TCREUR_Public/121107.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, November 7, 2012, Vol. 13, No. 222

                            Headlines



A Z E R B A I J A N

ATABANK: Fitch Assigns 'B-' Long-Term Issuer Default Rating


D E N M A R K

TOENDER BANK: Shareholder Group Mulls Legal Options


I R E L A N D

ASHFORD CASTLE: Up for Sale Again
MERCATOR CLO I: S&P Cuts Rating on Class B-2 Def Notes to 'CCC+'
WINDMILL CLO: Moody's Confirms 'Ba3' Rating on Class E Notes


I T A L Y

ROTTAPHARM SPA: Moody's Assigns '(P)B1' Corp. Family Rating
ROTTAPHARM SPA: S&P Assigns Prelim. 'BB-' LT Corp. Credit Rating


K A Z A K H S T A N

KAZAKH AGRARIAN: S&P Rates KZT3-Bil. Sr. Unsecured Debt Issue BB+
KAZAKH AGRARIAN: S&P Rates KZT2-Bil. Sr. Unsecured Debt Issue BB+


L U X E M B O U R G

ALTISOURCE SOLUTIONS: Moody's Assigns 'B1' CFR; Outlook Stable


N E T H E R L A N D S

INVESCO CONISTON: S&P Lowers Rating on Class E Notes to 'CCC+'


N O R W A Y

NORSKE SKOGINDUSTRIER: Moody's Changes PDR to 'Caa1/LD'


P O L A N D

PBG SA: Avatia Unit Secures Bankruptcy Protection
* POLAND: Corporate Bankruptcies Up 66% in October


R U S S I A

SVERDLOVSK OBLAST: S&P Affirms 'BB+' LT Issuer Credit Rating


S P A I N

BANKIA SA: S&P Takes Rating Actions on 7 RMBS Transactions
IM SABADELL: S&P Downgrades Rating on Class A2 Notes to 'BB'


S W E D E N

PANAXIA: Subsidiary's Top Executives Probed Over Alleged Fraud


U N I T E D   K I N G D O M

GLASTONBURY FINANCE: Fitch Affirms 'C' Ratings on 3 Note Classes
GREY STREET HOTEL: In Administration, Seeks Buyer
HIBU PLC: Moody's Downgrades CFR to 'Ca'; Outlook Negative
MF GLOBAL: UK Unit is Non-defaulting Party, Judge Rules
PATTON GROUP: Expects to Enter Into Administration

PUNCH TAVERNS: Fitch Cuts Ratings on Three Note Classes to 'CCC'
PUNCH TAVERN: Fitch Lowers Rating on Class C(R) Notes to 'CCC'
YOUNG EUROPEAN: In Administration After Falling Into Arrears


                            *********


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A Z E R B A I J A N
===================


ATABANK: Fitch Assigns 'B-' Long-Term Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has assigned Azerbaijan-based AtaBank (AB) a Long-
term Issuer Default Rating (IDR) of 'B-' with a Stable Outlook.

RATING ACTION RATIONALE: IDRs, VIABILITY RATING, SUPPORT RATING,
SUPPORT RATING FLOOR

AB's IDRs and VR reflect its vulnerable asset quality resulting
from Azerbaijan's high-risk operating environment, its limited
loss absorption capacity, moderate liquidity and concentrated
franchise.

Support from the bank's shareholders has not been factored into
the ratings, although Fitch considers the bank's close
connections to the Azerbaijan authorities as mildly positive for
creditors.  At the same, direct assistance from the Azerbaijan
authorities cannot be relied upon at all times, in Fitch's view,
due to AB's limited systemic importance (just 1.6% of sector
assets at end-2011), and the poor track record of state support
even for the largest bank in the country, state-owned
International Bank of Azerbaijan ('BB+'/RWN).

RATING DRIVERS: IDRs AND VR

At end-H112 AB's statutory capital adequacy ratio was 13.3%,
which Fitch regards as tight, particularly in light of the bank's
concentrated loan book (with the top 25 exposures equal to 2.2x
Fitch core capital, FCC) and notable level of unreserved problem
assets.  Impaired loans amounted to 6.2% of the gross portfolio
at end-H112 and were only 29% covered by loan impairment reserves
(LIRs), with the unreserved portion equal to 19% of FCC.  Fitch
has additional concerns about two interbank loans (further 28% of
FCC), which are non-performing or potentially problematic.  Fitch
estimated that AB had the ability to increase its LIR only to
4.5% of gross loans (73% of NPLs) or to cover 70% of the
abovementioned interbank exposures at end-H112 before its capital
adequacy ratio would have hit the regulatory 12% minimum.

AB's internal capital generation has been hampered by weak
operating efficiency, and the bank's net interest margin has been
below the peer average (albeit partly as a result of
participation in projects financed by the National Fund for
Support of Entrepreneurship), potentially indicating that the
proportion of related party lending could be much higher than the
reported 11.6% of the loan book at end-2011.

Absent of sufficient capital generation capacity, AB depends on
timely capital injections from shareholders to support growth.
The bank indicated that a new equity injection will most likely
take place by the end of 2012, in preparation for compliance with
the new minimum AZN50m regulatory capital requirement (effective
from 1 January 2014).

At end-7M12, AB's total available liquidity covered just 16% of
its total customer accounts, which Fitch regards as quite modest
in light of AB's rather concentrated funding base (the top 20
depositors accounted for 58% of total customer funding).  At the
same time, the bank had no wholesale refinancing needs, and
funding diversification is to be targeted through utilization of
the bank's branch network (the fifth-largest in Azerbaijan).

RATING SENSITIVITIES: IDRs AND VR

Downside pressure on AB's ratings could arise if there was
intensified pressure on capital, in particular as a result of
credit impairment, or insufficient equity injections.  A severe
weakening of the Azerbaijan economy or the country's political
stability, for example in case of a much lower oil price, would
also be negative.

Near-term upside potential for AB's ratings is limited. However,
strengthening of the bank's capital, improvements in
profitability metrics and reasonable expansion of the bank's
franchise would be credit positive.

RATING SENSITIVITIES: SUPPORT RATING AND SRF

The Support Rating and SRF could be upgraded if there is a marked
increase in AB's systemic importance and the depth of its
franchise, or if the Azerbaijan authorities more clearly
demonstrate their readiness to support the country's non state-
owned banks.  However, Fitch views such changes as unlikely in
the near term.

The rating actions are as follows:

  -- Long-term foreign-currency IDR: assigned 'B-'; Outlook
     Stable
  -- Short-term foreign-currency IDR: assigned 'B'
  -- Viability Rating: assigned 'b-'
  -- Support Rating: assigned '5'
  -- Support Rating Floor: assigned 'No Floor'



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D E N M A R K
=============


TOENDER BANK: Shareholder Group Mulls Legal Options
---------------------------------------------------
Frances Schwartzkopff at Bloomberg News reports that the Danish
Shareholders Association said it is considering its legal options
after members lost about DKK260 million (US$45 million) from the
failure of Toender Bank A/S on November 2.

According to Bloomberg, the group said in an e-mailed statement
on Tuesday that it is "gathering shareholders and capital note
holders to investigate the possibilities to seek damages for a
portion of the losses in the scandalous bank failure".

As reported by the Troubled Company Reporter-Europe on Nov. 6,
2012, Bloomberg News related that Toender Bank was forced to
declare bankruptcy after markets closed on Nov. 2, following an
inspection by the Financial Supervisory Authority that revealed
bad loans big enough to wipe out the lender's equity, Sydbank
A/S, Denmark's third-largest listed lender, will take over
Toender Bank's 18,000 customers and a balance sheet of
DKK2.3 billion (US$396 million), Bloomberg disclosed.

Toender Bank A/S is a regional bank based in southwest Denmark.



=============
I R E L A N D
=============


ASHFORD CASTLE: Up for Sale Again
---------------------------------
Maeve Connolly at Irish Times reports that Ashford Castle has
been put on sale again after going into receivership last year.

The five-star hotel is still trading and charged EUR315 a night
for a room in July, making it the most expensive hotel in
Ireland, according to the broker managing the sale, according to
Irish Times.

Ashford Castle began trading as a hotel in 1939 and has 83
bedrooms.


MERCATOR CLO I: S&P Cuts Rating on Class B-2 Def Notes to 'CCC+'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit rating on
Mercator CLO I PLC's class A-1 and A-2 notes. "At the same time,
we lowered our rating on the class B-2 deferrable notes and
affirmed our ratings on the class A-3 deferrable and B-1
deferrable notes," S&P said.

"Since our last review on Sept. 15, 2011, and according to the
latest available trustee report (dated Oct. 2, 2012), the class
A-1 notes have continued to amortize to EUR187 million from
EUR254 million as the transaction entered its second year of
amortization, leading to increased credit enhancement levels
for all classes, except for class B-2," S&P said.

"We have noticed that the weighted-average spread generated by
the portfolio has increased to 3.66% from 3.13%, and that the
weighted-average life has decreased to 3.8 years from 4.4 years.
In addition, we note that the weighted-average recovery rates
have slightly decreased," S&P said.

