TCREUR_Public/121101.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, November 1, 2012, Vol. 13, No. 218



AUVERSUN: Faces Liquidation; 53 Jobs Affected


GERMAN RESIDENTIAL: Moody's Comments on Restructuring Proposal


* HUNGARY: Construction Sector Liquidations Down in Third Qtr.


CURRAGH CARPETS: Goes Into Liquidation; 60 Workers Lose Jobs
WATERFORD PILOT: To Face Probe Amid Claims of Law Breaches
* IRELAND: Almost Seven Companies Folding Every Day Last Month


UNIPOL GRUPPO: Moody's Confirms 'Ba2' Sr. Rating; Outlook Neg.


LATVIJAS KRAJBANKA: KMPG Continues Loan Disposal Process


BANK ZACHODNI: Moody's Confirms 'D+' BFSR; Outlook Stable
PBG SA: CEO Wieslaw Rozacki Steps Down
POLIMEX-MOSTOSTAL: Inwestycje Files Insolvency Motion


* MOSCOW OBLAST: Moody's Upgrades Currency Ratings to 'Ba2'


AP-36 OCANA-LA: Put Into Bankruptcy by Ferrovial


VOLVOFINANS BANK: Moody's Reviews 'D+' BFSR for Downgrade


UBS AG: Moody's Confirms 'B2' Rating on Credit-Linked Notes


TURKIYE IS BANKASI: Moody's Assigns Ba2 Subordinated Debt Rating

U N I T E D   K I N G D O M

BRIDAL GALLERY: Directors to Decide on Liquidating Chain
WESTMORLAND GAZETTE: 20% of Cumbria Pubs at Risk of Collapse


IPAK YULI: Moody's Assigns 'B2/E+' Ratings; Outlook Stable


* EUROPE: Moody's Says Covered Bond Downgrades Accelerates
* Upcoming Meetings, Conferences and Seminars



AUVERSUN: Faces Liquidation; 53 Jobs Affected
Photo International, citing local news source La Montagne,
reports that the Commercial Court of Clermont-Ferrand has ruled
that struggling Auversun will be liquidated.

The company's 53 employees will lose their jobs, Photon

According to Photon, Auversun needed to attract at least
EUR2 million (US$2.6 million) in new investment to stay in
business, but negotiations with two potential suitors fell

Auversun began insolvency proceedings on Aug. 1, 2012, at which
time it halted production activities, Photon relates.

Auversun is a French module producer.


GERMAN RESIDENTIAL: Moody's Comments on Restructuring Proposal
Moody's Investors Service has determined that the proposed
restructuring of the transaction would constitute a distressed
exchange for the Classes D, E and F Notes. Following the
downgrade due to the distressed exchange definition, Moody's
expects an upgrade of the ratings of these classes of notes to
similar levels as Oct. 30. The upgraded ratings would be based on
the amended terms and conditions of the notes that include
several restructuring features that Moody's views as credit
positive, as described in its press release dated July 18, 2012.

For the Classes A, B and C Notes, Moody's has determined that the
proposed restructuring of the transaction would not constitute a
distressed exchange.

The main aspect considered in the distressed exchange analysis is
the extension of the final legal maturity of the Notes by five
years, which avoids an ultimate default of the affected classes
of notes.

Moody's would adjust the ratings for the affected classes of
notes if the proposed restructuring was implemented. The
downgrade would reflect the expected losses for the respected
classes of notes in a scenario without the proposed

After the restructuring, Moody's would adjust the ratings to
reflect the amended terms and conditions of the notes including
the extended final legal maturity. The adjusted ratings would
address the expected loss posed to investors by the amended legal
final maturity and incorporate the other features of the

Transaction Overview

The transaction follows the principles of a secured loan
structure. The Issuer used the issuance proceeds of each class of
Notes to purchase REF Notes (equivalent to loans) from 31 REF
Note Issuers (equivalent to borrowers) in a corresponding
aggregate amount. Despite the 31 individual REF Note Issuers and
the fact that the security structure does not provide for cross-
collateralization between the REF Note Issuers, the structure is
effectively a single borrower deal. In addition to the interest
payment obligations with respect to the REF Notes, each REF Note
Issuer has also entered into a global facility agreement, in
which global LTV targets are defined that have to be met by the
borrower group as a whole. Two holding companies, both
subsidiaries of DAIG that ultimately own each REF Note Issuer and
their general partners, guarantee the obligations under the
global facility agreement.

Distressed Exchange Analysis

To assess the presence of a distressed exchange, Moody's assumed
a payment default at loan maturity in 2013 absent a
restructuring. Moody's has highlighted as main risks for the
transaction (i) a failure to refinance the loans and (ii) the
uncertainty around the timely repayment of the notes by the
current legal final maturity date of the notes given the size of
the issuance and the short time period to the legal final
maturity date.

The size of the EUR4.4 billion issuance will make a complete
refinancing of the loans in 2013 unlikely without a restructuring
of the loans and the notes. Financing for multifamily portfolios
is in general more easily available compared to other property
types as evidenced by other refinancings this year, but neither
the lending nor the capital markets currently offer sufficient
depths for such a high debt amount. Moody's does not expect a
significant recovery of the lending market in the next two years
as per its EMEA CMBS 2012 Central Scenario. The issuance shows a
current Moody's loan to value (LTV) ratio of 73.0% including
prior ranking debt.

In the analyzed default scenario of the loans Moody's would
expect the servicer to start enforcement actions and selling the
underlying property portfolio. Given the size of the portfolio at
over EUR8 billion current Underwriter (UW) market value (MV), a
sale of the total portfolio is highly unlikely. The portfolio
size is larger than estimates of the total transaction volume in
German multifamily portfolios in 2011. The largest transactions
over the past two years have also been significantly below this

Due to the size of the portfolio, the limited number of investors
capable of buying large residential portfolios and the time
constraints Moody's would expect the sales price to reflect the
distressed work-out. This impacts junior notes more than senior
notes given that senior notes could withstand high discounts on
sale prices without suffering a loss.

