizations.  Reserve coverage of
NPLs improved to an acceptable level of 87% at end-H112, although
this ratio varies significantly for different NPL categories,
also reflecting the bank's high reliance on collateral.  The
bank's new shareholder is pursuing stronger reserve coverage with
significantly higher loan loss provisioning to follow to end-

The Fitch core capital ratio stood at only 7% at end-H112.  A
planned capital injection from the shareholder and transfer of
subordinated debt into equity could improve the regulatory Tier 1
capital adequacy ratio to an estimated 11.6% at end-2012 from
8.6% at end-H112, compensating for losses from loan loss
provisions and creating more flexibility to grow.  However, this
would only give a moderate uplift to Fitch core capital, as a
significant proportion of equity comprises preferred shares held
by Sberbank.

Upside potential for VS's VR is currently limited, but the bank's
credit profile would benefit from franchise diversification and a
reduction in portfolio concentrations, and stronger profitability
in a more favorable macroeconomic environment.  Large loan losses
eroding the bank's capital, without follow-up equity injections,
could result in a downgrade of the VR.

The rating actions are as follows:


  -- Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook
  -- Short-term foreign currency IDR: affirmed at 'F3'
  -- Support Rating: affirmed at '2'
  -- Viability Rating: affirmed at 'bb-'


BANCAJA SERIES: Fitch Affirms Ratings on 23 RMBS Tranches
Fitch Ratings has affirmed 23 and downgraded two tranches of
Bancaja 3-9, a series of Spanish RMBS.  The agency has also
removed 19 tranches from Rating Watch Negative (RWN).

The downgrades of the junior notes in Bancaja 4 and 7 are mainly
due to the weaker performance of the assets in the past 12 months
and the insufficient levels of credit support available.  The
removal of the RWN on notes rated above 'BBBsf' follows the
implementation of remedial actions on ineligible counterparties.
The role of account bank and paying agent has been transferred to
Barclays Bank Plc ('A'/Stable/'F1') from Banco Santander
('BBB+'/Negative/'F2') in all deals, in line with the transaction
documentation.  In Fitch's view, Barclays Bank Plc is deemed an
eligible counterparty to support ratings of structured finance
transactions of 'AA-sf'.

The Bancaja series features residential mortgage loans originated
and serviced by Caja de Ahorros de Valencia, Castellon, y
Alicante now integrated within Bankia ('BBB'/Negative/'F2') with
a strong regional concentration in the Valencia region.

In Fitch's view, the worsening macroeconomic environment is
having an impact on borrower affordability across the
transactions.  As of August 2012, the portion of loans in arrears
by more than three months (3M+ arrears) rose to between 3.8% and
1.2% relative to the current portfolio balances compared with
2.6% and 0.6% 12 months ago.  The Negative Outlooks on the
majority of the junior and mezzanine notes reflects Fitch's
concern about the arrears trend and the general outlook for the
Spanish mortgage market.

Bancaja 4 experienced one of the steepest rises in arrear levels,
with the 3M+ ratio as of August 2012 rising to 1.5% compared to
0.6% 12 months ago.  As a result, the pro rata amortization
triggers (set at 2% of all loans arrears by more than three
months including defaults of the current portfolio), have now
been breached and the notes are paying down sequentially.  The
downgrade of the Class C notes is a direct reflection of the
weaker asset performance.

The Bancaja 7 transaction also experienced a rise in arrears,
albeit not as great as that observed in Bancaja 4, with the 3M+
arrears rising to 1.7% compared to 0.9% 12 months ago.  The
levels of credit enhancement available to the class D notes was
deemed insufficient to withstand 'BBBsf' stresses following
Fitch's updated assumptions captured in the latest Spanish RMBS
criteria (see 'EMEA Residential Mortgage Loss Criteria Addendum -
Spain' dated 24 July 2012 at  As a result,
the class D note has been downgraded to 'BBsf'.