"We have observed a slight deterioration in the credit quality of
the underlying assets in the portfolio, which comprise loans to
primarily speculative-grade corporate obligors," S&P said.

"Our analysis indicates that the proportion of loans rated in the
'CCC' category has remained stable at about 8%, but defaulted
assets now account for 2.8% compared with none last time," S&P
said.

"As a result, we note that the class B-2 deferrable notes are now
marginally failing their par value test. The test, which measures
the level of overcollateralization available, caused excess
interest to be diverted toward a further redemption of the class
A-1 notes, in order to bring the test back to compliance. Note,
however, that all other par value tests have improved due to the
amortization of the class A-1 notes," S&P said.

"Following our cash flow analysis, we consider the level of
credit enhancement available to the class A-1 and A-2 notes to be
commensurate with higher ratings. We have therefore raised our
rating on the class A-1 notes to 'AA+ (sf)' from 'AA (sf)' and to
'AA- (sf)' from 'A+ (sf)' on the class A-2 notes," S&P said.

"Our affirmations of the ratings on the class A-3 deferrable, and
B-1 deferrable notes reflect our view that the credit support for
these notes continues to be commensurate with our current
ratings," S&P said.

"We have lowered our rating on the class B-2 deferrable notes to
'CCC+ (sf)' from 'B- (sf)'as they are constrained by the
application of the largest bligor default test, a supplemental
stress test that we introduced as part of our criteria update or
by the largest industry default test, another of our supplemental
stress tests," S&P said.

"Approximately 20% of the assets in the transaction's portfolio
are non-euro-denominated, while the liabilities are all in euros.
To mitigate the risk of foreign-exchange-related losses, the
issuer has entered into currency options and interest rate
derivative agreements with JPMorgan Chase Bank N.A.
(A+/Negative/A-1) as counterparty. Under our 2012 counterparty
criteria, our analysis of the derivative counterparty and its
associated documentation indicates that, absent other mitigants,
it cannot support ratings on the notes that are higher than 'AA-
(sf)'. To assess the potential impact on our ratings, we have
assumed that the transaction does not benefit from the
currency options and derivative agreements. We concluded that, in
this scenario, the class A-1 notes would still be able to achieve
a 'AA+ (sf)' rating, whereas the class A-2 notes can only achieve
a 'AA- (sf)' rating in either scenario," S&P said.

Mercator CLO I is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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:

          http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class              Rating
            To               From

Mercator CLO I PLC
EUR413 Million Floating-Rate Notes

Ratings Raised

A-1         AA+ (sf)          AA (sf)
A-2         AA- (sf)          A+ (sf)

Rating Lowered

B-2 Def     CCC+ (sf)          B- (sf)

Ratings Affirmed

A-3 def     BBB+ (sf)
B-1 def     BB+ (sf)

Def-Deferrable.


WINDMILL CLO: Moody's Confirms 'Ba3' Rating on Class E Notes
------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Windmill CLO I Limited:

    EUR55M EUR55,000,000 Class B Senior Secured Deferrable
    Floating Rate Notes due 2029, Upgraded to Aa3 (sf);
    previously on Jul 10, 2012 A1 (sf) Placed Under Review for
    Possible Upgrade

    EUR32M EUR32,000,000 Class C Senior Secured Deferrable
    Floating Rate Notes due 2029, Upgraded to Baa1 (sf);
    previously on Jul 10, 2012 Baa2 (sf) Placed Under Review for
    Possible Upgrade

Moody's confirmed the ratings of the following notes issued by
Windmill CLO I Limited:

    EUR21M EUR21,000,000 Class D Senior Secured Deferrable
    Floating Rate Notes due 2029, Confirmed at Ba2 (sf);
    previously on Jul 10, 2012 Ba2 (sf) Placed Under Review for
    Possible Upgrade

    EUR15M EUR15,000,000 Class E Senior Secured Deferrable
    Floating Rate Notes due 2029, Confirmed at Ba3 (sf);
    previously on Jul 10, 2012 Ba3 (sf) Placed Under Review for
    Possible Upgrade

Windmill CLO I Limited, issued in October 2007, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by 3i Debt Management Investments Ltd. This transaction
will be in reinvestment period until December 2014. It is
predominantly composed of senior secured loans.

Ratings Rationale

According to Moody's, the rating actions taken on the notes are
primarily a result of a correction to the rating model Moody's
used for this transaction. Moody's corrected the rating model and
put the ratings of above tranches on review for upgrade on 10
July, 2012. The actions also reflects the stable performance of
the transaction since the last rating action in October 2011.

Moody's notes that the overcollateralization ratios of the rated
notes have decreased since the rating action in October 2011. The
Class A, Class B, Class C, Class D and Class E
overcollateralization ratios are reported at 149.84%, 128.01%,
118%, 112.24 and 108.46%, respectively, versus August 2011 levels
of 151.66%, 129.56%, 119.43%, 113.60% and 109.78%, respectively.
All coverage tests are currently in compliance. The reported WARF
improved slightly from 2894 to 2850 between August 2011 and
August 2012 whilst the weighted average spread increased from
3.17% to 3.71%.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR473.63
million, defaulted par of EUR17.69 million, a weighted average
default probability of 23.13% (consistent with a WARF of 2953), a
weighted average recovery rate upon default of 44.08% for a Aaa
liability target rating, a diversity score of 44 and a weighted
average spread of 3.31%. The default probability is derived from
the credit quality of the collateral pool and Moody's expectation
of the remaining life of the collateral pool. The average
recovery rate to be realized on future defaults is based
primarily on the seniority of the assets in the collateral pool.
For a Aaa liability target rating, Moody's assumed that 85.6% of
the portfolio exposed to senior secured corporate assets would
recover 50% upon default, while the remainder non first-lien loan
corporate assets would recover 10%. In each case, historical and
market performance trends and collateral manager latitude for
trading the collateral are also relevant factors. These default
and recovery properties of the collateral pool are incorporated
in cash flow model analysis where they are subject to stresses as
a function of the target rating of each CLO liability being
reviewed.

In the process of determining the final ratings, Moody's took
into account the results of a number of sensitivity analyses:

(1) Deterioration of credit quality to address the refinancing
and sovereign risks -- Approximately 22.5% of the portfolio are
rated B3 and below and maturing between 2014 and 2016, which may
create challenges for issuers to refinance. Approximately 11% of
the portfolio are exposed to obligors located in Greece,
Portugal, Ireland, Spain and Italy. Moody's considered a model
run where the base case WARF was increased to be 3409 by forcing
ratings on 25% of such exposure to Ca. This run generated model
outputs that were one to two notches lower than the base case
results.

(2) Higher weighted average life -- Because there is more than
two years remaining until the end of the reinvestment period,
Moody's modelled an extension by 1 year to the amortization
profile modelled in its base case. This run generated model
outputs that were within one notch off the base case results.

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 and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the manager's investment strategy and behavior and 2)
divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties are described
below:

1) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility in
market prices. Realization of higher than expected recoveries
would positively impact the ratings of the notes.

2) Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which may be
extended due to the manager's decision to reinvest into new issue
loans or other loans with longer maturities and/or participate in
amend-to-extend offerings. Moody's tested for a possible
extension of the actual weighted average life in its analysis.

3) Other collateral quality metrics: The deal is allowed to
reinvest and the manager has the ability to deteriorate the
collateral quality metrics' existing cushions against the
covenant levels. Moody's analyzed the impact of assuming lower of
reported and covenanted values for weighted average rating
factor, weighted average spread, and diversity score. However, as
part of the base case, Moody's considered spread and coupon
levels higher than the covenant levels due to the large
difference between the reported and covenant levels.

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

Moody's modelled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.

This model was used to represent the cash flows and determine the
loss for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. As such, Moody's
analysis encompasses the assessment of stressed scenarios.

In addition to the quantitative factors that are explicitly
modelled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action may be negatively affected.



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I T A L Y
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ROTTAPHARM SPA: Moody's Assigns '(P)B1' Corp. Family Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B1
corporate family rating (CFR) and a provisional (P)B1 probability
of default rating (PDR) to Rottapharm SpA. At the same time,
Moody's has assigned a provisional (P)Ba3 rating to the company's
proposed EUR400 million senior unsecured notes. The outlook is
stable. This is the first time that Moody's has rated Rottapharm.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon closing of the refinancing and a
conclusive review of the final documentation, Moody's will
endeavor to assign definitive ratings to Rottapharm. A definitive
rating may differ from a provisional rating. The ratings assigned
to Rottapharm assume a successful refinancing of the company's
current financing package.

Ratings Rationale

"We based our assignment of a (P)B1 CFR to Rottapharm on the
company's relatively high gross leverage at the outset; its high
exposure to southern Europe, particularly Italy, which represents
around 31% of the company's sales; and the overall modest scale
of the company with revenues of around EUR550 million," says Knut
Slatten, a Moody's Analyst. "These factors are balanced to an
extent by (1) a defensive business risk profile, which to a large
degree shelters the company from typical pharmaceutical related
industry-risks such as patent expiries, pipeline execution and
litigation; (2) a solid positioning within its product-categories
with an overall limited product concentration; and (3) healthy
profit margins, which, in combination with the company's asset
light model, lead to expectations of continued strong free cash
flow (FCF) generation", continued Mr. Slatten.