A limiting factor for any work-out strategy of the servicer and
the reason for a lower expected sales price is the rather short
tail period of three years for the transaction, i.e. the time
between the loan maturity and the note maturity. Moody's has
considered that there is a risk that not all recovery proceeds
would be paid to the noteholders by the legal final maturity of
the notes considering the limited time for a refinancing or a
work-out of the loan.

Rating Levels After Restructuring

Overall, the default probability during the loan term due to
decreasing rental income will decrease mainly due to the
deleveraging of the portfolio as a consequence of equity
injection and lower interest rates. Moody's determined a low risk
of cash flow shortfall even if the refinancing fell behind the
sponsor's business plan and the unhedged amount of debt

The restructuring effectively staggers refinancing risk over the
new loan term due to the annual amortization targets and the
bullet repayment at the amended loan maturity date. Moody's
determined the refinancing default probability in the medium/
high range (25-50%) based on the expected leverage and the size
of the sub portfolios and the total issuance.

Moody's has also reviewed its value estimate of the portfolio and
kept it at the same level as in its last review in 2011.

The pro-rata allocation of principal proceeds to the notes is a
credit negative to the senior noteholders. The allocation rule
causes senior noteholders to be exposed to repayment risk until
the whole securitized debt amount is redeemed. In contrast, a
sequential allocation of principal proceeds in a default scenario
absent of the restructuring would ensure that senior noteholders
are repaid first. Hence junior noteholders benefit more from the
proposed restructuring than senior notes.

Moody's has determined that the new liquidity facility
arrangements including the reduced liquidity facility amount in
connection with the profile of the interest rate hedges is weaker
compared to the current arrangements. Especially in scenarios of
delayed refinancings and an increase of unhedged debt amounts due
to the interest rate hedge profile the liquidity facility amount
could become tight to cover cash flow shortfalls in default

Delayed refinancings could lead to an event of default under the
loans if the amortization targets are not met which could
potentially result in a borrower insolvency and a stoppage of
payments to the issuer. The liquidity facility would need to
cover the subsequent cash flow shortfall. Relevant variables in
such a scenario are the interest rate environment and the portion
of the unhedged debt amount. A loan default might not affect the
ultimate repayment of the senior notes due to credit enhancement,
but in such a scenario the continuing timely payment of interest
through liquidity drawings could be at risk.

The weaker liquidity arrangements are commensurate with the
current rating levels but could become a constraining factor for
potential upgrades for performance reasons.

Moody's will continue to closely monitor further developments
with respect to the restructuring efforts.

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


* HUNGARY: Construction Sector Liquidations Down in Third Qtr.
MTI-Econews reports that Opten, which compiles information on
companies, on Tuesday said creditors and suppliers launched
liquidation procedures against 1,076 Hungarian construction
companies in the third quarter of 2012, compared to 1,255 in the
second quarter.

The figure was the lowest measured since the first quarter of
2011, MTI notes.

Opten noted, however, that the statistics could vary because of
regulatory changes and the rise in the orders of the sector
proved temporary, MTI discloses.

According to MTI, the number of voluntary liquidations came to
552 in the third quarter, well below the figure in first quarter
and second quarter, when the number of voluntary liquidations
surpassed 1,400.


CURRAGH CARPETS: Goes Into Liquidation; 60 Workers Lose Jobs
Conor McHugh at Leinster Leader reports that 60 workers at
Newbridge's Curragh Carpets plant have been told by a liquidator
appointed to the company on October 26 that they are to lose
their jobs.

The report says SIPTU which represents 35 of the workers has
condemned the manner of the announcement, given that there was no

At the meeting, they were informed that the plant was closing
with immediate effect and they were to directly leave the
premises, Leinster Leader reports.

According to the report, the move brings to an end the 70-year
history of carpet manufacturing in Newbridge when Curragh Carpets
was established as an off-shoot of Irish Ropes.

WATERFORD PILOT: To Face Probe Amid Claims of Law Breaches
Claire O'Sullivan at Irish Examiner reports that the Waterford
Pilot Training College which left hundreds of trainee pilots
stranded in Florida after taking up to EUR80,000 in tuition fees
from them is being investigated by the Office of the Director of
Corporate Enforcement (ODCE).

According to the report, the Department of Transport said a
complaint concerning breaches of company law by Waterford Pilot
Training College (PTC) was referred to the ODCE.

The Irish Examiner relates that the ODCE is not allowed to reveal
the identity of complainants and the Department of Transport said
they did not have any further details about the referral.

The Irish Examiner contacted the Irish Aviation Authority on
October 25 to see if it intended referring PTC Waterford to ODCE
but the body said "they had nothing further to add" having made
an appearance at the D il Transport Committee on Wednesday.

At the committee, the report relates, IAA chief executive Eamonn
Brennan had gone so far as to say "it looks like this should
probably go to the Director of Corporate Enforcement".

The Irish Examiner adds Mr. Brennan has repeatedly denied that
PTC's collapse was due to a failure of regulation on the part of
the IAA.  He said the IAA's remit is to ensure and regulate
flight safety and not oversee the general financial health of a
flight training company, the report relays.

Mr. Brennan, as cited by Irish Examiner, told the Dail committee
"we need to get the principals of the company in here" and the
company's auditors need to answer questions "if we can't place
reliance on audited statements" presented to the IAA just months
before the company went under.

The Irish Examiner notes the Dail Transport Committee on
October 25 agreed to a full and forensic investigation into the
collapse of PTC.  The IAA had earlier likened the financing of
the company to a Ponzi scheme, the report adds.

As reported in the Troubled Company Reporter-Europe on July 23,
2012, The Irish Times said that Pilot Training College was
granted examinership by the High Court.  The appointment of
Michael McAteer of Grant Thornton as examiner is a first step in
restructuring the firm.  According to the Irish Times, the High
Court was told by an independent accountant that the company has
a "reasonable prospect of survival".