The rating actions are as follows:

Bancaja 3, Fondo de Titualizacion de Activos:

  -- Class A (ISIN ES0312882006): affirmed at 'AA-sf'; Outlook
     Negative; off RWN
  -- Class B (ISIN ES0312882014): affirmed at 'AA-sf'; Outlook
     Negative; off RWN
  -- Class C (ISIN ES0312882022): affirmed at 'BBBsf'; Outlook

Bancaja 4, Fondo de Titualizacion Hipotecaria:

  -- Class A (ISIN ES0312883004): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ES0312883012): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class C (ISIN ES0312883020): downgraded to 'BBB+sf' from
     'A+sf'; Outlook Negative; Off RWN

Bancaja 5, Fondo de Titualizacion de Activos:

  -- Class A (ISIN ES0312884002): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ES0312884010): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class C (ISIN ES0312884028): affirmed at 'A-sf'; Outlook
     Negative; Off RWN

Bancaja 6, Fondo de Titualizacion de Activos:

  -- Class A2 (ISIN ESO312885017); affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ESO312885025): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class C (ISIN ESO312885033): affirmed at 'A-sf'; Outlook
     Negative; Off RWN

Bancaja 7, Fondo de Titualizacion de Activos:

  -- Class A2 (ISINES0312886015): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ES0312886023): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class C (ISINES0312886031): affirmed at 'A-sf'; Outlook
     Negative; Off RWN
  -- Class D (ISINES0312886049): downgraded to 'BBsf' from 'BBB-
     sf'; Outlook Negative

Bancaja 8, Fondo de Titulizacion de Activos:

  -- Class A (ISIN ES0312887005): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ES0312887013): affirmed at 'A+sf'; Outlook
     Negative; Off RWN
  -- Class C (ISIN ES0312887021): affirmed at 'BBB+sf'; Outlook
     Negative; Off RWN
  -- Class D (ISIN ES0312887039): affirmed at 'BB+sf'; Outlook

Bancaja 9, Fondo de Titulizacion de Activos:

  -- Class A2 (ISIN ES0312888011): affirmed at 'AA-sf'; Outlook
     Negative; Off RWN
  -- Class B (ISIN ES0312888029): affirmed at 'Asf'; Outlook
     Negative; Off RWN
  -- Class C (ISIN ES0312888037): affirmed at 'BBsf'; Outlook
  -- Class D (ISIN ES0312888045): affirmed at 'Bsf'; Outlook
  -- Class E (ISIN ES0312888052): affirmed at 'CCsf'; Recovery
     Estimate of 0%

CAIXA ECONOMICA: Fitch Affirms Rating on Covered Bonds
Fitch Ratings has affirmed Caixa Economica Montepio Geral's
(Montepio, 'BB'/Negative/'B') Obrigacoes Hipotecarias (OH,
mortgage covered bonds) at 'BBB-', Negative Outlook following a
periodic review of the program.

The rating is based on Montepio's Long-term Issuer Default Rating
(IDR) of 'BB', the Discontinuity Cap (D-Cap) of 0 (full
discontinuity) and the overcollateralization (OC) of 35% that
Fitch takes into account in its analysis.

In terms of sensitivity of the covered bonds' rating, the 'BBB-'
rating would be vulnerable to downgrade if any of the following
occurred: (i) the IDR was downgraded by one or more notches; or
(ii) the program OC went below 35%, which is the breakeven level
in line with the 'BBB-' rating.  The Negative Outlook on
Montepio's IDR drives the Negative Outlook on the covered bonds.

The agency takes into account Montepio's publicly stated OC for
the purpose of its analysis because the issuer's Short-term IDR
rating is below 'F2'.  At 35%, the OC stated in the OH's investor
reporting is in line with a 'BBB-' rating considering recoveries
given default.

The D-Cap of 0 is driven by the full discontinuity assessment for
the liquidity gap and systemic risk component.  This is due to
the highly stressed economic environment in Portugal, as
evidenced by its non-investment grade sovereign rating, which
would, in Fitch's view, prevent a successful timely cover pool
refinancing in the event of an issuer default.