Whilst initially focusing on traditional pharmaceuticals, the
company's business model has evolved more towards a focus on
semi-ethicals (over-the-counter (OTC), Rx non-reimbursed,
consumer healthcare), following the strategic choice of the
company to move away from drugs subject to issues such as
reference pricing and patent expiry. Currently, 69% of company
sales are neither reimbursed nor affected by price restrictions.
The unique strategy of the company consists of concentrating
their efforts on targeting decision-makers (i.e., physicians and
pharmacists) with clinical data for their products. Every new
product or existing product line-extension in the semi-ethical
segment is backed up by clinical studies showing the clinical
benefit of the product, thereby positioning it more favorably
with the relevant decision-makers.

Over the years, the company has been able to grow its business
and maintain strong operating margins. However, Moody's notes
that Rottapharm has not been completely sheltered from the
economic downturn. The company has suffered particularly large
sales-declines in Spain and Portugal, which have a
disproportionally higher share of Rx-reimbursed drugs in their
business-mix, due to price cuts. More positively, Moody's notes
that Rottapharm's performance in its core market of Italy has
held up well thus far with continued growth. Nevertheless,
Moody's considers Rottapharm's high overall concentration in
Italy to be a risk-factor.

Rottapharm is proposing the issuance of EUR400 million in senior
unsecured notes, as well as putting in place a new bilateral bank
facility of EUR100 million to repay the majority of existing bank
debt in the current capital structure. Moody's has assigned a
(P)Ba3 rating, LGD3, 35% to the EUR400 million senior unsecured
notes. The one notch uplift of the notes, which will be issued by
Rottapharm Ltd, is explained by (1) their slightly more favorable
positioning within the structure compared to the bank loans; and
(2) the stronger guarantee package allowing for the bond claim to
be senior to the bank loans with respect to entities representing
around 38% of total consolidated EBITDA and 50% of tangible
assets. In total, the notes will benefit from guarantees
representing approximately 86% of EBITDA. However, Moody's
cautions that the relative preferential positioning of the notes
will diminish with time, in line with the amortizing bank debt
ahead of the notes, though this could be offset by positive
pressure on the CFR should this debt be permanently repaid
thereby reducing leverage.

Moody's expects that Rottapharm's liquidity profile will remain
adequate going forward. Whilst expectations of positive FCF and
high cash-balances support the overall liquidity profile, the
absence of a revolving credit facility (RCF) in the capital
structure limits the overall liquidity cushion. Moody's expects
that Rottapharm will maintain a solid cushion to its financial
covenants.

The stable outlook on the rating reflects Moody's expectations of
further deleveraging going forward underpinned by continued
positive FCF generation. The stable outlook does not incorporate
expectations of large acquisitions and/or material up streaming
of cash to shareholders.

What Could Change The Rating Up/Down

Positive pressure on the rating could develop should operating
performance continue to improve allowing for debt/EBITDA to move
towards 4.0x. Conversely, negative pressure could develop if
leverage moves above 5.0x.

Principal Methodology

The principal methodology used in rating Rottapharm Ltd and
Rottapharm SpA was the Global Pharmaceutical Industry Methodology
published in October 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Rottapharm SpA is an Italian based pharmaceutical company
represented in more than 85 countries worldwide. For the twelve
months ended June 30, 2012, it reported total net revenues of
EUR550 million and Adjusted EBITDA of EUR147.4 million.


ROTTAPHARM SPA: S&P Assigns Prelim. 'BB-' LT Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB-'
long-term corporate credit rating to Italy-based pharmaceuticals
group Rottapharm SpA.  The outlook is stable.

"At the same time, we assigned our preliminary 'BB-' issue rating
to the proposed EUR400 million senior unsecured notes due 2019 to
be issued by Rottapharm Ltd. The preliminary recovery rating on
these notes is '3', indicating our expectation of meaningful
(50%-70%) recovery in the event of a payment default," S&P said.

"The final ratings will be subject to the successful issuance of
the proposed notes and will depend on our receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. If Rottapharm does not place the
notes, if Standard & Poor's does not receive the final
documentation within a reasonable time frame, or if the final
documentation departs from the materials we have already
reviewed, we reserve the right to revise or withdraw our
ratings," S&P said.

"The ratings on Rottapharm reflect our view of the group's 'fair'
business risk profile, supported by a profitable and diversified
portfolio of products. However, 31% of these products are
reimbursed and exposed to pricing pressure as a result of
austerity measures being implemented in Europe. The ratings
also reflect Rottapharm's 'aggressive' financial risk profile,
with Standard & Poor's-adjusted funds from operations (FFO) to
debt of less than 20% and debt to EBITDA in the 3x-4x range, but
resilient free cash flow generation," S&P said.

"Our assessment of Rottapharm's business risk profile reflects
the group's relatively small size, and its exposure to both
southern Europe (about 47% of revenues) and changes in government
reimbursement policies. We anticipate that austerity measures and
cuts in public funding will put pressure on prices in Europe for
the rest of 2012 and 2013. The group's sales and EBITDA declined
in both 2010 and 2011, primarily reflecting unexpected cuts in
reimbursement rates and disruptions to revenues in Thailand due
to floods," S&P said.

"Our assessment of Rottapharm's financial risk profile takes into
account our view that the group's adjusted FFO to debt will not
improve significantly in 2012. The group's adjusted debt-to-
EBITDA ratio stood at 3.7x at year-end 2011 and we estimate that
its leverage ratio will peak at 3.8x at year-end 2012, when it
establishes the new financial structure. We anticipate that
Rottapharm's annual capital expenditure will not exceed EUR10
million and that this, together with the group's strong
profitability and its cash conversion, will help it to generate
strong free cash flow that we estimate at about EUR75 million in
2013," S&P said.

"In our view, Rottapharm's operational underperformance has
bottomed out and that the group will continue to generate
positive cash flows. We expect EBITDA to stabilize in 2012 and
recover from 2013. The group's solid portfolio and its presence
in emerging markets should fuel future growth and offset possible
additional pricing pressure in southern Europe. We assume low
single-digit revenue growth over the next 12-18 months and
believe that the group's operating margin will remain resilient
to possible pressure on the pricing of some of its prescription
drugs," S&P said.

"We anticipate a steady improvement of the group's debt
protection metrics on the back of healthy free cash flows. We
view adjusted FFO to debt of more than 2% as commensurate with
the 'BB-' rating. Consequently, anything less than this would
place the ratings would under pressure. Rating pressure could
also arise if the group's sales and profitability deteriorate
following last year's Underperformance," S&P said.

"Ratings upside is contingent on adjusted FFO to debt in excess
of 20%, as well as on evidence of growth in the group's EBITDA
after the decline of 2011 and the stabilization we anticipate in
2012," S&P said.



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


KAZAKH AGRARIAN: S&P Rates KZT3-Bil. Sr. Unsecured Debt Issue BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
debt rating and 'kzAA-' Kazakhstan national scale rating to the
proposed Kazakhstani tenge (KZT) 3 billion (about US$20 million)
senior unsecured debt issue to be placed in 2012 by Kazakh
Agrarian Credit Corp. (KACC; BB+/Stable/B; Kazakhstan national
scale 'kzAA-'). KACC is a state-owned provider of subsidized
credit to agricultural and nonagricultural businesses in rural
areas throughout the Kazakhstan (Republic of) (BBB+/Stable/A-2;
Kazakhstan national scale 'kzAAA').

KACC is issuing the bond under its KZT6 billion issuance program
for 2011-2012. The bond will have a maturity of three years.

The ratings on the bond mirror those on the issuer.

"The ratings on KACC reflect its stand-alone credit profile,
which we assess at 'b+', plus our opinion of a 'high' likelihood
of timely and sufficient extraordinary support from the Kazakh
government in the event of financial distress," S&P said.


KAZAKH AGRARIAN: S&P Rates KZT2-Bil. Sr. Unsecured Debt Issue BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
debt rating and 'kzAA-' Kazakhstan national scale rating to the
Kazakhstani tenge (KZT) 2 billion (about US$13 million) senior
unsecured debt issue originally issued in 2009 by Kazakh Agrarian
Credit Corp. (KACC; BB+/Stable/B; Kazakhstan national scale
'kzAA-'). KACC is a state-owned provider of subsidized credit to
agricultural and nonagricultural businesses in rural areas
throughout the Kazakhstan (Republic of) (BBB+/Stable/A-2;
Kazakhstan national scale 'kzAAA').

KACC bought back the bond in 2011 and is planning to place it
again under the same serial number KZ2COYO5D679. The bond matures
in 2014.

The ratings on the bond mirror those on the issuer.

"The ratings on KACC reflect its stand-alone credit profile,
which we assess at 'b+', plus our opinion of a 'high' likelihood
of timely and sufficient extraordinary support from the Kazakh
government in the event of financial distress," S&P said.