Pilot Training College is based in Waterford.

* IRELAND: Almost Seven Companies Folding Every Day Last Month
Irish Examiner reports that an average of almost seven Irish
companies went bust every day from October 1-25, according to the
latest figures from the credit risk analysis firm Vision-net.

Vision-net's figures, covering the period between October 1 and
25, show that 168 companies were declared insolvent - up 39% on
the same month last year, according to Irish Examiner.  The
report relates that of those, 110 were liquidated, 54 entered
receivership, and an examiner was appointed to four companies.

Irish Examiner notes that Vision-net said receiverships more than
doubled over the same period last year, and receivers were
appointed to 10 companies to which businessman Bill Cullen is
linked.  Irish Examiner relates that a county-by-county breakdown
of the figures for this month shows that Dublin accounted for 48%
of all insolvencies, with Wexford the second highest on 10%.

In all, 94 companies held meetings of creditors showing short-
term debts of more than EUR38million, the report notes.

However, the report relates that Vision-net's figures recorded
that 3,053 company and business start-ups this month - up 19% on
the same month last year - showing an average of 122 start-ups
each day.

The professional services sector accounted for almost one-quarter
of new companies, followed by the wholesale and retail sector at
12%, social and personal services at 11%, and information
technology at 8%, Irish Examiner says.  In the first nine months
of the year, 10,439 companies were formed but 10,635 collapsed,
showing a net loss of 196, Irish Examiner relays.

Irish Examiner says that companies in the professional services,
construction, wholesale and retail, real estate, social and
personal services, and manufacturing sectors made up 72% of
closures this year so far.

Vision-net's figures for September show that 455 registered
commercial and consumer judgments worth EUR26.5million were
awarded in the courts, Irish Examiner notes.

The report discloses that of these, 296 were judgments awarded
against consumers worth EUR18.8million, with the Revenue
Commissioners, credit unions, banks, real estate and utilities
making up most of the creditors.

Christine Cullen, managing director of Vision-net, said the
figures show that the domestic economy is showing few signs of
uplift, the report adds.


UNIPOL GRUPPO: Moody's Confirms 'Ba2' Sr. Rating; Outlook Neg.
Moody's Investors Service has confirmed the Ba2 senior rating of
Unipol Gruppo Finanziario S.p.A. (UGF), the holding company of
Unipol Group, and the Baa2 insurance financial strength rating
(IFSR) of Unipol Assicurazioni SpA (Unipol), the main insurance
operating company. The confirmation of the Ba2 senior rating of
UGF and the Baa2 IFSR reflects Moody's view of Unipol's very
strong business profile following the acquisition of a
controlling stake in Fondiaria Sai SpA (Fondiaria Sai; unrated),
which is partly offset by the group's high investment risk and
execution risk arising from the acquisition.

At the same time, Moody's has confirmed Unipol Banca's Ba2 long-
term deposit rating and downgraded the standalone bank financial
strength rating (BFSR) to E, equivalent to a standalone credit
assessment of caa1, from D-/ba3. The lowering of Unipol Banca's
standalone credit assessment reflects Moody's view of the bank's
weak financial fundamentals, and an increased likelihood that the
bank may require further capital support from UGF. The
confirmation of the long-term deposit rating reflects the
confirmation of UGF's ratings, as well as Moody's view of a very
high probability of support from the parent, in case of need.

These actions and announcements conclude the review for downgrade
Moody's initiated on July 17, 2012. All the ratings now carry a
negative outlook, except the BFSR at Unipol Banca which carries a
stable outlook. A complete list of actions is listed below.


In September 2012, UGF raised EUR1.1 billion of equity capital to
fund its proposed purchase of a controlling stake in Fondiaria-
Sai, the second largest Italian P&C insurance group. UGF is
expected to obtain control of over 60% of the newly merged
insurance group, which includes Unipol Assicurazioni, Fondiaria-
Sai, Milano Assicurazioni and Premafin. Unipol's management board
expects to approve the merger by year-end 2012 and to receive
authorisation from the insurance regulator in 2013.

The new insurance group generated by the merger of Unipol and
Fondiaria Sai will be a clear market leader in the Italian P&C
segment, with a pro forma 30% market share, well ahead of the
second (21%) and third (11%) market players. Moody's expects this
strong P&C market position to translate into substantial pricing
power with its customers. The group will continue to focus mainly
on retail P&C insurance, and will also have a sizeable life
insurance business (pro forma, premiums are split 2/3 in P&C, 1/3
in Life).

More negatively, the new group will have a high concentration to
Italian sovereign risk in terms of both its investment portfolio
and business profile. On a pro forma basis, Moody's estimates
that Italian government bonds will represent around 50% of the
new group's total investment portfolio (around 4x pro forma
capital), and almost the entire new group's premiums will be
sourced in Italy. In addition, other investment risks include the
elevated exposure to property (estimated to be over 10% of total
investments on a pro forma basis at year-end 2011), although
Moody's understands that the insurer aims to reduce this exposure
to below 8% by 2015. The level of intangibles is also high as a
percentage of total pro-forma capital for the new group.

Furthermore Moody's views the execution and legal risk of the
merger as high, given its complex nature: the transaction
involves the integration of three listed companies and will
demand considerable management time and effort in securing
operational efficiency. An additional risk is the potential for
further loss-reserve strengthening in the future -- Fondiaria Sai
had already strengthened its reserves by EUR0.8 billion in 2011
-- although this is partially mitigated by Unipol's plan to
strengthen reserves by an additional EUR0.5 billion between 2013-

Moody's views the new group's consolidated capitalization as
adequate and in line with Moody's expectations for a Baa-rated
company. In September 2012, both Unipol and Fondiaria Sai
concluded their capital increases for a total net amount of
EUR1.7 billion (this amount includes EUR1.1 billion raised by
Unipol and an additional EUR1.1 billion raised by Fondiaria Sai,
minus the share of Fondiaria Sai' s capital underwritten by
Unipol). This results in a Solvency I ratio for the new group of
139% on a pro forma basis at year-end 2011 (124%, after deducting
unrealised losses on sovereign bonds). With respect to financial
flexibility, Moody's views the group's financial leverage as
within the rating agency's tolerance levels for the current
rating at a pro forma 34% at year-end 2011. However, earnings
coverage is expected to remain somewhat subdued in 2012.