As of end-September 2012, the cover pool amounted to EUR2.945
billion of prime residential mortgage loans originated by the
issuer across Portugal, with liquid assets (in the form of highly
rated public sector assets) amounting to EUR21.6 million, whereas
the outstanding covered bonds amounted to EUR1.5 billion.  In a
'BBB-' scenario, Fitch has calculated a WA foreclosure frequency
of 21.7% and WA recovery rate of 79.4%.

The cover pool weighted-average life stands at 8.3 years,
compared to 2.1 years for the covered bonds.  The resulting
maturity mismatches are the largest driver of the Fitch break-
even OC for the rating, via the stressed refinancing cost
assumptions applied by the agency in modelling recoveries from
the cover pool in the event of a covered bonds default.  These
stressed assumptions take into account the current levelling off
of Portuguese RMBS and government debt spreads, and will be
revised if they deteriorate.

Montepio's covered bonds benefit from an asset swap with The
Royal Bank of Scotland N.V (RBS, 'A'/Stable/'F1').  The asset
swap covers the basis risk of the floating rate mortgages, all
covered bonds are floating rate.

In its recovery calculation, the agency has considered the high
likelihood of OH being accelerated upon an issuer's default, as
all of the OH are retained by the issuer.  If exercised, this
option would eliminate the risk of time subordination among
different OH series.

The Fitch breakeven OC for the covered bond rating will be
affected, among others, by the profile of the cover assets
relative to outstanding covered bonds, which can change over
time, even in the absence of new issuances.  Therefore it cannot
be assumed to remain stable over time.


DUFRY AG: Moody's Assigns First-Time Ba3 CFR/PDR; Outlook Stable
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating (CFR) and probability of default rating (PDR) to
Dufry AG, a global travel retailer ('Dufry' or the 'company').
Concurrently, Moody's has assigned a provisional (P)Ba3 rating
with a loss given default assessment (LGD) of LGD4 (59%) to the
proposed eight-year US$500 million of senior unsecured notes to
be issued by Dufry Finance SCA, a wholly-owned indirect
subsidiary of Dufry AG. This is the first time that Moody's has
assigned a rating to Dufry AG. The outlook on the ratings is
stable. Proceeds from the notes issuance will be used to
refinance existing term loan facilities that mature in August

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect Moody'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 notes. A definitive rating may
differ from a provisional rating.

Ratings Rationale

"The assigned Ba3 CFR primarily reflects the cyclical nature of
Dufry's travel retail business which is tied to international
passenger traffic, with an exposure to certain discretionary
items (e.g. jewelry, leather, accessories) and its high exposure
to emerging markets -- representing 60% of revenue in 2011 -
which can create volatility in cash flows," says Yasmina
Serghini-Douvin, a Moody's Vice President -- Senior Analyst and
lead analyst for Dufry. "In addition, the Ba3 rating reflects
risks associated with the renewal of concession contracts
especially in the company's key markets, such as Brazil, where
several concession contracts will come up for renewal in 2014 and
2015," adds Ms. Serghini-Douvin.

Moreover, the Ba3 rating incorporates Dufry's high adjusted
(gross) debt/EBITDA ratio, which Moody's estimates was
approximately 5.0x in the 12 months to June 30, 2012 (including
capitalized concession expenses using a 6x multiple). Dufry's
credit metrics have at times been adversely affected by its
external growth strategy which aims to increase its scale within
the very fragmented travel retail industry. Since 2011, Dufry has
completed several acquisitions across Latin America, in Russia
and southern Europe amounting to more than CHF1.0 billion. The
current rating includes Dufry's recent agreement to buy 51% of
the leading travel retail business in Greece from the Folli
Follie Group. Whilst Moody's considers that this last transaction
increases Dufry's exposure to an area where tourist activity is
negatively impacted by recession and the European sovereign debt
crisis, it was more conservatively financed, with a substantial
equity component.