===================
L U X E M B O U R G
===================


ALTISOURCE SOLUTIONS: Moody's Assigns 'B1' CFR; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned a first-time B1 Corporate
Family Rating ("CFR") to Altisource Solutions S.a.r.l.
(Altisource) as well as a B1 Senior Secured Bank Credit Facility
rating to the company's planned US$200 million senior secured
term loan; both with a stable outlook.

Ratings Rationale

The B1 rating is largely driven by the company's high reliance on
Ocwen (B1/STA). Altisource was spun off from Ocwen in 2009 and
currently derives approximately 60% of overall revenue from
Ocwen. In addition, Altisource, with US$550 million of revenues,
is relatively small compared to its mortgage business service
company peers: LPS and CoreLogic with approximately US$2.0
billion and US$1.5 billion in annual revenue, respectively.
Excluding Ocwen, the company generates approximately US$200
million in annual revenues, making the company far smaller than
its mortgage business service company peers.

The company benefits from its low leverage, strong cashflow, and
solid earnings, which compares favorably to other B1 peers. In
addition, the company has several promising new business
opportunities, in particular in origination services through its
Lenders One and Ocwen relationships.

The rating outlook is stable, reflecting Moody's expectation that
Altisource's revenues will increase significantly over the next
year largely as a result of Ocwen's growth. However, this will
result in Altisource being further reliant on Ocwen for revenue.

In addition to benefiting from Ocwen's growth, the company's
growth strategy is focused on increasing revenue from property
management and origination related services. The US$200 million
of loan proceeds are expected to be used to: (i) up to US$105
million to fund the spin-off of Altisource Residential and
Altisource Asset Management (a residential rental property
business which Altisource Asset Management will manage and
receive management fees), (ii) acquire fee based services
businesses associated with mortgage servicing, (iii) general
corporate purposes, and (iv) fees and expenses in connection with
the loan.

Upgrades in Ocwen's ratings could create upward rating pressure.
In addition, a significant reduction in Altisource's reliance on
Ocwen while maintaining its current level of financial
performance would be viewed positively; operating margins in
excess of 25%, free cashflow to debt in excess of 15% and debt to
EBITDA below 2.5x.

Downgrades in Ocwen's ratings or the loss of Ocwen's contract
could create downward rating pressure. In addition, the ratings
could be downgraded if the company's financial performance
materially deteriorates for an extended period of time; service
revenue below $350 million, operating margins below 15%, free
cashflow to debt below 5%, or debt to EBITDA above 3.5x.

The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.

Altisource is a business services company providing services to
the real estate, mortgage, asset recovery and financial services
market.



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


INVESCO CONISTON: S&P Lowers Rating on Class E Notes to 'CCC+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
the class E notes issued by Invesco Coniston B.V. "At the same
time, we affirmed our ratings on the class A-1, A-2, B, C, D, and
F notes," S&P said.

"The rating actions reflect the credit and cash flow analysis we
have performed to assess the transaction's performance since our
previous review in June 2011," S&P said.

CAPITAL STRUCTURE
                 Notional               OC
       Current      as of              as of
      notional   Jun.2011   Current  Jun.2011  Interest
Deferrable
Class      [1]        [1]   OC  (%)       (%)       (%)
interest
A-1     214.98     214.98    42.80      45.38  3mE+0.23
No
A-2      56.70      56.70    27.71      30.98  3mE+0.35
No
B        24.60      24.60    21.16      24.73  3mE+0.55
Yes
C        24.00      24.00    14.78      18.63  3mE+0.95
Yes
D        17.60      17.60    10.09      14.16  3mE+1.90
Yes
E        19.60      19.60     4.88       9.18  3mE+4.15
Yes
F         5.16       5.16     3.51       7.87  3mE+6.00
Yes
G sub    33.20      33.20     0.00       0.00       N/A
N/A

[1]Mil. EUR.
OC - Overcollateralization = (aggregate performing assets balance
   + recovery on defaulted assets + principal cash balance -
   tranche balance [including tranche balance of all senior
   tranches])/(aggregate performing assets balance +
   principal cash balance).
3mE - Three-month EURIBOR (Euro Interbank Offered Rate).
N/A - Not applicable.

Since S&P's previous review in June 2011, the transaction has
been hit by:

  -- A reduction in the total amount of collateral to EUR386.85
     million from EUR393.63 million;

  -- An increase in the amount of defaulted assets to 3.95% of
     the aggregate amount of collateral, from none; and

  -- Negative rating migration in the performing portfolio of
     assets--'CCC' assets now represent 9.07% of the aggregate
     amount of collateral compared with 5.72% in June 2011.

However, these negative developments were mitigated by an
increase in the portfolio's weighted-average spread (to 3.52%
from 3.14%) and reduced time-to-maturity.

"We subjected the notes to various cash flow scenarios
incorporating different default patterns and interest rate
curves, to determine each tranche's breakeven default rate at
each rating level. In our analysis, we have used a collateral
balance of EUR375.82 million--equal to the aggregate performing
assets balance, plus the principal cash balance, and the amount
we expect to be recovered on currently defaulted assets--the
current weighted-average spread, and the weighted-average
recovery rates that we considered to be appropriate," S&P said.

"Citibank N.A., London branch (A/Negative/A-1) and Morgan Stanley
& Co. International PLC (A/Negative/A-1) currently provide
currency hedging on EUR28.49 million of non-euro-denominated
assets. In our opinion, their downgrade provisions do not fully
comply with our 2012 counterparty criteria. Therefore, in rating
scenarios above 'A+', we assumed that the counterparties would
not perform their roles," S&P said.

"Of the collateral balance, 15.12% is exposed to the Republic of
Italy (unsolicited, BBB+/Negative/A-2), the Republic of Ireland
(BBB+/Negative/A-2), or the Kingdom of Spain (BBB-/Negative/A-3).
We therefore applied our criteria for nonsovereign ratings that
exceed the European Economic and Monetary Union sovereign
ratings. In particular, in our analysis of the class A-1 notes,
we only gave credit to 66% of the collateral located in Italy,
Ireland, or Spain," S&P said.

"Our rating on the class F notes was constrained by the
application of the largest obligor default test. This is one of
the supplemental stress tests we introduced in 2009. None of
the ratings was affected by the largest industry default test,
another of our supplemental stress tests," S&P said.

"As a result of these developments, and following our credit and
cash flow analyses, we affirmed our ratings on class A-1, A-2, B,
C, D, and F notes, and lowered our rating on class E notes by one
notch," S&P said.

Invesco Coniston is a cash flow CDO of predominantly senior-
secured, second-lien, and mezzanine leverage loans that closed in
August 2007. The portfolio is managed by 3i Debt Management
Investments Ltd. The reinvestment period will terminate in July
2013.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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:

             http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

                           Rating
Class             To                           From

Invesco Coniston B.V.
EUR409 Million Floating-Rate Notes

Rating Lowered

E                 CCC+ (sf)                    B- (sf)

Ratings Affirmed

A-1               AAA (sf)
A-2               AA (sf)
B                 A+ (sf)
C                 BBB+ (sf)
D                 BB+ (sf)
F                 CCC- (sf)



===========
N O R W A Y
===========


NORSKE SKOGINDUSTRIER: Moody's Changes PDR to 'Caa1/LD'
-------------------------------------------------------
Moody's Investors Service changed Norske Skogindustrier ASA's
(Norske Skog) Probability of Default Rating (PDR) to Caa1/LD from
Caa1. Concurrently, Moody's affirmed Norske Skog's Caa1 Corporate
Family Rating and downgraded the rating of its senior unsecured
notes to Caa2 from Caa1. The outlook on all ratings has been
changed to stable from negative. After approximately 3 business
days, Moody's will remove the LD designation on the Caa1 PDR.

The rating action is triggered by Norske Skog's publication of
its third quarter 2012 results. In its release, Norske Skog
reported additional bond buybacks, which, together with
transactions conducted earlier this year, amount to approximately
6% of gross financial debt outstanding as of yearend 2011 at an
average discount of approximately 30%.

Ratings Rationale

The change of the Probability of Default Rating to Caa1/LD
reflects Moody's view that recent bond buybacks below par,
together with transactions in prior quarters, constitute a
distressed exchange, which is an event of default under Moody's
definition. Moody's anticipates that Norske Skog will carry out
further debt buybacks at similar discount levels in the future.

While Moody's acknowledges that no payment default has occurred
and there are no material debt maturities until 2014, in Moody's
opinion these debt buybacks have the effect of helping to improve
a capital structure that might otherwise prove to be
unsustainable over time, considering high Moody's adjusted
leverage of above 9 times as of September 2012. Additionally, the
debt buybacks imply losses to creditors relative to original
promises made. The assessment of likely default avoidance is
based on the fact that buybacks below par help to reduce net debt
and also help to manage compliance with financial covenants
included in the RCF. While such buybacks will somewhat reduce
Norske Skog's high leverage, Moody's believes that the company's
debt burden will remain substantial compared to its inability to
generate meaningful profits.