Unipol Banca's profitability has been weak in recent years, with
net losses in 2008 and 2009, and break-even results in 2010 and
2011 (adjusted to exclude a EUR300 million impairment on
goodwill). In H1 2012, excluding extraordinary gains on debt
buyback, the bank's recurring profitability deteriorated further,
both on a pre-provision and on a net level.

In Moody's view, asset quality is also weak, with gross problem
loans accounting for around 15% of gross loans in 2011,
significantly higher than the Italian average of 8.9% (source:
Bank of Italy's 2011 annual report).

Considering Unipol Banca's low recurring profitability, and its
weak and deteriorating asset quality, Moody's cautions that the
bank's 8.2% core Tier 1 ratio as of June 2012 might not, in its
opinion, provide a sufficient cushion to absorb losses in case of
stress, resulting in a relatively high probability that further
capital support from UGF might be required. In June 2012, Unipol
Banca reported a pre-tax profit of EUR10 million, a decrease of
33% from June 2011, with an increase in provisions for loan
losses and other financial assets of 55% to EUR44 million, and
also benefited from a substantial non-recurring gain on debt

The above rating drivers were the cause for the lowering of
Unipol Banca's standalone credit assessment to caa1. The bank's
long-term deposit rating was, however, confirmed at Ba2, based on
Moody's assessment of a very high probability of parental support
from UGF, resulting in five notches of rating uplift from the
caa1 standalone credit assessment.

In recent years, UGF has demonstrated its willingness and
effectiveness in providing support to Unipol Banca. UGF has
provided support in the form of (1) capital, with around EUR300
million injected between 2009 and 2011, which represents around
one-third of the bank's shareholders' equity in 2011; (2)
liquidity, through the provision of funding to the bank when
required; and (3) asset quality, through a EUR550 million
guarantee for part of the bank's loan portfolio, provided in


Moody's negative outlook on UGF, Unipol and Unipol Banca's long-
term deposit rating reflects the execution challenge arising from
the acquisition of Fondiaria Sai, as well as the risk of further
reserve strengthening for the new group. The negative outlook
also mirrors the negative outlook on Italy's Baa2 government bond
rating and reflects the uncertainties around the economic and
financial environment in Italy.


At present, there is limited upwards pressure on the ratings
given the negative outlook.

Downwards rating pressure could develop following any further
significant reserves strengthening and costs associated to the
integration, including legal and compensatory expenses. Any
significant loss of market share would also exacerbate negative
rating pressures, whilst any further downgrade of Italy's
government bond rating would also likely lead to a downgrade of
Unipol's ratings, due to various credit linkages between the two.
These linkages include the reduced quality of the group's
investment portfolio and the potential constraints on the
profitability of the insurance business, if operating conditions
in Italy decline further.


A degree of upwards pressure could develop on the bank's BFSR
following (1) a substantial increase in the bank's core capital
ratios; and (2) an improvement in the bank's recurring
profitability and asset quality. An upgrade of the bank's BFSR
would be unlikely to result in an upgrade of the deposit ratings,
given the very high level of support Moody's already incorporates
into the deposit ratings. Upwards pressure on the deposit ratings
might develop following an upgrade of UGF's Ba2 long-term debt
rating; however, this is unlikely at present because of the
negative outlook on that rating.

Further deterioration of profitability and asset quality, and/or
a reduction of the bank's core capital ratios, could exert
downwards pressure on the caa1 standalone credit assessment. A
downgrade of UGF, or a reduction in support and commitment from
UGF towards Unipol Banca might lead to a downgrade of Unipol
Banca's long-term deposit rating.

The following ratings were confirmed and their outlook revised to
negative from on review for downgrade:

Unipol Assicurazioni S.p.A. -- insurance financial strength
rating: Baa2

Unipol Assicurazioni S.p.A. -- subordinated debt rating: Ba1

Unipol Gruppo Finanziario SpA -- senior rating: Ba2

Unipol Gruppo Finanziario SpA -- senior MTN rating: (P) Ba2

Unipol Gruppo Finanziario SpA -- long term issuer rating: Ba2

Unipol Banca -- long-term bank deposits rating: Ba2

The following rating was downgraded and outlook revised to stable
from negative:

Unipol Banca -- bank financial strength rating: E/caa1 from D-


The methodologies used in rating Unipol Assicurazioni S.p.A. and
Unipol Gruppo Finanziario S.p.A were Moody's Global Rating
Methodology for Life Insurers published in May 2010, Moody's
Global Rating Methodology for Property and Casualty Insurers
published in May 2010, and Moody's Guidelines for Rating
Insurance Hybrid Securities and Subordinated Debt published in
January 2010.

The principal methodology used in rating Unipol Banca was Moody's
Consolidated Global Bank Rating Methodology published in June


LATVIJAS KRAJBANKA: KMPG Continues Loan Disposal Process
KPMG as Insolvency Administrator to JSC Latvijas Krajbanka is
continuing its loan disposal process launched in June 2012
whereby KPMG is seeking to attract potential investors for the
loan portfolios of JSC Latvijas Krajbanka, in liquidation. The
loans have been split into five tranches based of selected
characteristics of the loans (corporate, retail etc).

KMPG said: "The process for sale of these loan portfolios
proceeds according to schedule and as a result of the initial
market sounding phase to identify potential interested parties,
KPMG has been in contact with or has been contacted by more than
100 parties.