More positively, the Ba3 rating factors in Dufry's (1) track
record and know-how in operating a travel retail business; (2)
international footprint; (3) generally positive organic sales
growth; and (iv) solid operating margins relative to those of its
rated peers supported by the company's efforts in the area of
global procurement. Importantly, Moody's believes that Dufry's
concession-based business model is more flexible than a
traditional store-based retail business, with lower operating
leverage when sales growth slows down. Looking ahead, Moody's
expects that Dufry's earnings growth will be supported by long-
term growth in global passenger flows, especially in/from
emerging markets.

Moody's assigned a (P)Ba3 rating (LGD4, 59%) to the proposed
notes, in line with the CFR. Dufry's debt structure consists
primarily of senior unsecured debt instruments - which rank pari
passu amongst themselves -- including a recently signed five-year
CHF650 million revolving credit facility, US$1,000 million term
loan facilities and the proposed notes. All three obligations
benefit from a guarantee from subsidiaries that collectively
represent 100% of the consolidated net assets and EBITDA of the
company. However, these instruments rank behind a small amount of
secured debt (US$23 million at year-end 2011) and trade payables
located at the operating subsidiaries' level. Moreover, Moody's
assessment excludes EUR335 million of non-recourse syndicated
facility recently implemented with a group of Greek banks to
refinance debt located at the level of the travel retail
operations of the Folli Follie Group. This secured facility is
pledged against 100% shares of the target company with no
recourse against the company.

To maintain the Ba3 rating with a stable outlook, Dufry's
leverage measured as Moody's- adjusted debt/EBITDA ratio would
need to move towards 4.5x. Considering the higher event risk
associated with this rating, the current Ba3 rating could
accommodate temporary increases in debt/EBITDA to 5.0x provided
that Dufry remains committed to returning to the parameters
Moody's set for the rating within a reasonable timeline not
exceeding 24 months. The stable outlook also requires that Dufry
maintains a satisfactory liquidity profile including ample leeway
under covenants.

What Could Change The Ratings Up/Down

An upgrade of the ratings is unlikely in the near term given
Dufry's current leverage level. However, Moody's could upgrade
the ratings if Dufry continues to improve its geographical reach,
sustains the growth in its profits and reduces its indebtedness,
with debt/EBITDA decreasing below 4x, on a sustainable basis.

Conversely, Moody's could downgrade the ratings if Dufry
experiences operational weakness, difficulties in integrating
acquisitions or pursues an aggressive growth strategy such that
its Moody's-adjusted debt/EBITDA remains above 5.0x and
EBITA/interest expense below 2.0x for a prolonged period.

Principal Methodology

The principal methodology used in rating Dufry AG was the Global
Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Basel, Switzerland, Dufry AG is an international
travel retailer which operates more than 1,200 shops located at
airports, cruise liners, seaports and other tourist locations. In
2011, Dufry generated CHF2.56 billion in revenue and CHF212.5
million in reported operating profit.


CALIK HOLDING: S&P Assigns 'B' Rating to US$300MM Unsecured Notes
Standard & Poor's Ratings Services assigned its 'B' issue rating
to the proposed US$300 million unsecured notes due 2017 to be
issued by Calik Holding A.S. (Calik; B/Stable/--; Turkey national
scale ratings trBBB-/--/trA-3). "At the same time, we assigned
our '3' recovery rating to the notes, indicating our expectation
of meaningful (50%-70%) recovery in the event of a payment
default. Although the recovery prospects nominally exceed 70%, we
cap the recovery rating at '3', because we view the insolvency
regime in Turkey as relatively unfavorable for creditors," S&P

"The recovery rating of '3' on the proposed unsecured notes
reflects our understanding that Calik will use the proceeds of
the proposed notes to repay about US$190 million of debt at the
operating company (opco) level as well as US$110 million of debt
at the holding level," S&P said.

The proposed US$300 million unsecured notes due 2017 are
unsecured debt instruments but benefit from upstream guarantees
derived from the construction, energy, marketing, and textile
segments. Only the telecom and mining segments are not

"We only include in our analysis the aforementioned segments;
described in the bond documentation as the "bond group"; we
exclude banking assets because we do not have recovery criteria
for this segment, and media assets because we understand that
Calik plans to sell these," S&P said.