The group's Caa1 corporate family rating reflects Moody's view
that demand for publication paper continues to decline in mature
markets, while at the same time pricing power remains subdued due
to significant overcapacity. In addition, raw material costs
remain elevated and add to pressure on profitability and cash
generation. While operating performance in 2012 until September
is up on last year, largely a reflection of better fixed cost
absorption following capacity closures and one-off factors having
depressed 2011 performance, the company's financial profile
remains highly leveraged with Moody's adjusted Debt/EBITDA of
above 9 times as of September 2012, which is predominantly driven
by a very weak profitability as indicated by an EBITDA margin of
5.1% on adjusted basis per last twelve months end of September
2012.

Still, Norske Skog has achieved at least break even free cash
flow generation over the past years despite market pressures and
significant amounts spent for restructuring measures. This was
achieved by tight working capital management as well as a
significant reduction in capex, with a capex/depreciation ratio
of around 30-50% since 2009, an indication that assets over time
might be underinvested. Management has also reacted effectively
to the adverse market conditions by selling assets, proceeds of
which helped to retain sufficient liquidity and headroom under
the covenants of the company's financing agreements.

While Moody's notes that Norske Skog's liquidity profile remains
sufficient to cover operational needs and limited debt maturities
through to 2013, this assessment hinges on continued access to
the group's RCF, which is restricted by financial covenants that
are tightening significantly over the next quarters. While
headroom is currently ample with over 30%, tightening test levels
nevertheless require Norske Skog to improve its operating
profitability to retain sufficient headroom or further reduce net
debt.

The downgrade of the senior unsecured notes rating to Caa2 from
Caa1 reflects the relatively high portion of contractually
preferred debt relating to the revolving credit facility as well
as structurally preferred financial claims at operating
subsidiaries (trade payables, pension and lease obligations)
versus the unsecured debt of the holding company, in line with
Moody's Loss Given Default methodology. This follows last year's
changes in the corporate structure as well as preferred financial
claims becoming relatively larger as unsecured debt is redeemed.

The rating could be upgraded if there is evidence of a trend of
improving operating profitability and cash generation ability,
allowing Norske Skog to improve its financial profile with
Debt/EBITDA moving sustainably well below 7x, free cash flow
generation as well as evidence of a sustainable liquidity
position.

Negative pressure on the ratings could materialize if (i) the
group's liquidity profile were to deteriorate, especially if
covenant headroom were to decrease significantly as a result of
Norske Skog being unable to improve profit generation or if
material amounts of negative free cash flows were incurred; and
if (ii) Norske Skog were unsuccessful in restructuring its
operations to bring relief to operating profitability and cash
flow generation.

Downgrades:

  Issuer: Norske Skogindustrier ASA

    Senior Unsecured Regular Bond/Debenture, Downgraded to a
    range of Caa1, LGD4, 65 % from a range of Caa1, LGD4, 56 %

Outlook Actions:

  Issuer: Norske Skogindustrier ASA

    Outlook, Changed To Stable From Negative

Adjustment:

  Issuer: Norske Skogindustrier ASA

     Probability of Default Rating, Adjusted to Caa1/LD from Caa1

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

Norske Skogindustrier ASA, with headquarters in Lysaker, Norway,
is among the world's leading newsprint producers with production
in Europe, South-America, Asia and Australasia. The company also
produces magazine paper in Europe. In the last twelve months
ending September 2012, Norske Skog recorded sales of around
NOK19 billion (approximately EUR2.5 billion).



===========
P O L A N D
===========


PBG SA: Avatia Unit Secures Bankruptcy Protection
-------------------------------------------------
Minda Alicja at Polska Agencja Prasowa reports that PBG SA said
in a market filing that its unit PBG Avatia secured bankruptcy
protection for debt restructuring from the district court in
Poznan.

PBG SA is Poland's third largest builder.


* POLAND: Corporate Bankruptcies Up 66% in October
--------------------------------------------------
Poland A.M., citing Euler Hermes, reports that in the first ten
months of 2012, 774 firms went bankrupt in Poland, up from 627 a
year earlier.

According to Poland A.M., a total of 93 firms declared bankruptcy
in October 2012 alone, up from 66% year-on-year.

Euler Hermes said the firms that declared bankruptcy in October
employed around 5,500 people, Poland A.M. relates.

Poland A.M. relates that Euler Hermes wrote "The number of
construction companies seeking bankruptcy in Poland in October
2012 reached 33, the worst result since 2003".



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


SVERDLOVSK OBLAST: S&P Affirms 'BB+' LT Issuer Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
issuer credit rating on the Russian region Sverdlovsk Oblast,
located in the Urals Federal District of the Russian Federation.
The outlook is stable.

The ratings reflect Sverdlovsk Oblast's limited budget
predictability and flexibility, volatile budget revenues, and
material spending pressures. The oblast's creditworthiness
benefits from low debt, strong liquidity, and a moderate
budgetary performance.

"Like that of many other Russian regions, the oblast's financial
policy lacks predictability and stability due to the weak
institutional system. In addition to its low flexibility, the
oblast's budget revenues are volatile due to its dependence on
metallurgy and pipe production, which are driven by global
commodity markets and economic cycles and together contribute
about 25% of the oblast's tax revenues," S&P said.

"In view of slowing economic growth and higher operating spending
related to federally mandated increases in public-sector
salaries, we anticipate Sverdlovsk Oblast's operating budgetary
performance weakening in the medium term. However, the oblast's
cautious approach to spending will likely support still-strong
operating surpluses of about 5% of operating revenues on average
in 2013-2015, in our view, after 9% on average in 2010-2011.
Importantly, continued prudent spending allocation, as shown by
the management's 2013-2015 budget draft in October 2012, is an
important assumption in our base-case scenario," S&P said.

"In September 2012, the oblast's capital city, Yekaterinburg, was
named one of the hosts for the International Federation of
Football Associations (FIFA) World Cup in 2018. This puts
significant pressure on the oblast, owing to the need for
material investments to meet FIFA's requirements. The cost of the
preparations is not yet clear. Considering the regulations of the
federal authorities, we assume that at least half of the required
spending will be cofinanced by the federal budget. Under this
scenario, Sverdlovsk Oblast's deficits after capital accounts are
unlikely to exceed 5%-6% of revenues on average in 2013-2015,"
S&P said.

"We believe the region's strong self-financing capacity will
result in only moderate debt expansion in the medium term. The
currently low tax-supported debt of 17%-18% of consolidated
operating revenues, which also includes guarantees and debt of
non-self-supporting government-related entities, is not likely to
exceed 30% by 2015, according to our base-case scenario," S&P
said.

"The stable outlook reflects our view that the volatility of
Sverdlovsk Oblast's revenues and material operating and capital
spending needs will likely be counterbalanced by the new
management's continuation of cautious spending policies. We
believe this will translate into a strong liquidity position and
only modest debt," S&P said.

"Positive rating actions would hinge on the oblast's ability to
improve its medium-term financial planning and institutionalize
reserve and liquidity policies, which would help offset revenue
volatility and cover future debt service. Sverdlovsk Oblast's
maintenance of a budgetary performance similar to those in 2010
and 2011 could also lead to positive actions," S&P said.

"Negative rating actions would result if difficulties in
addressing existing expenditure pressure, in particular related
to the salary hikes or investments related to the World Cup
preparations, led to a significant increase in operating and
capital spending from 2013. If this were to occur, the oblast's
budgetary performance would structurally deteriorate in line with
our downside scenario, eroding its liquidity position, in
particular through a rapid decline of accumulated cash reserves,"
S&P said.



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


BANKIA SA: S&P Takes Rating Actions on 7 RMBS Transactions
----------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in seven of Bankia S.A.'s Spanish residential mortgage-
backed securities (RMBS) transactions.

Specifically, S&P has:

  -- lowered and placed on CreditWatch negative its ratings on
     five tranches in four transactions; and

  -- placed on CreditWatch negative its ratings on six tranches
     in seven transactions.

For the full list of the rating actions, see "List Of
Counterparty-Related Rating Actions In Bankia's Spanish RMBS
Transactions--Nov. 5, 2012."

"On Oct. 15, 2012, we took rating actions on several Spanish
banks following our downgrade of the Kingdom of Spain. In
assessing the effect of any bank downgrades on our structured
finance ratings, we apply our 2012 counterparty criteria," S&P
said.

"We have lowered our ratings on five tranches in four Bankia RMBS
transactions, where the documents have been amended in order to
incorporate our 2012 counterparty criteria and maintain Banco
Santander S.A. (BBB/Negative/A-2) as bank account provider. The
new downgrade language sets the trigger to take remedy actions at
a long-term rating below 'BBB'. The maximum rating achievable for
these four transactions is now 'A'. The four transactions are
MADRID ICO-FTVPO I, Fondo de Titulización de Activos, MADRID
RESIDENCIAL I, Fondo de Titulizacion de Activos, MADRID
RESIDENCIAL II, Fondo de Titulización de Activos, and Madrid RMBS
IV, Fondo de Titulización de Activos," S&P said.