"In its role as the insolvency Administrator KPMG's primary goal
is to maximize the recovery of funds for the Bank's creditors
including the State and accordingly key selection criteria for
potential bidders includes but is not limited to the price
offered by the interested party, the ability to finance the
transaction, the terms of the bid, the willingness to work within
the proposed timetable and the operational experience in
servicing similar sizes and types of loan portfolios.

"Over the next few weeks the Administrator will commence the
second phase of the sale process, during which Parties who have
participated in the first phase and which remain interested and
meet the criteria to be included in the second phase, will be
invited to continue their analysis and submit their binding
offers. KPMG requires that any interested party who has not yet
been invited to participate in Phase 1 expresses their interest
no later than 5 November 2012."

                     About Latvijas Krajbanka

Headquartered in Riga, Latvia, AS Latvijas Krajbanka provides
commercial banking services to businesses and private individuals
in Latvia and the markets of the Commonwealth of Independent
States.  As of Dec. 31, 2009, AS Latvijas Krajbanka had 115
customer service centers and 190 automated teller machines.  AS
Latvijas Krajbanka is a subsidiary of AS banka Snoras.

As reported in the Troubled Company Reporter-Europe on May 10,
2012, Baltic Business News said the Riga District Court on
May 8 decided to start the bankruptcy procedure of Latvijas
Krajbanka.  The move was initiated by Krajbanka's insolvency
administrator SIA KPMG Baltics, BBN disclosed.  The company
believes that it is impossible to revive the bank without state
support, which is not coming, BBN noted.

Latvian regulators halted Krajbanka's operations on Nov. 21,
2011, after discovering LVL167 million (US$301 million) was
missing, Bloomberg News recounted.


BANK ZACHODNI: Moody's Confirms 'D+' BFSR; Outlook Stable
Moody's Investors Service has confirmed Bank Zachodni WBK SA's
(BZ WBK) long-term deposit rating of Baa1 with a negative outlook
and the bank's standalone bank financial strength rating (BFSR)
of D+ (equivalent to a baa3 standalone credit assessment) with a
stable outlook. The short-term deposit rating Prime-2 was also
confirmed. This action concludes the review of the bank's rating
initiated on June 28, 2012.

The announcement follows the confirmation of the ratings of the
bank's parent, Banco Santander SA (Baa2 deposits; BFSR C-/baa2,
Prime-2, Negative) announced on October 24, 2012.

Ratings Rationale

The confirmation of BZ WBK's standalone BFSR D+/baa3 takes into
account the following factors: a) the confirmation of the
parent's ratings and ; b) Moody's view of the Polish subsidiary's
relatively independent franchise from that of the parent; no
reliance on parental funding, strong standalone financial
fundamentals; and stringent regulatory controls on dividend
distributions. The outlook on BZ WBK's stand-alone BFSR D+
(equivalent to a baa3 standalone credit assessment) is stable due
to above mentioned factors that, to some extent, insulate BZ
WBK's stand-alone credit strength from its parent group.

However, Moody's notes that should the worsening operating
conditions in Poland weigh down on the bank's hitherto robust
financial fundamentals, also in light of the proposed merger with
a significantly weaker entity, Kredyt bank (unrated), this could
lead to a possible lowering of the bank's standalone credit
assessment within the same BFSR category.

BZ WBK's long-term rating of Baa1 is sensitive to the downgrade
of parent's stand-alone rating, which remains on negative outlook
after the recent rating actions. The negative outlook on BZ WBK's
long-term rating, therefore, reflects this sensitivity and is
aligned with that of Banco Santander's negative outlook.

Currently, the bank's long-term rating continues to benefit from
a two-notch uplift due to the combination of parental and
systemic support.

As noted in Moody's previous announcement BZ WBK's plans to merge
with Kredyt bank may put pressure on the profitability and
efficiency of the combined entity in the short term but is
expected to have a medium-term positive impact on the franchise.
At this stage the merger plans remain in an intentional bases and
is expected to be approved by the Polish banking regulatory
authorities by end of 2012.

What Could Change The Ratings Up/Down

As a result of the recent rating actions, an upgrade of the banks
ratings is unlikely at the current time. Further downgrade of the
parent and/or a downgrade of the bank's standalone rating would
likely prompt a downgrade of the long-term ratings as indicated

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

PBG SA: CEO Wieslaw Rozacki Steps Down
Poland A.M. reports that Wieslaw Rozacki on Tuesday resigned from
his position as CEO of PBG SA.

He will be replaced by Pawel Mortas, who has been working for the
group since 2010, Poland A.M. discloses.

In June, PBG filed for bankruptcy with the possibility of an
arrangement with creditors, Poland A.M. relates.  According to
Poland A.M., Mr. Rozacki's statement published on Tuesday said
that the main reason for his resignation was the fact that PBG
lost control over its key subsidiary, Rafako, after a series of
transactions that he did not authorize.

PBG SA is Poland's third largest builder.

POLIMEX-MOSTOSTAL: Inwestycje Files Insolvency Motion
Minda Alicja at Polska Agencja Prasowa reports that Inwestycje
Przemyslowe, one of Polimex-Mostostal's creditors, filed an
insolvency and liquidation motion against the company.

According to PAP, the firm said that Polimex considers the motion
to be groundless and will take action aimed at its dismissal.

Polimex-Mostostal is a Polish builder.


* MOSCOW OBLAST: Moody's Upgrades Currency Ratings to 'Ba2'
Moody's Investors Service has upgraded the global-scale foreign
and local-currency ratings of Moscow Oblast to Ba2 from Ba3,
reflecting sustainable improvements in its financials over the
last two years and the rating agency's expectations of strong
results in 2012. The outlook on the ratings is stable.

Ratings Rationale

The rating action is driven by the steady improvement in the
region's operating balances and financing surpluses over the last
two years, and the corresponding fall in its overall debt burden.
These factors have been underpinned by the region's continuing
economic growth and the supportive stance of the federal
government towards the region.