"We understand that the proposed $300 million unsecured notes due
2017 will rank pari passu with the other unsecured debt sitting
at the holding level, but will rank junior to the secured debt at
the holding level and to the debt (secured and unsecured) sitting
at the opco level. We acknowledge that there is no intercreditor
agreement in place between the different debtholders. While we
understand that the proposed unsecured notes benefit from valid
upstream guarantees coming from the opcos that are guarantors, we
assume that the unsecured debt sitting at the guarantor level
will rank senior to the unsecured debt at the holding level at
the hypothetical point of default, due to their structural
seniority. We would like to highlight that the treatment of the
unsecured debt at the guarantor level has no impact on our
recovery and issue ratings," S&P said.

"The recovery rating is supported by our view of Calik's
diversified portfolio, strong brand recognition, and synergies
and cross selling opportunities within the portfolio. The rating
is constrained by the relatively sizable prior ranking debt, the
notes' unsecured nature (despite the guarantees provided by
the four guarantors), and the relatively creditor-unfriendly
jurisdiction in Turkey," S&P said.

"Recovery prospects for the US$300 million unsecured notes are
supported by our assumption that, in a hypothetical default,
Calik would most likely be liquidated. In our hypothetical
default scenario, a default would occur due to external
macroeconomic factors affecting the Middle East, and especially
the Republic of Turkey (local currency ratings BBB-/Stable/A-3;
Turkey national scale ratings trAA+/trA-1), leading to a
deterioration in the global economy, including the banking
system. In our scenario, we envisage that the point of default
would occur in 2015 due to Calik's inability to refinance or roll
over its various short-term loans," S&P said.

"Calik is based and headquartered in Turkey. We consider Turkey
to be a less creditor-friendly jurisdiction than other countries.
For further information on the relationship between insolvency
proceedings and our recovery ratings," S&P said

"We recognize that in a default scenario, there will be residual
value for the unsecured noteholders. However, we have also taken
into account that an important part of the company's portfolio
comprises growing companies that, under our default scenario,
will default before reaching a mature size and, therefore, a high
value. This is why the recovery rating on the proposed unsecured
notes is '3', indicating our expectation of meaningful (50%-70%)
recovery for debtholders in the event of a payment default.
Although the recovery prospects nominally exceed 70%, we cap the
recovery rating at '3', owing to our view of the insolvency
regime in Turkey as relatively unfavorable for creditors," S&P

U N I T E D   K I N G D O M

BEAMLIGHT AUTOMOTIVE: In Administration, 190 Staff on Leave
BBC News reports that a Beamlight Automotive Seating has gone
into administration, putting 190 workers on indefinite leave.

Beamlight Automotive Seating said it was unable to meet payroll
commitments because of a contract dispute with a major customer,
according to BBC News.

BBC News notes that joint administrator Nigel Hamilton-Smith from
FRP Advisory LLP said a major automotive maker had defaulted on
several thousand pounds.  The report relates that BAS said it had
retained 59 staff.

The report says that FRP Advisory said it would be seeking a
purchaser for BAS as soon as possible.

Beamlight Automotive Seating (BAS) is a Nottinghamshire
automotive and train seating maker.

DAWSON INTERNATIONAL: Chanel Buys Barrie Knitwear; 176 Jobs Saved
Daily Record reports that luxury fashion brand Chanel has bought
Barrie Knitwear in Hawick after its owners went into

Chanel has taken over the cashmere mill, securing the jobs of its
176 staff, Daily Record discloses.

According to Daily Record, Dawson International, which ran the
mill, appointed administrators in August after the company was
requested to pay a GBP129 million debt in its pension scheme.

Barrie Knitwear manufactures cashmere clothing for fashion houses
and department stores around the world.

* UK: Moody's Says Water Sector to Face Negative Credit Pressure
Despite regulatory changes in the UK water sector, the
fundamental business conditions for the sector remain stable,
reflecting steady operating performance and price increases that
have been sufficient to offset rising costs, says Moody's
Investors Service in an Industry Outlook report published on
Oct. 17.