"In the remaining three transactions (Madrid RMBS I, Fondo de
Titulización de Activos, Madrid RMBS II, Fondo de Titulización de
Activos, and Madrid RMBS III, Fondo de Titulización de Activos
the bank account provider, Banco Santander, has been substituted
by Barclays Bank PLC (A+/Negative/A-1). This change has not
affected our ratings on the notes in these three transactions,"
S&P said.

"We have placed on CreditWatch negative our ratings on 11
tranches of notes (in seven transactions) due to the remedy
actions to be taken in relation to the swap providers. The swap
documents are being modified in order to comply with our 2012
counterparty criteria. For the transactions Bankia retains (ICO-
FTVPO I, MADRID RESIDENCIAL I, MADRID RESIDENCIAL II, and Madrid
RMBS IV), Banco Bilbao Vizcaya Argentaria S.A. (BBVA; BBB-
/Negative/A-3) will remain as the swap provider. The trustee is
looking for a replacement swap counterparty for those
transactions that were placed in the market (Madrid RMBS I,
Madrid RMBS II, and Madrid RMBS III). We will conduct further
analysis to determine how much support these transactions gain
from the swap. This analysis could have a negative effect on our
ratings on some of the affected tranches. We will also consider
any substitutions and amendments to the documentation in our
analysis," S&P said.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an residential mortgage 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 Reports
included in this credit rating report are available at:

            http://standardandpoorsdisclosure-17g7.com


IM SABADELL: S&P Downgrades Rating on Class A2 Notes to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'BB (sf)' from
'BBB- (sf)' and placed on CreditWatch negative its credit rating
on IM SABADELL EMPRESAS 5 , Fondo de Titulizacion de Activos'
class A2 notes.

"The rating action follows our rating action on Banco de Sabadell
S.A. (BB/Watch Neg/B), the guaranteed investment contract (GIC)
and swap provider in the transaction, and the application of our
2012 counterparty criteria," S&P said.

"Prior to 's rating action, we lowered our long-term issuer
credit rating (ICR) on Banco de Sabadell twice: We previously
lowered it to 'BB+' from 'BBB-' on April 30, 2012, and more
recently to 'BB' from 'BB+' on Oct. 15, 2012, following our
downgrade of the Kingdom of Spain on Oct. 10, 2012," S&P said.

"The transaction documents, which reflect our (superseded) 2010
counterparty criteria, stipulate that remedy actions need to be
taken if the long-term ICR on the GIC provider and the swap
counterparty are lowered below 'BB+'. Since we previously lowered
our long-term ICR on Banco de Sabadell on April 30, 2012, under
the transaction documents, the counterparty is no longer eligible
and the 60-day remedy period has now expired," S&P said.

"The trustee and the originator (Intermoney de Titulización
S.G.F.T. S.A. and Banco de Sabadell, respectively) have confirmed
that the transaction will fully amortize on the next interest
payment date, and that the issuer will therefore not take any
remedy actions regarding the GIC or the swap counterparty. Our
2012 counterparty criteria therefore link our ratings on the
notes in this transaction to the long-term ICR on the GIC and the
swap provider, Banco de Sabadell," S&P said.

"Consequently, we have  lowered to 'BB (sf)' from 'BBB- (sf)' and
placed on CreditWatch negative our rating on the class A2 notes
following the application of our 2012 counterparty criteria," S&P
said.

IM SABADELL EMPRESAS 5 is a Spanish small and midsize enterprise
(SME) transaction that securitizes a static portfolio of loans
granted to SMEs in their normal course of business. Banco de
Sabadell is the originator in this transaction.

              STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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:

          http://standardandpoorsdisclosure-17g7.com



===========
S W E D E N
===========


PANAXIA: Subsidiary's Top Executives Probed Over Alleged Fraud
--------------------------------------------------------------
Radio Sweden, citing Swedish Radio, reports that a subsidiary of
the now bankrupt Panaxia exaggerated its inventory to loan up to
SEK60 million.

According to Radio Sweden, top management claimed ownership of
1400 collection bags for transporting cash, seven times the
number it actually owned, in order to inflate the value of the
company.

Radio Sweden relates that Swedish Radio published on Tuesday a
recorded phone conversation between two top executives at the
subsidiary company discussing the fraud.

The subsidiary reportedly took out multiple loans on each bag
from different companies in order to raise extra cash and inflate
the value of the company, Radio Sweden discloses.  The parent
company Panaxia went bankrupt in September, Radio Sweden
recounts.  Two of its executives, among them the company's
founder, are now being investigated for economic crimes, Radio
Sweden says.

Panaxia is a Swedish security company.



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


GLASTONBURY FINANCE: Fitch Affirms 'C' Ratings on 3 Note Classes
----------------------------------------------------------------
Fitch Ratings has affirmed Glastonbury Finance 2007-1 P.L.C.'s
notes, as follows:

  -- GBP1.5m class X (XS0292542734): affirmed at 'AAAsf', Outlook
     Stable

  -- EUR127.9m class A1 EUR (no ISIN): affirmed at 'BBBsf',
     Outlook Negative

  -- GBP40.1m class A1 GBP (no ISIN): affirmed at 'BBBsf',
     Outlook Negative

  -- GBP33.0m class A2 (XS0292543039): affirmed at 'Bsf', Outlook
     Negative

  -- GBP32.8m class B (XS0292543112): affirmed at 'CCCsf'

  -- GBP32.4m class C (XS0292543468): affirmed at 'CCsf'

  -- GBP17.0m class D (XS0292543542): affirmed at 'Csf'

  -- GBP11.2m class E (XS0292543898): affirmed at 'Csf'

  -- GBP4.6m class F (XS0292543971): affirmed at 'Csf'

The affirmations reflect the notes' level of credit enhancement
relative to the portfolio's credit quality.  Assets rated 'CCC'
or below have remained stable since the last surveillance review
and account for 11.9% of the portfolio, while current defaulted
assets in the pool account for GBP31.0 million.  CMBS assets
represent 80% of the portfolio with whole business
securitizations (WBS) making up the remainder.  62% of the
portfolio is exposed to the UK, followed by 28% in Germany, 6% in
Italy and 4% in the Netherlands.

The Negative Outlook on the class A1 and A2 notes reflects the
portfolio's increased obligor concentration, which may expose the
transaction to the idiosyncratic risk of default of the largest
obligors.  The largest obligor in the portfolio represents 12.9%
of the notional and the top five assets account for 51.3%,
increased from 11.8% and 48.3% as of the last review,
respectively.  Fitch expects the obligor concentration in the
portfolio to increase as new assets are no longer introduced into
the portfolio due to the end of the reinvestment period.

Fitch believes a material risk for the transaction is that the
underlying structured finance assets' maturity may extend beyond
their reported weighted average life.  The agency incorporated
this extension risk into its analysis of the portfolio.

Class A1 over-collateralization (OC) test is passing, whereas OC
tests for the rest of the notes are failing, despite them
improving since the end of the reinvestment period in May 2010.
According to the transaction documents, the collateral manager
may continue to sell defaulted or credit-risk assets after the
reinvestment period, but may no longer reinvest any principal
proceeds.

The class X notes rank senior to the class A1 notes, including
also a post-enforcement waterfall and pay a fixed scheduled
installment of GBP125,000 every quarter.  As their balance as of
the August 2012 note payment was GBP1.5 million, the notes are
expected to be fully redeemed on the August 2015 note payment.

Glastonbury Finance 2007-1 P.L.C. is a managed cash arbitrage
securitization of CMBS and WBS assets.  The issuer has been
incorporated as a special-purpose vehicle to issue approximately
GBP354 million of floating-rate and subordinated notes.  The
collateral is actively managed by Palatium Investment Management.
Since the end of the reinvestment period, any amortization and
sales proceeds are used to sequentially repay the outstanding
notes.


GREY STREET HOTEL: In Administration, Seeks Buyer
-------------------------------------------------
Evening Chronicle reports that Graham Newton and Paul James Bates
from BDO have been appointed as joint administrators of the city
centre's four-star Grey Street Hotel after it struggled to fill
rooms in the past year.

While the administrators look to sell the business, all current
bookings are being kept and no redundancies are currently
planned, according to Evening Chronicle.

"Unfortunately the economic climate and difficult trading
conditions have adversely affected the hotel.  The hotel will
continue to trade whilst all opportunities are explored . . . .
It is business as usual for the Grey Street Hotel - all room and
venue bookings will carry on as planned. Customers seeking
further information should contact the hotel manager with any
queries," the report quoted Graham Newton, BDO business
restructuring partner, as saying.


HIBU PLC: Moody's Downgrades CFR to 'Ca'; Outlook Negative
----------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
('CFR') of hibu plc to Ca (from Caa3), and its Probability-of-
Default Rating ('PDR') to Ca/LD. The ratings outlook remains
negative.

Ratings Rationale

The rating action and the assignment of the /LD to the PDR
follows the payment default on the un-extended portion of the
term loan B tranche that was due on October 29, 2012, and the end
of the 3 days grace period. Moody's expects to remove the "/LD"
suffix after approximately three business days.