"We expect the region to record an operating margin of between
10% and 15% of operating revenue in 2012, which will be either in
line with or slightly better than previous years' results. Given
that we expects that Moscow Oblast will record a financing
surplus in 2012 (following a 13.5% surplus as a proportion of
revenue in 2011), the region's overall debt should fall to 30%-
35% of operating revenue in 2012 from 41% in 2011 and 63% in
2010," says Alexander Proklov, a Moody's Vice President - Senior
Analyst and lead analyst for Moscow Oblast.

These positive results indicate that the region's administration
has managed to correct the budget imbalances, off-balance
liabilities and debt burden, which were crucial for the region's
rating over past few years. "Successful budget consolidation,
low-interest bearing loans and transfers from the central
government as well as lending through state-owned banks have
supported this overall improvement," adds Mr. Proklov. In
addition, rapid economic growth in 2010-11 has led to growth in
tax revenue and financing surpluses, and Moody's anticipates that
the regional economy will continue to grow in 2012 and likely
beyond at a pace exceeding the national average.

Nevertheless, the ratings remain constrained by the region's
relatively short-term debt maturity profile, which carries
refinancing risks. A possible slowdown in the national economy
would put pressure on the region's tax revenue stream,
particularly its corporate income tax proceeds. Additional
challenges may come from recent federal initiatives to increase
salaries in education and in some other areas of the public
sector, which is not expected to be offset by an appropriate
increase in funding from the federal government. In conjunction
with the growing rigidity of operating expenditure, weakening tax
revenue could lead to a decline in operating balances.

Moody's also notes that the region will need to increase its
infrastructure investments in areas such as road construction and
maintenance, social facilities, housing and utility sectors over
the medium term, which will require external funding and new
borrowing. "Given its financial pressures, the regional
government's capacity to maintain a prudent budget and debt
policy will remain crucial for future rating developments," says
Mr. Proklov.

What Could Change The Ratings Up/Down

Further decline in Moscow Oblast's debt burden, an improving
debt-maturity profile and sustained double-digit operating
margins would be considered as positive rating drivers.

However, weakening of the Oblast's budget and debt management,
coupled with substantial debt growth and material deterioration
in borrowing conditions may exert downward pressure on the

Moscow Oblast is located in the area surrounding the City of
Moscow. With 6.8 million inhabitants, it accounts for 4.8% of the
total population of Russia, and contributions 5% to the total
national GDP.

The methodologies used in this rating were Regional and Local
Governments Outside the US published in May 2008, and The
Application of Joint Default Analysis to Regional and Local
Governments published in December 2008.


AP-36 OCANA-LA: Put Into Bankruptcy by Ferrovial
Lance Duroni at Bankruptcy Law360 reports that eight years after
inking a EUR525 million (US$680 million) contract to build and
operate the AP-36 Ocana-La Roda highway near Madrid, Spanish
infrastructure giant Ferrovial SA has put the asset into
bankruptcy, a spokesman confirmed Thursday.

Madrid-based Ferrovial, which holds a 55% stake in the
AP-36 toll road, and two minority owners requested a "judicial
declaration of voluntary insolvency" for the project from a
Spanish court on Oct. 19, according to the company.


VOLVOFINANS BANK: Moody's Reviews 'D+' BFSR for Downgrade
Moody's Investors Service has placed on review for downgrade
Volvofinans Bank AB's Baa2 long-term deposit rating, P-2 short-
term deposit rating and its D+ bank financial strength rating
(BFSR) which is equivalent to a standalone credit assessment of

Ratings Rationale

The review partly reflects Moody's concerns related to wider
pressures on European auto financing groups following the rating
actions taken on October 19, 2012. Of particular concern is
Volvofinans's interconnectivity with, and financial strength of,
its majority owners: the network of Volvo dealerships, for
example in originating loans and providing guarantees on those

In addition to such general factors, the review reflects Moody's
Volvofinans-specific concerns related to (1) the increase in
unsecured lending through the bank's credit card business and the
increase in non-auto-related unsecured credit card lending; (2)
the high, albeit reduced, dependence on market funding exhibited
by the bank; and (3) uncertainty surrounding the involvement of
AP6, the government pension scheme, which is a 40% shareholder in
the bank.

Volvofinans's credit card offering, the Volvo Card, has become
increasingly important to the bank's profitability. Launched in
1984 as a means of payment and offering discounts for repairs,
services and fuel at Volvo dealers, the card has evolved
following the addition of a VISA offering which allows for
general, non-auto, transactions. Moody's views the subsequent
gradual shift in the business and lending mix as increasing risk,
which requires the adaptation of the risk management culture
beyond the bank's traditional areas of core competence, such as
secured auto lending.

Since obtaining a banking license in 2008, Volvofinans has
established an internet deposit funding base which accounts for
around 45% of total funding at end-June 2011, thereby
significantly reducing the market funding reliance. While the
funding diversification is a credit positive factor, the rating
agency has some concerns over the sustainability of the deposit
base over time, particularly given the internet-based nature of
the deposits, the competitive Swedish banking system and
Volvofinans' modest banking franchise. Moody's also believes that
Volvofinans has had to pay a comparatively high price for this

Volvofinans is 40% owned by the Swedish state-owned pension fund
AP6. In 2011, the Swedish government appointed a Special
Investigator to evaluate the wider Swedish pension system. The
conclusions and recommendations of the report include the
possibility of merging AP6, the only fund with a mandate for
Swedish private equity investments such as that in Volvofinans,
with one or more of the other funds, although the exact
investment mandate for such a merged fund remains unclear. The
report's recommendations will next be considered by the
government before any legislation is drafted. Moody's has
previously regarded the involvement of AP6 as shareholder as
supportive of Volvofinans's credit quality, and consequently any
changes to the rating agency's perception of AP6's role may have
credit implications.

Whilst Volvofinans has some similarities with the other European
auto financing groups, the ratings agency notes it has several
differentiating features. For example, Volvofinans is not
exclusively owned by a single auto manufacturer, has a higher
deposit-to-loan ratio than many other auto finance companies, and
the Swedish macro economy (and therefore auto industry) has been
less impacted than the market in some other European countries.