The new report, entitled "UK Water Sector: Stable Despite Changes
to Regulatory Environment", is now available on
Moody's subscribers can access this report via the link provided
at the end of this press release.

"Negative credit pressure will build for water companies in
England and Wales over the medium to long term, due to a shifting
regulatory landscape associated with the ongoing review of
regulation by the Water Services Regulation Authority, Ofwat,"
says Neil Griffiths-Lambeth, a Senior Vice President in Moody's
PPIF group and co-author of the report. "However, the full extent
of the consequences will not become clear until the regulator
publishes more detailed proposals later this year in 2013."

"Moreover, the sector continues to benefit from a 'safe haven'
image with investors," continues Mr. Griffiths-Lambeth. "The
euro-sovereign crisis has not materially affected water
companies' access to the capital markets or the ability to raise
funding on attractive terms."

In addition, Moody's notes that the industry's exposure to
deteriorating bank counterparty creditworthiness continues to be
mitigated by prudent treasury policies, collateral arrangements
and a degree of headroom in ratings.


* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix
Author: Ralph H. Kilmann
Publisher: Beard Books
Hardcover: 320 pages
Listprice: $34.95
Review by Henry Berry

Every few years, a new approach is offered for unleashing the
full potential of organized efforts.  These are the quick fixes
to which the title of this book refers.  The jargon of the quick
fix is familiar to any businessperson: decentralization, human
resources, restructuring, mission statement, corporate strategy,
corporate culture, and so on.  These terms are all limited in
scope or objective, and some are even irrelevant or misconceived
with regard to the overall well-being and purpose of a

With his extensive experience as a corporate consultant, author
of numerous articles, and professor in business studies, Kilmann
recognizes that each new idea for optimum performance and results
is germane to some area of a corporation.  However, he also
recognizes that each new idea inevitably falls short in bringing
positive change -- that is, a change that is spread throughout
the corporation and is lasting.  At best, when a corporation
relies on an alluring, and sometimes little more than
fashionable, idea, it is a wasteful distraction.  At worst, it
can skew a corporate organization and its operations, thereby
allowing the corporation's true problems or weaknesses to grow
until they become ruinous.  As the author puts it, "Essentially,
it is not the single approach of culture, strategy, or
restructuring that is inherently ineffective.  Rather, each is
ineffective only if it is applied by itself -- as a "quick fix"."

Kilmann tells corporate leaders how to break the cycle of
embracing a quick fix, discarding it after it proves ineffective,
and then turning to a newer and ostensibly better quick fix that
soon proves to be equally ineffective.  For a corporation to
break this self-defeating cycle, the author offers a five-track
program. The five tracks, or elements, of this program are
corporate culture, management skills, team-building, strategy-
structure, and reward system.  These elements are interrelated.
The virtue of Kilmann's multidimensional five-track program is
that it addresses a corporation in its entirety, not simply parts
of it.

Kilmann's five tracks offer structural and operational aspects of
a corporation that executives and managers will find familiar in
their day-to-day leadership and strategic thinking.  Thus, the
author does not introduce any unfamiliar or radical perspectives
or ideas, but rather advises readers on how to get all parts of a
corporation involved in productive change by integrating the five
tracks into "a carefully designed sequence of action: one by one,
each track sets the stage for the next track."  Kilmann does
more, though, than bring all significant features of a modern
corporation together in a five-track program and demonstrate the
interrelation of its elements.  His singularly pertinent and
useful contribution is providing a sequence of steps to be
implemented with respect to each track so that a corporation
progresses toward its goals in an integrated way.

Beyond the Quick Fix is a manual for implementing and evaluating
the progress of a five-track program for corporate success.  The
book should be read by any corporate leader desiring to bring
change to his or her organization.

Ralph H. Kilmann has been connected with the University of
Pittsburgh for 30 years.  For a time, he was its George H. Love
Professor of Organization and Management at its Katz Graduate
School of Business.  Additionally, he is president of a firm
specializing in quantum transformations.


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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