On October 25, 2012, hibu announced its decision to suspend all
further payments of principal and interest to the company's
lenders until the restructuring of its balance sheet is complete.
The GBP65 million due on 29 October 2012 to repay the non-
extended portion of the Term Loan B (under the 2006 credit
agreement) has therefore not been made, and is now suspended.

Hibu is currently seeking certain waivers, consents, and
amendments from the wider lending group with a view to
restructure its capital structure in a consensual way. The
company expects to present a restructuring proposal to its
lenders by the end of January 2013 and to complete the debt
restructuring before the end of June 2013. The downgrade of the
CFR to Ca reflects the agency's expectation that a significant
debt writedown is highly likely as part of the potential debt
restructuring process.

The waivers, consents, and amendments that hibu is seeking from
its lenders, will require the approval of the 2009 facility
agreement lenders that hold two-thirds of the debt by value under
that agreement, and the approval of lenders under the 2006
facility agreement.

The Senior Co-ordinating Committee -- which owns approximately
24% of the debt under the 2009 senior facility -- has already
agreed in support of the waivers, subject to credit committee
approval. However, some lenders of the 2006 facilities have said
that they may seek to launch litigious action to recover the
amounts due to them that stand suspended (GBP65 million) under
their facility agreement. Should hibu fail to gather sufficient
approval for the waivers, it intends to file a scheme of
arrangement in the UK to give effect to necessary arrangements.

The decision of the group to suspend future interest/ principal
payments is not driven by liquidity considerations. The company
had GBP135 million of available cash as of March 31, 2012 and
continues to generate positive yet declining free cash flows. It
has now lost the support from the GBP75 million fully undrawn
revolving credit facilities which have been cancelled. The
company had also obtained a waiver on its covenant test in
September 2012 to avoid a breach.

The negative outlook on hibu's ratings reflects the uncertainty
regarding the possibility that a consensual agreement may not be
achieved, potentially leading to lower than currently anticipated
group recoveries.

What Could Change The Rating Up/Down

No upward rating pressure is expected until any restructuring is
completed, and would require significant debt reduction. On the
other hand, downward rating pressure could be exerted on the
ratings, in the instance consensual agreement for debt
restructuring is not achieved signalling lower group recoveries.

Rating Methodologies

The principal methodology used in rating hibu plc was the Global
Publishing Industry Methodology published in December 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.

Hibu operates in the UK, US, Spain, Argentina, Chile, Peru and US
Hispanic markets. In the fiscal year ended March 31, 2012, hibu
had 1.2 million SME customers and total revenues of GBP1.6
billion.


MF GLOBAL: UK Unit is Non-defaulting Party, Judge Rules
-------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that U.K. High Court
Judge Richard Williams on Thursday ruled MF Global Inc.'s U.K.
subsidiary is entitled to calculate what it owes its parent to
settle internal repurchase agreements on the broker-dealer's
disastrous European sovereign debt purchases, in a setback for
the American company's bid to recoup about GBP286 million
(US$461 million).

Bankruptcy Law360 relates that Judge Williams ruled MF Global
U.K. is the non-defaulting party under the global master
repurchase agreement governing the contracts.

                          About MF Global

New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- was one of the world's leading brokers of commodities and
listed derivatives.  MF Global provided access to more than
70 exchanges around the world.  The firm was also one of 22
primary dealers authorized to trade U.S. government securities
with the Federal Reserve Bank of New York.  MF Global's roots go
back nearly 230 years to a sugar brokerage on the banks of the
Thames River in London.

MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos.
11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed.

As of Sept. 30, 2011, MF Global had US$41,046,594,000 in total
assets and US$39,683,915,000 in total liabilities.

Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel.  The Garden City Group, Inc., serves as
claims and noticing agent.  The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.

Louis J. Freeh was named the Chapter 11 Trustee for the
bankruptcy cases of MF Global Holdings Ltd. and its affiliates.
The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP,
as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.

An Official Committee of Unsecured Creditors has been appointed
in the case.  The Committee has retained Capstone Advisory Group
LLC as financial advisor.

The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers.  James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act.  He is a partner at
Hughes Hubbard & Reed LLP in New York.

Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.


PATTON GROUP: Expects to Enter Into Administration
--------------------------------------------------
Margaret Canning at Belfast Telegraph reports that administrators
are expected to be appointed to Patton Group.

According to Belfast Telegraph, the company said it had been
facing "cash pressures" as a result of the downturn in
construction.

It is thought that around 50 people were made redundant from the
company earlier this year, Belfast Telegraph discloses.

Belfast Telegraph relates that in a statement on Monday, a
spokesman for the group said it had been in talks with its lender
-- which its latest accounts reveal to be Northern Bank.

The Belfast Telegraph understands the appointment of Keenan
Finance as administrators is expected to be led by the directors
of the company rather than Northern Bank.

Patton Group made a loss of GBP7 million on a turnover of
GBP176.5 million in the year ending November 30, 2011, Belfast
Telegraph, citing a directors' report.

The directors' report said the group had faced restructuring
costs of GBP1 million as a result of letting some staff go, and
had made a writedown of nearly GBP5 million on the value of its
landbank, Belfast Telegraph notes.

Patton Group is a Northern Ireland building contractor.  The
company is based in Ballymena and employs around 350 people.  The
company has been in business for 100 years and specializes in
building, shop fit-outs and museum construction.


PUNCH TAVERNS: Fitch Cuts Ratings on Three Note Classes to 'CCC'
----------------------------------------------------------------
Fitch Ratings has downgraded Punch Taverns Finance B ltd's (Punch
B) notes.  The Outlook on the class A notes is Negative.

The downgrades are driven by Punch B's ongoing poor performance
and weak outlook (hampered by the limited scope for operational
change).  FY12 (ending August 18, 2012) sales and EBITDA
(excluding Punch Taverns Plc's (Plc) financial support) have
continued to fall at a steep rate of, 7.5% and 8.6%,
respectively, to GBP191.4 million and GBP90.7 million, while
EBITDA margin has also been further eroded to a historical low of
47.4% (from 54.6% three years ago).  As anticipated, this fall in
EBITDA is largely due to the disposal of tail pubs (with the
total average annual number of pubs being down by 7.3%), but also
due to compressing gross margins and relatively high operating
costs (notably due to the maintenance of distressed pubs).

Fitch's base case assumes that, on a run-rate basis, EBITDA
(without Plc financial support) will continue to decline in FY13
by 7% to GBP84.6m and by a further 1% in FY14.  This decline will
be mainly driven by the annualized effect of the pubs' disposal,
further downward rent readjustments and increased operating
costs.  The agency does not view Plc's growing financial support
as sustainable (up by 12%).  The transaction has benefited from
GBP40.9 million in FY12, which represents 31% of the reported
GBP131.6 million EBITDA.  Without this support, both the
restricted payment conditions (RPC) and the financial covenants
would have been breached at the beginning of FY11, and without
further support Punch B could breach its financial covenant as
soon as the quarter ending in March 2013.

Fitch's updated base case FCF DSCRs (minimum of both the average
and median DSCR to legal final maturity of the notes) have
reduced to critically low levels notably for the class B and C
notes, both to 0.8x (from 1.0x and 0.95x, respectively).
Performance would have to improve for the notes not to default.
Considering the state of Punch B's wet-led pubs (requiring
significant investments), their location (with 40% based in the
economically weaker north region), and general unfavorable macro
factors (weak economy, competition of the off-trade, duty
increases), Fitch views the risk of default for both class B and
C notes as a real possibility, which is reflected in the notes'
downgrade to 'CCC'.  In addition, in light of the potential
restructuring of the debt, net leverage is also viewed as too
high despite the current debt amortization.  The projected FY13
EBITDA leverages (taking into account today's cash on the balance
sheet after upstream of dividends) for the class B and C notes
are at 7.3x and 8.5x, respectively.

The class A notes still have a limited margin of safety as
suggested by their base case FCF DSCR of 1.2x (down from 1.25x).
However, the notes are expected to fluctuate closely to 0.9x for
a prolonged period (five-year duration), which combined with
their base case DSCR being below the typical 'BB' rating category
range of (1.3x-1.5x), no longer warrants a 'BB' rating for the
class A notes.  The class A notes net leverage at 6.5x is also
relatively high.

Plc has completed a review of its capital structure. It commented
that both securitizations (Punch B and Punch Taverns Finance A
Ltd (Punch A)) are viewed as "over levered" and "unsustainable".
Plc intends to discuss this situation with the bondholders and
other stakeholders of Punch A and B.  Given the limited cash
resources available at Plc level combined with the increasing
cash need of both Punch A (with net cash support of GBP5m in FY12
to avoid breach of its financial advisor covenant) and Punch B
(GBP16m to avoid breach of RPC), the agency does not expect Plc's
support to be maintained if no agreement with bondholders about
restructuring of the debt can be reached.  The timing of the
process (and its outcome) remains unclear thus far. This adds
further uncertainty contributing to the Negative Outlook.