During the review process, Moody's will primarily focus on
analysing the sustainability of the deposit base, the future role
of the AP6 fund as a part-owner of the bank and any impact that
may have on support, and the similarities or otherwise with the
wider European auto and auto financing markets.

Principal Methodology

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

Unless otherwise stated, all figures shown are from Volvofinans's
annual and/or interim reports.


UBS AG: Moody's Confirms 'B2' Rating on Credit-Linked Notes
Moody's Investors Service has confirmed the rating of the
following notes issued by UBS AG:

Issuer: UBS AG

.Ser 857, EUR1.83m FIX Credit-Linked Zero Cpn Euro Medium Term
Notes, Confirmed at B2; previously on Jul 2, 2012 Downgraded to
B2 and Placed Under Review for Possible Downgrade.

The transaction is a credit linked note issued by UBS AG
referencing the subordinated debt of Banco Bilbao Vizcaya
Argentaria S.A.

Ratings Rationale

Moody's explained that the rating action taken on Oct. 30 is the
result of a rating action on Banco Bilbao Vizcaya Argentaria,
S.A., whose subordinate rating was confirmed at Ba1 on 24 October

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy especially as the transaction
is exposed to an obligor located in Spain and 2) more
specifically, any uncertainty associated with the underlying
credits in the transaction could have a direct impact on the
repackaged transaction.

The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in April

Moody's quantitative analysis of Repacks is designed to estimate
the expected loss "EL" borne by the Repack investor, given the
transaction structure, the Collateral and any other credit risks
arising under the transaction. To this end, Moody's relies on an
EL analysis in which Moody's identifies and attaches
probabilities to events that might give rise to losses to Repack

Moody's EL calculation assesses the probability and severity of
each possible loss-inducing event happening at discrete
(typically one-year) intervals through the life of the
transaction. The EL for each of these time points can then be
aggregated to provide a weighted-average EL for the rated notes.

No additional cash flow analysis have been conducted as the
rating was directly derived as described above using the ratings
of BBVA and UBS. Moody's also applied stresses on the default
probability and severity of the BBVA subordinated debt in order
to take into account the widely defined credit event definitions
and deliverable obligations.


TURKIYE IS BANKASI: Moody's Assigns Ba2 Subordinated Debt Rating
Moody's Investors Service has assigned a first-time Ba2 foreign-
currency subordinated debt rating to the senior subordinated debt
issuance by Turkiye Is Bankasi AS (Isbank). The debt instrument
is expected to be eligible for Tier 2 capital treatment under
Turkish law. The outlook is stable.

Ratings Rationale

Isbank's subordinated debt rating is positioned one notch below
the bank's adjusted standalone credit assessment, and does not
incorporate any rating uplift from systemic (government) support.

Moody's believes that at present, there is a strong prudential
bank-supervisory framework in Turkey. The regulator has extensive
intervention tools available to preserve a bank's solvency and
financial stability within the banking system, although within
Turkey, imposing losses on bank creditors outside of a
liquidation scenario is untested. However, if future regulatory
intervention is required to support Turkish banks, Moody's
believes that the Turkish frameworks for bank resolution could
develop further, similar to the policy initiatives in numerous
banking systems, particularly in Europe.

These frameworks provide for burden sharing of bank bailouts with
bank creditors, in particular affecting the most junior classes
of bank securities. As a result, Isbank's subordinated debt
rating does not incorporate any uplift from systemic support.

What Could Move The Rating Up/Down

The subordinated debt rating is notched off the standalone credit
assessment. Therefore, any upwards or downwards pressure on the
bank's standalone credit profile will result in a similar rating
action on the bank's subordinated debt.

Principal Methodolgies

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

U N I T E D   K I N G D O M

BRIDAL GALLERY: Directors to Decide on Liquidating Chain
Liam Murphy at Liverpool Echo reports that a decision is due to
be made on liquidating a chain of bridal shops which closed down
suddenly earlier this month.

Insolvency specialists Begbies Traynor said directors at The
Bridal Gallery Group Limited will meet within the next 10 days.

According to the report, the chain of north west bridal stores,
which closed with the loss of 28 jobs, has consulted David Moore
of Begbies Traynor, who has recommended that the company be
placed into creditors' voluntary liquidation.

Brides-to-be had laid siege to the Liverpool Bridal Gallery in
Woolton Village after the shop and the family-owned company's
outlets in Chester, Southport, Tarleton and Preston also closed.

"For the past six years the company has failed to produce a
profit and has only remained with the financial support of the
directors," the report quotes Mr. Moore as saying.

"The company experienced a brief upturn in trade but this was
superseded by a quiet period and the directors forecast a quiet
year for 2013 in the wedding market, hence the current

"Directors, working together with Begbies Traynor, are now making
all efforts for as many brides as possible to see their orders
for dresses being completed in time for their big day."

Eric Stables from The Bridal Gallery told the ECHO: "We wrote to
all employees on Monday advising them that they would be paid in

WESTMORLAND GAZETTE: 20% of Cumbria Pubs at Risk of Collapse
Helen Perkins at The Westmorland Gazette reports that insolvency
experts have warned that nearly a third of Cumbria's pubs and
bars are at risk of failure in the next 12 months.

The report, citing figures released by insolvency trade body R3,
discloses that 46 pub businesses in Cumbria face collapse.  Some
restaurants are also struggling, with 20% considered at risk,
equivalent to 38 businesses.

The Westmorland Gazette says R3's findings come as Punch Taverns,
the UK's largest pub operator, has revealed it is experiencing
financial distress.

"The downturn has gone on far longer than could have been
predicted and it is getting harder for people to find the money
to spend on discretionary items," the report quotes Jeremy Oddie,
the North West regional chair of R3, as saying.  "The strain on
pubs and bars is really showing."

The report relates that despite the grim reading for hospitality
workers, latest statistics suggest Cumbrian establishments are
faring marginally better than the national average.

In the UK, the report says, 35% of pubs are at risk and in London
the figure has reached 37%.


IPAK YULI: Moody's Assigns 'B2/E+' Ratings; Outlook Stable
Moody's Investors Service has assigned a standalone E+ bank
financial strength rating (BFSR) and B2/Not Prime long-term and
short-term global local and foreign currency deposit ratings to
Joint Stock Innovation Commercial Bank "Ipak Yuli" ("Ipak Yuli")
which operates in the Republic of Uzbekistan. The outlook on all
of the bank's ratings is stable.

Ratings Rationale

According to Moody's, Ipak Yuli's E+ BFSR (which maps to a
standalone credit assessment of b2) and B2 deposit ratings are
constrained by (i) high single-name concentration whereby the
aggregate credit exposure to the top five borrowers amounted to
77% of the bank's Tier 1 capital as at January 1, 2012, (ii) the
unseasoned nature of the bank's rapidly growing loan portfolio
that grew 48% in 2011, as well as (iii) immobilization of a large
proportion of the bank's capital (approximately two thirds of
Tier 1 capital as at year-end 2011) in real estate holdings,
although these assets comprise the office buildings used for Ipak
Yuli's core banking activities.

Factors underpinning Ipak Yuli's ratings include (i) a wide
distribution network of 11 branches and 62 mini-banks providing
good client outreach throughout the whole territory of the
Republic of Uzbekistan, as well as entrenched positions in
certain market niches; (ii) sound profitability underpinned by
stable and recurring core earnings, including a robust fee and
commission component which accounted for 48% of total revenues in
2011; (iii) the good quality of the bank's loan portfolio, to
date, with 4% of all loans being impaired and another 2.5% of the
loans being less than 90 days 'past due' at year-end 2011; and
(iv) its diversified funding mix which includes both customer
deposits and wholesale funding (the latter derived from the state
and international financial institutions).

Moody's explained that Ipak Yuli's global local currency deposit
ratings of B2/Not Prime do not incorporate any element of
systemic support given the bank's limited franchise value and its
low importance for the Uzbek banking system as a whole. Nor do
Ipak Yuli's ratings incorporate any probability of shareholder
support to the bank, in case of distress.

What Could Change The Ratings Up/Down

According to the rating agency, Ipak Yuli's BFSR has limited
upside potential at its current level. However, in the longer
term, the BFSR might map to a higher standalone credit assessment
(currently b2), if the bank were to diversify its credit
exposures and decrease the level of its fixed assets as a
proportion of capital, thus increasing the proportion of "free"
capital. These conditions would also need to be accompanied by
sustainably good asset quality and sound financial fundamentals.

Negative pressure could be exerted on Ipak Yuli's ratings as a
result of the bank's failure to maintain (i) a good-quality loan
book, (ii) a sustainably strong financial performance, and (iii)
adequate capital and liquidity cushion. A substantial increase in
the volume of related-party business or non-core investments
(such as equities or fixed assets) represents another factor that
could have an adverse impact on Ipak Yuli's ratings.

Principal Methodologies

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

Headquartered in Tashkent, Uzbekistan, Ipak Yuli reported --
under audited IFRS -- total assets of US$354 million and total
shareholder equity of US$31 million as at December 31, 2011; net
IFRS income for 2011 stood at US$7 million.


* EUROPE: Moody's Says Covered Bond Downgrades Accelerates
European-covered bond downgrades have increased sharply over the
last few months, says Moody's Investors Service in a new Special
Comment published on Oct. 30. In the seven months since February
2012, the overall level of covered bond downgrades was similar to
the level seen in the four years before this period (between the
start of the global financial crisis in 2008 and February 2012).

The new report, entitled "European Covered Bonds: Downgrades
Accelerate due to Bank and Sovereign Credit Deterioration", is
now available on Moody's subscribers can access
this report via the link provided at the end of this press

Moody's has based this rating migration study on the performance
of European covered bonds outstanding as of January 1, 2008, and
analyses these bonds' performance over the crisis. The analysis
is split between covered bond performance in countries that have
experienced a sovereign downgrade during the crisis (downgraded
sovereigns), and those where the sovereign has not experienced a
downgrade over the crisis (stable sovereigns). This study is an
update on the initial study published in March this year.

Moody's says that the gulf in the performance of covered bonds
between stable sovereigns and downgraded sovereigns persists;
covered bond downgrades in downgraded sovereigns remain ten times
higher than the level of downgrades in stable sovereigns.

"The primary cause of the covered bond rating downgrades
continues to be the downgrades of the banks supporting the
covered bonds, with the impact of these downgrades being
particularly severe in downgraded sovereigns," explains Juile Ng,
a Moody's analyst and author of the report.

"A reason for this is that the uplift a covered bond can achieve
over and above its supporting bank is further restricted as the
credit strength of the sovereign deteriorates," adds Ms. Ng.

Moody's notes that the average notch downgrade of covered bonds
in downgraded sovereigns since the start of 2008 is now over
seven notches, whilst the equivalent number for stable sovereigns
is lower than one notch.

The average level of covered bond downgrades remains below the
level of downgrades in the banks supporting the covered bonds.
Moody's explains that this difference is due, among other things,
to the collateral provided to the covered bonds by the supporting
banks. The lower level of rating migration in covered bonds is
most evident in the case of stable sovereigns.

* Upcoming Meetings, Conferences and Seminars

November 1-3, 2012
     TMA Annual Convention
        Westin Copley Place, Boston, Mass.

Nov. 29 - Dec. 2, 2012
     Winter Leadership Conference
        JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
           Contact: 1-703-739-0800;

April 10-12, 2013
     TMA Spring Conference
        JW Marriott Chicago, Chicago, Ill.

October 3-5, 2013
     TMA Annual Convention
        Marriott Wardman Park, Washington, D.C.


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
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Information contained herein is obtained from sources believed to
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