Fitch used its UK whole business securitization criteria to
review the transaction's structure, financial data and cash flow
projections and to stress-test each of the rated instruments.

Punch B is a whole business securitization of 1,879 leased and
tenanted pubs across the UK owned by Punch Taverns Group.

The ratings actions are as follows:

  -- GBP182.1m class A3 due 2022: downgraded to 'B+' from 'BB',
     Outlook Negative
  -- GBP220.0m class A6 due 2024: downgraded to 'B+' from 'BB',
     Outlook Negative
  -- GBP176.6m class A7 due 2033: downgraded to 'B+' from 'BB',
     Outlook Negative
  -- GBP49.0m class A8 due 2033: downgraded to 'B+' from 'BB',
     Outlook Negative
  -- GBP77.5m class B1 due 2025: downgraded to 'CCC' from 'B'
  -- GBP125m class B2 due 2028: downgraded to 'CCC' from 'B'
  -- GBP125m class C1 notes due 2035: downgraded to 'CCC' from
     'B-'


PUNCH TAVERN: Fitch Lowers Rating on Class C(R) Notes to 'CCC'
--------------------------------------------------------------
Fitch Ratings has downgraded Punch Taverns Finance Plc's (Punch
A) notes.  The Outlooks on the class A and M notes are Negative.

The downgrades are driven by a combination of further declines in
business performance, limited scope for operational change and
Fitch's expectation that without a material improvement in
business prospects, the B, C and D notes are in danger of
ultimately defaulting.  These issues are compounded by
ineffective financial covenants.

The Negative Outlook reflects the agency's view that Punch A's
performance remains challenged by macro-economic factors such as
the uncertainty about the jobs' market, rising commodity prices,
the ongoing change in consumer behavior especially affecting wet-
led pubs, further exposure to alcohol taxation and the continued
strength of the off-trade.

The transaction's performance has continued to deteriorate, as
evidenced by the decline in operating profit and resulting
coverage (rolling two quarter EBITDA DSCR down to 1.36x
(unsupported 1.07x vs. 1.17x a year ago, compared with a
financial covenant of 1.25x)).  Performance has not yet levelled
out, as indicated by like-for-like net income from Punch Taverns
Plc's (Plc) core estate, which is a good proxy for Punch A's core
estate, dropping by 3.7% (vs. 2.1% in FY11).  However, this is
mainly driven by pubs not held on substantive agreements (6% of
Plc's core and 45% of Plc's turnaround estate).

EBITDA per pub has remained largely flat over the past four
quarters.  This was heavily influenced by the borrower's disposal
program, which focuses on selling poorly performing pubs from
Punch's turnaround estate.  The agency expects that continued
pressure, on both revenues with notably the ongoing rebasing of
the rent charged to the tenants and costs with rising food,
utilities, and maintenance costs, should continue to curtail
EBITDA.

Fitch's FCF forecasts only give credit to unsupported operating
cash flows. The agency forecasts DSCRs will be strained by
further declining EBITDA/FCF as well as increasing debt service
after 2015.  The agency's base case FCF DSCR (minimum of both the
average and median DSCRs to the notes' legal final maturity) for
the class A, M, B, C and D notes is c. 1.5x, 1.1x, 0.9x, 0.85x
and 0.8x, respectively.  The agency forecasts that FY13 EBITDA
could drop by another c.  7% with EBITDA margin falling close to
49% (from 56.7% three years ago).  The EBITDA decline is mainly
driven by the annualized effect of the pub disposals, lower
rental income (as their readjustments continue) and increased
operating costs.  FCF is forecast to decline slightly more than
EBITDA as more cash-strapped tenants are expected to struggle to
fully contribute to capex and potentially more tenants moving to
shorter tenancy agreements which involve Punch carrying out the
majority of repairs to the pubs.

Further asset disposals and potential debt prepayments could have
a material impact on the assumptions and DSCRs.  Additionally,
with regards to the forecast of FCF (after-tax), Fitch
understands that the interest expense incurred due to the
subordinated loan funding (GBP1,023 million) is fully tax
deductible and is therefore functioning as an efficient tax-
shield.

Following the sale of 272 pubs, mainly from the borrower's
turnaround estate, the net debt-to-EBITDA multiples
(3x/6.5x/8.5x/9.1x/9.7x for classes A/M/B/C/D, respectively)
after tax upstreams deteriorated despite further cash
accumulation within Punch A.  Unlike FY11 no debt was prepaid
this year.  Apart from accumulating cash within the
securitization, disposal proceeds were invested in capex,
predominantly in the core estate.

Plc has completed a review of its capital structure. It commented
that both securitizations (Punch A and Punch Taverns Finance B
Ltd) are viewed as "over levered" and "unsustainable".  Plc
intends to discuss this situation with the bondholders and other
stakeholders of Punch A and Punch Taverns Finance B Ltd.  While
the cash support for Punch A could be more than recouped in FY11,
the net support (after tax upstreams) amounts to GBP5 million in
FY12.  Fitch expects the net support necessary to maintain the
transaction above its financial advisor covenant of 1.35x to
increase further next year due to continued declines in EBITDA
combined with lower tax rates.  Given the limited cash resources
and the increasing amortization profile from 2015 onwards, the
agency does not expect Plc's support to be maintained if no
agreement with bondholders and other stakeholders about a
restructuring of the debt can be reached.  The timing of the
further process remains unclear thus far.  This adds further
uncertainty contributing to the Negative Outlook.

Fitch used its UK whole business securitization criteria to
review the transaction's structure, financial data and cash flow
projections and to stress-test each of the rated instruments.

Punch A is a whole business securitization of 2,604 leased and
tenanted pubs across the UK owned by Punch Taverns Group.

The rating actions are as follows:

  -- GBP270.0m class A1(R) fixed-rate notes due 2022: downgraded
     to 'BBB-' from 'BBB'; Outlook Negative
  -- GBP233.1m class A2(R) fixed-rate notes due 2020: downgraded
     to 'BBB-' from 'BBB'; Outlook Negative
  -- GBP108.9m class M1 fixed-rate notes due 2026: downgraded to
     'B' from 'BB-'; Outlook Negative
  -- GBP398.7m class M2(N) floating-rate notes due 2029:
     downgraded to 'B' from 'BB-'; Outlook Negative
  -- GBP79.5m class B1 fixed-rate notes due 2026: downgraded to
     'CCC' from 'B';
  -- GBP83.7m class B2 fixed-rate notes due 2029: downgraded to
     'CCC' from 'B';
  -- GBP134m class B3 floating-rate notes due 2031: downgraded to
     'CCC' from 'B';
  -- GBP85.1m class C(R) fixed-rate notes due 2033: downgraded to
     'CCC' from 'B-';
  -- GBP83.8m class D1 floating-rate notes 2032: affirmed at
     'CCC'


YOUNG EUROPEAN: In Administration After Falling Into Arrears
------------------------------------------------------------
Kaleigh Watterson at Insider Media News reports that Young
European Ltd entered administration after falling into arrears
with Her Majesty's Revenue & Customs (HMRC), a new report has
revealed.

Young European Ltd was sold to a connected business after being
impacted by bad debts and difficult economic conditions, the
company's administrator said, according to Insider Media News.

Costas Morfakis of Axiom Recovery was appointed administrator of
Young European Ltd on August 14, 2012.  The appointment was made
by Bibby Factors Manchester Ltd, the company's secured creditor.

The report notes the business was sold to Dennis's Removals Ltd
for GBP55,000.

The report says that the administrator said the purchaser is a
connected company which had operated alongside Young European for
a number of years under the control of common directors Lesley
Hutchings and Kevin Hutchings.

Insider Media News discloses that a small number of the customers
were invoiced, the administrator said, but the majority was
factored through Bibby which provided the funding for the
company.

A report from the administrator said the company traded
profitability until cash flow was hit by a combination of bad
debts and difficult economic conditions in late 2011 and early
2012, Insider Media News says.

Insider Media News notes that the business fell into arrears with
HMRC because of trading conditions, which then added penalties
and interest of about GBP40,000 to the debt.  The company was
unable to manage this debt on a timetable which could be agreed
between HMRC and Young European, the report said, Insider Media
News relays.

Insider Media News relates that as a result of this, HMRC
petitioned to wind the company up and Bibby, as secured creditor,
opted to enforce its security and appointed the administrator.

The report revealed secured creditor Bibby was owed GBP170,608 at
the time of the administrator's appointment against an
outstanding book debt ledge of GBP278,938, Insider Media News
discloses.

Unsecured creditors are owed GBP587,082.  This includes a
shortfall to Close Asset Finance Ltd and Mercedes Benz Finance
brought down as Young European had hire purchased agreements with
these lenders, Insider Media News notes.

HMRC is understood to be owed a total of GBP290,319 and
GBP188,737 is expected to be owed to trade and expense creditors,
Insider Media News adds.

Young European Ltd is a Wiltshire haulage company.


                            *********

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

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

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

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


                            *********


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

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

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

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

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

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


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